Conway Street Redevelopment Comment

We have been endeavouring to bring forward a redevelopment of the area around Hove Station for some 8 years now. We have spent in excess of £1.3m on professional and local authority fees and last week the Planning was refused on the main ground that there was an inadequate level of affordable housing.

The Development Appraisal negotiations with the District Valuer from Gloucester were flawed and it is very clear to us that the scheme was unviable at 25% affordable housing. If the scheme is unviable it is pointless obtaining a Planning Consent as the project will not proceed. Progress on this report was delayed by the District Valuer for some 9 months and his final report was only produced on the day before the Committee meeting. In this report several of the points we had been arguing for 9 months prior were changed to meet our original submission.

There appears to be some misunderstandings in respect of interpretation of the Development Appraisal. The Argus stated that Matsim would make between £11m and 12.7m profit depending on the level of affordable housing. We presume this has led Valerie Paynter, the main objector to the scheme, to suggest that Matsim were ‘greedy developers’. It is a great pity that the journalist and Ms Paynter did not acquaint themselves with an understanding of these appraisals.

Matsim would never have been the Developer of this site with a scheme of such scale and complexity – there are a limited number of National Developers that could do so. The developers profit referred to in this Appraisal is the profit that a major developer would require in order to consider taking on the financing, construction costs and significant risk attached to a mixed use scheme of this nature. It is a generally accepted level of profit. The District Valuer disputed this profit level for 9 months, despite making a speech at an open lecture confirming his acceptance of this profit level, before amending his decision in the final report.

Matsim purchased the properties as investments, i.e. the purchase price was paid for the anticipated rental income of the buildings. The Development Appraisal calculates a land value if Planning Permission is granted and if that is above the investment value then a decision is made whether to bring forward the Development. If that figure is below the investment value then why would any developer consider developing or selling his land?

Whilst we have owned the buildings for many years we have been receiving a reduced market rent on the units for 4 years because of the impending possible redevelopment. Matsim has also had to pay compensation (over £50k) to one of the occupiers because of the delays in the Planning Application and the lack of certainty for the established business occupier in the industrial unit.

Matsim made very clear their concerns on the District Valuer report and is disappointed that the Planning Officer did not seek a second opinion at any stage in the 11 months, or a change of Valuer to, perhaps, one more local and familiar with property in Sussex. We agreed to an open book to publicise our figures back in December, the first applicant to do so. We also agreed to a review mechanism where our build costs and achieved values would be reviewed upon completion and an uplift in affordable housing numbers or a financial contribution would be made should the scheme prove to be more profitable. We tried to be as transparent and honest throughout this process whilst offering a position that protected the affordable housing provision through the review mechanism. We were only interested in getting a planning consent for something we knew could be built viably and soon. As a local company we are all too well aware that this City has schemes that are talked about and not built. We didn’t want this to be another one.

We must now consider whether it is worth appealing against this decision. We must consider the residential market conditions both now and in the future and these would suggest that this is unlikely.

We are genuinely disappointed for Hove that this application did not achieve consent particularly bearing in mind the level of public support, the MP and councillor support and the valuable free hard work of the local Neighbourhood Forum.

One response to “Conway Street Redevelopment Comment

  1. Why does the council use the district values to assess viability appraisals when there are countless more efficient and accountable options. The offer of a review of the viability on completion of the project was a rational and reasonable way forward. Yet again, regeneration in Brighton and Hove is being delayed, if not prevented, by the inability to make pragmatic decisions. This is a site identified in the City’s Local Plan and non delivery of this will result in the need for other, less suitable sites to be brought into the plan. I urge Matsim to appeal.

Leave a Reply

Your email address will not be published. Required fields are marked *

Stay in the loop. Follow us on Twitter. @MatsimProps