Reference: AA/SPHR/01

Transcription

1 CANTERBURY CITY COUNCIL SUMMARY OF EVIDENCE OF STEPHEN RICHARDSON ON BEHALF OF CANTERBURY CITY COUNCIL

2 1. INTRODUCTION 1.1 My name is Stephen Richardson and I am the managing director of StephenRichardsonPartnership, sub-instructed by Carter Jonas LLP. 1.2 I am a graduate of Trinity College, University of Dublin and I have been a Member of the Royal Institution of Chartered Surveyors since 1978 and a Fellow since I have over thirty five years experience in dealing with the hotel property sector. 1.3 I was instructed by Carter Jonas, on behalf of Canterbury City Council (the Council) on 18 th October 2017 to provide advice in respect of the Scheme. I was further instructed on 23 rd November 2017 to give evidence at this inquiry as an expert witness in relation to the efforts made to acquire land and rights by agreement. 2. SCOPE OF MY EVIDENCE 2.1 My proof of evidence comprises the following sections: Section 1: Introduction, Experience and Instructions Section 2: Approach to assessing hotel Viability Section 3: The Hotel Market in Canterbury Section 4: The position of the Scheme in the Market Section 5: Viability assessment and Delivery Section 6: Benefits Section 7: Objections Section 8: Conclusions Section 9: Statement of Truth Section 10: Declaration 3. The Scheme 3.1 The Scheme, including the Order Land, proposes a 129 bedroom hotel, operated as a Hampton by Hilton, together with a roof-top restaurant operated by a third party, and having a separate entrance at ground floor and two retail units which will be provided in the listed properties Stephen W Richardson MA FRICS 2

3 fronting St. Margaret s Street. 3.2 The Scheme requires the acquisition of land and rights from Whitefriars Canterbury Unit Trust ( WCUT ) across plots 1 to 5. WCUT hold a lease of the Marlowe Arcade shopping centre from the Council dated 27 th September The lease includes all the Order land as well as additional land as described in the first schedule to the lease. 3.3 Rights are also required across part of the yard that WCUT advise is demised to Primark Stores Limited ( Primark ) within CPO Plot 4. These rights are intended for use during the construction period for occasional deliveries only that would be arranged in advance and outside normal operating hours. 3.4 The rights to be acquired in plots 2 to 5 would be over the same land as the rights enjoyed by tenants of Marlowe Arcade and Graylaw House but no rights are to be acquired from those parties. 3.5 The guidance issued by Government entitled Guidance on compulsory purchase process and the Crichel Down rules for the disposal of surplus land acquired by or under threat of compulsion (the Guidance ) includes guidance on negotiations for acquiring land by private treaty before and in parallel with the CPO process. 3.6 I have been asked to assess the viability of a Scheme on this basis, termed Scenario 1, together with two further Scenarios, 2 and 3, where the Order Land is not included. 4. VIABILITY 4.1 The viability of Scenario 1 is marginal relative to normal commercial terms; the development cost in respect of the hotel is eminently reasonable, at 80,000 per bedroom (before fees, etc.,) but additional costs, termed Facilitating Works, amounting to some 1.5 million, have a significant effect on viability. The Facilitating works include the required Archaeology Investigations, Asbestos Removal and listed Building works. These additional costs are a constant, whichever Scenario is assumed. However, the developer is prepared to proceed notwithstanding the level of viability, and has obtained, I understand, funding to allow the development to proceed. Stephen W Richardson MA FRICS 3

4 4.2 Scenarios 2 and 3 are unviable, as the Gross Development Value is reduced (because of the reduction in the number of bedrooms) and whilst the development cost is also reduced, the Facilitating Works increase as a proportion of the overall Development Costs. On this basis, and in commercial terms, no developer would proceed. 4.3 SDL (the Developer) is prepared to proceed on the basis that it has already made a significant investment in completing the Facilitating Works, and that a 129 bedroom hotel can be developed. 4.4 I also understand that funding has been obtained allowing the development to proceed, notwithstanding that viability is marginal. 5. Benefits 5.1 The City is under hotelled in the provision of modern hotel accommodation, and the proposed hotel will be of a standard below the nearby Abode Hotel (4 star) and the remaining hotel stock, which is of a budget standard or B&B in private hands. Its provision follows the City s local plan, and should allow longer dwell time by leisure travellers and benefit other commercial occupiers in the city centre. 6. OBJECTIONS 6.1 Five objections have been received in respect of the Order from the following parties: i. WCUT ii. Primark iii. Jessops iv. Costa v. Lloyds 6.2 Mr Paul Astbury and others will deal with the Objections. 7. CONCLUSIONS 7.1 I am of the opinion that the proposed hotel, a Hampton by Hilton will enhance the room stock available in Canterbury. Stephen W Richardson MA FRICS 4

5 8. STATEMENT OF TRUTH The statement of truth in my proof of evidence also applies to this summary of evidence. Stephen Richardson MA FRICS Chartered Surveyor 12 January 2018 Stephen W Richardson MA FRICS 5