A developer has been told it doesn’t have to pay £685,000 towards improvements to local health and education facilities – but a council has been told it could still get the money back if it puts in a ‘clawback’ clause.
Emerald Homes has successfully applied to South Holland District Council to not provide financial Section 106 contributions which it had been told to do when given outline planning permission for 119 homes at home Farm in Deeping St Nicholas.
It also won’t have to provide any affordable housing element but has pledged to still build a village hall which it claims will cost it £1.2m.
The previous Section 106 agreement signed in 2021 had said the hall should be built upon 50 per cent of the site being completed, but the new one says it should be after 25 per cent.
A viability study by the developer claimed the original Section 106 would have provided a ‘negative viability of £5.28m’. It claims even the newly agreed proposal would leave it £2.28m ‘negative viability’ based on the developer having a 17.5 per cent profit.
An independent viability assessor CPV brought in agreed that the project would not be viable without a Section 106 amendment “With nil affordable housing and nil S106 contributions (but the community centre still factored into the model) the scheme generates a residual land value of £933,744.
“This is below our benchmark land value of £1,560,600 and therefore this fails to meet the viability threshold.
“This is a reflection of the current poor market conditions and is a national issue at the present time”
In response to the application Lincolnshire Integrated Care Board said it was ‘disappointed’ at losing the £609,390 it was due to get, but says the request was ‘proportionate’.
“The ICB considers that the absence of funding for this scheme will fail to support the additional capacity required at Munro Medical Centre and/or Beechfield Medical Centre,” a submission objecting to the application states. “The requested contribution is directly related to the anticipated increase in population arising from the development.
But CPV’s independent advisor advises the council to put a ‘clawback’ clause in.
“We would strongly recommend that this is retained to allow viability considered at a later date, during the delivery of the project,” its report states.
But South Holland District Council has not responded to requests from The Voice as to whether it would include the ‘clawback’ clause or indeed how it would work.
