Nottingham City Council is poised to buy the government’s regeneration agency out of a loss-making public-private partnership that is spearheading a string of major developments across the city.
The authority will purchase the Homes and Communities Agency’s 50 per cent stake in Blueprint, a joint venture between English Partnerships (which the HCA has since replaced), the now-defunct East Midlands Development Agency, and Igloo Regeneration Property Trust.
The partnership is developing five major sites across Nottingham, including Trent Basin, a complex waterside development which received planning permission last February.
Plans for the council to buy out the HCA stake were revealed in confidential papers prepared for a December meeting of its executive committee.
According to HCA papers, seen by Construction News, its board sanctioned an “accelerated exit” from its shareholding in Blueprint last October, as it “represented the most commercial option”.
The partnership posted a £2.4m loss in 2013/14, according to financial statements for Blueprint.
It recorded a loss of £2.1m the previous year after almost a decade of operation.
The agency’s papers reveal that the proposed buy-out would require the council to purchase seven plots of land from the HCA, including some in and around Trent Basin.
The HCA was championing the £25m development as late as March last year, describing it as a “great opportunity for people to live beside and enjoy the fantastic riverside location”.
The council’s own development agency, Nottingham Regeneration, has described Trent Basin as a “difficult” project with “abnormal costs associated with the sites former industrial use”.
Its submission to the council’s planning committee last year pointed out that the development would create a “new market for housing” in the former industrial zone.
“The challenges to developing sites of this nature and size have increased significantly,” it added.
The city authority agreed last year to a series of concessions to help the development get off the ground, according to a report to its planning committee.
It agreed to waive certain requirements for affordable housing and public space improvements for the first of five phases of the residential element of the mixed-use scheme.
“The latter phases can make appropriate contributions once the viability has been proven and market established,” the papers state.
Development of the first 41 of 160 homes planned for the site is due to be completed next year.
A spokeswoman for Nottingham City Council said it “believes this is a viable development scheme, which forms part of the council’s vision for the wider waterfront area”.
An HCA spokesman said the terms of its partnership agreement permitted the transfer of its equity share in Blueprint to another public sector partner.
“The HCA is in active dialogue with Nottingham City Council about how we can best deliver its regeneration priorities,” he added.
“The Blueprint joint venture company has a very strong focus on some of the council’s key regeneration projects, so enabling the council to take on our stake in the company would give them direct input into the delivery of those priorities into the future.”
Trent Basin: the basics
- Number of homes: 160
- Value of properties: £200,000 to £300,000
- Total site value: £25m
February 2014: Full planning permission received for Trent Basin, the fifth project in Blueprint’s development portfolio.
June 2014: Blueprint records £2.4m loss.
October 2014: Homes and Communities Agency agrees “accelerated” exit from Blueprint.
December 2014: Nottingham City Council considers buying out HCA’s equity share.
Summer 2015: Planned start for first phase.