Regeneration and Property Committee. 16 March 2017

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1 Regeneration and Property Committee 16 March 2017 Subject: Director/Head of Service: Access rights relating to the compulsory purchase of land to the rear of 7-10 St Margaret's Street, Canterbury, CT1 2TR (the Slatters Hotel site). Tricia Marshall, Director of Resources Decision Issues: These matters are within the authority of the Regeneration and Property Committee. Classification: CCC Ward(s): Summary: This report is open to the public. WESTGATE The report seeks authority to minor amendments to the proposed Compulsory Purchase Order in relation to the service yard rear of the Slatters Hotel development site. There is no further land being acquired. To Resolve: 1. That the Head of Legal in consultation with the Head of Property be authorised to: (i) amend the proposed compulsory purchase order to incorporate the creation and acquisition of new rights, being the right to use part of the service yard to the rear of the development site as a temporary construction compound and for scaffolding and hoarding and crane oversail purposes during the construction stage of the development, and using part of the service yard during and after construction to pass and repass and to service the development. (ii) (iii) Make such amendments and additions to the draft Statement of Reasons as deemed necessary to reflect the need for these additional rights. that the Head of Property be authorised to settle any further incidental matters necessary to bring the matter to completion. Next stage in process: Progressing the CPO process and continuing in tandem to negotiate the acquisition of land and necessary rights

2 by private treaty negotiations. SUPPORTING INFORMATION 1. Introduction 2. Detail At its meeting of 16 December 2016 the Regeneration and Property Committee authorised the Council to make and pursue the confirmation of a Compulsory Purchase Order to facilitate the acquisition of land to the rear of 7-10 St Margaret's Street, Canterbury, CT1 2TR under section 226(1)(a) of the Town and Country Planning Act The Council has an existing pedestrian and vehicular right of way across the Marlowe Arcade service yard in order to access and then service the Slatters Hotel site. However, following a legal review, it is not clear whether that right permits vehicles or pedestrians to remain within the yard during unloading or loading operations although case law suggests that it may do. Once developed and operational, the Slatters hotel development would need to carry out some of its servicing arrangements from within the service yard for the hotel, restaurant and shop units, and securing a permanent right allowing it to do so would remove any scope for uncertainty. This is no different from the other retailers that back on to the service yard and utilise the yard for all their stocking and servicing requirements. The land over which this right would be secured is verged red and shaded blue and marked as plots 2, 3,4 and 5 on the attached plan. In the event that the provision of a loading bay cannot sensibly be incorporated within the service yard, it would need to be provided within the footprint of the new hotel development itself. This would involve displacing the hotel meeting rooms, gym and back of house offices to the upper parts of the development, with knock on impacts of the loss of bedrooms, which will in turn directly impact upon the viability of the scheme. Also the loading bay provision could make servicing the ground floor retail units almost impossible. In addition, it has become apparent that during the development phase, a small part of the service yard will be needed as a temporary construction compound for the period of the construction of the development. The land required for this construction compound is shaded blue and marked as plots 3 and 4 on the attached plan. On completion of the development, the access and servicing rights described above will continue to attach to plot 2, 3, 4 and 5. However, the right to use of plots 3 and 4 for a construction compound will then expire, as indeed will the use of plot 2 for scaffolding and hoarding purposes and crane oversail. In addition there is a need to slightly extend the temporary site hoarding enclosure and to encompass a strip immediately behind the former shoe shop [No 10 St Margaret Street]. This is for health and safety reasons during the demolition and construction works, to enable the erection of a protective hoarding to the site itself and also to the corridor access from St Margarets Street used by the residents of the flats at 10a, b & c Marlowe Arcade. It had originally been expected that the Party Wall procedures could have covered this aspect off, but this has now been confirmed by the developer s party wall specialist not to be the case. The land required for the temporary site hoarding is incorporated within and marked as Plot 2 on the attached plan and shaded blue.

3 The original Committee resolution only dealt with acquisition of the strip of pavement land required to the rear of the development site (shown as Plot 1 on the attached plan and shaded pink) and temporary rights, and not the creation of new rights. Whilst it had been hoped that the new development could accommodate all of the servicing requirements within its footprint, following further refinement of the construction plans by the architects, there is a risk that the Hilton template requirements may not be able to be accommodated on the ground floor now, if loading bay facilities are to be incorporated within the built footprint. Accordingly, it is proposed to reflect this additional requirement within the CPO and Statement of Reasons which are due to be formally submitted to the Secretary of State for Communities and Local Government for confirmation. Justification for the use of compulsory powers of acquisition The considerations that the Council must take into account when deciding whether to authorise the use of its compulsory powers of acquisition as they relate to the Development are set out in the attached Committee Report dated 1 December 2016 (the Original Committee Report) under the headings: Need for the redevelopment of the Site and Policy Background (Section 4) The Scheme and its Policy Background (Section 5) Current Land Ownerships (Section 6) NB: the freehold of the land over which the new rights are being created, is already held by the Council and is subject to the leasehold interest described in paragraph 6.4 of the annexed report. Efforts undertaken to acquire the land by agreement (Section 7) Negotiations regarding the rights described above are at a preliminary stage with the current lease holder. However, government guidance described at paragraph 7.1 of the Original Committee Report recommends that CPO proceedings should be run in parallel with negotiations. The Council will continue to negotiate with the leaseholders to acquire the above new rights up to the point that its powers under any confirmed CPO are exercised. Any Impediments / obstacles to the delivery of the Scheme (Section 8) Statutory Powers (Section 10) Outline of the Compulsory Purchase Procedure (Section 10) Relevant considerations and justification for making the proposed compulsory purchase order (Section 12) Overall justification: whether there is a compelling case in the public interest for the Order (Section 13). Human Rights (Section 14) Equalities Impact (section 16) Members are referred to these considerations as set out in the original Committee Report (subject to the additional comments set out above) and which apply equally to the exercise by the Council of its powers to acquire the new rights described in this report. With reference for the overall justification for the use of the Council's powers of compulsory acquisition as described in the Original Committee Report, and for the reasons explained earlier in this report Officers consider that the additional rights described in this report are necessary to facilitate the development and its subsequent use and (as explained in the Original Committee Report), that the

4 development will contribute to the promotion or improvement of the economic, social and environmental well-being of the Council's area. For the reasons set out in the Original Committee Report, Officers consider that there is no reasonably appropriate alternative to the Scheme that would secure the benefits sought. 3. Relevant Council Policy/Strategies/Budgetary Documents (a) (b) Corporate Plan : Objective 9 Supporting business growth. Corporate Property Strategy : Objective CPO3: To use the portfolio effectively to meet the strategic priorities of the council in terms of, service delivery, income generation and community benefit. 4. Consultation planned or undertaken Negotiations are ongoing with WCUT who are aware the Council may resort to its powers of compulsory acquisition, although negotiations are ongoing with them to acquire the necessary interest in parallel with promoting the CPO. 5. Options available with reasons for suitability (1) On the basis of leaving matters as they currently stand [ie Do Nothing/ Do Not include the acquisition of this additional right within the CPO procedures], the developer may be unable to meet the Hilton brand criteria for the hotel, and a lesser brand will need to be found to replace Hilton. If the current franchise of Hampton by Hilton withdraws its interest from the scheme, there is no certainty at this stage that an alternative hotel operator would be willing to develop out a lesser scheme. In any event this possibility would introduce delays and funding risks, and leave an unsightly development site and continuing deterioration of the Listed Building which has deteriorated progressively over the last two years (2) Proceed with amending the CPO Notice. This would enable the scheme to progress without delays to programme, avoiding concerns for Hilton and removing the likelihood of funding risks. 6. Reasons for supporting option recommended, with risk assessment It is recommended that Members agree to the incorporation of these additional temporary and permanent rights within the proposed compulsory purchase order. This will give the developer the necessary confidence to move forward, and to enable the construction phase of the development to progress, and thereafter, it will ensure that the development can work operationally, removing any possible uncertainties where they might exist. This will reduce the risks to the scheme, and consequential funding difficulties or delays to the completion of the scheme that might otherwise arise where uncertainties exist, and safeguard the deliverability of the development scheme. 7. Implications (a) Financial Implications - There will be direct costs to the Council of acquiring any land or rights, which costs are within the budget framework.

5 (b) Legal Implications - Time and resources will be involved in dealing with the statutory processes involved with making CPO s. (c) Equalities This issue was discussed at Section 16 of the 1 December 2016 report to this Committee (attached). In any event, it is considered that the impacts of the CPO process on the adjacent business properties will be limited and will not give rise to negative equality effects, and there is a strong likelihood that the necessary rights will be purchased prior to the CPO resolution. Other implications (d) (e) (f) (g) (h) (i) (j) Staffing/resource - Officers time will be incurred guiding the process through and dealing with matters arising and attendance at any public enquiry if required. Property Portfolio - The proposals will improve the portfolio s overall rate of return. This transaction is consistent with the continuing good and proactive management of the portfolio, reversing the decline of the property and encouraging development and new businesses to the area. Environmental Sustainability/Biodiversity - none identified Planning/Building Regulations - none identified Human Rights issues - as set out in the December 2016 report to this committee. Crime and Disorder - none identified Safeguarding Children - none identified 8. Conclusions Agree option (2) above in line with the recommendation, to assist with a smooth development programme, and bring forward at the earliest date possible the completed hotel scheme, with the regeneration benefits that it will bring to the immediate locality Contact Officer: David Kemp Property Portfolio Asset Manager Telephone: Appendices 1. CPO of land to rear of 7-10 St Margarets Street, Public Report to Regeneration and Property 1 December Plan showing proposed Order Land 3. Draft Statement of Reasons accompanying 1. above

Date: 9 February East Walworth. Deputy Chief Executive

Date: 9 February East Walworth. Deputy Chief Executive Agenda Item 14 196 Item No. Classification: Open Date: 9 February 2010 Meeting Name: Executive Report title: Ward: From: Heygate Estate: Compulsory Purchase Orders East Walworth Deputy Chief Executive