A major development in Deeping St Nicholas may not be viable if a new village hall and other section 106 agreements are not changed, says a construction company.
Emerald Homes has permission to build 119 homes on land at Home Farm, but a report submitted to South Holland District Council says financial contributions of £725,231 to health and education, along with a £1.2m new hall could make the project unviable.
“It is clear that the £2.7m of abnormal costs associated with the development of this site have had a very significant impact on the viability of the development and rendered a policy-compliant scheme unviable to deliver,” says the report.
The application states the proposed affordable housing and infrastructure contributions make the development economically unviable.
The company wants the ten per cent of affordable housing and the £725,000 contribution removed from the planning conditions.
It says that if ten per cent of homes were affordable, the community centre was built and the £725,000 of infrastructure costs covered, there would be ‘negative equity’ of £5.28m.
With no affordable housing or contributions, viability still comes in at £2.44m in the red.
Reducing developer profit to 14 per cent (from an ‘appropriate 15-20 per cent)’ and removing all contributions would see figures back in the black by £37,000.
Among the £3.94m ‘abnormal’ costs, the company lists a £150k pumping station, demolition at £167k, electricity substation £125k and £119k for gas membranes across the site. Included in those costs is the £1.2m for the new community centre.
The application to modify the conditions initially attached to planning permission will be decided by South Holland District Council.
