S106 Management acted for the applicant through 3 applications on the same site, with a long-term strategy to help deliver an originally unviable site.
The original scheme submitted was for 26 units. S106M completed a viability report on the proposed scheme which was then reviewed and a reduced contribution suggested. We further advised the applicant to properly establish the underlying value of the site through a smaller 9 unit scheme.
This sub-policy threshold scheme was consented to establish the underlying value of the site.
Following a redesign, a 24 unit scheme was then submitted with an accompanying viability report which fully took into account the value of the 9 unit scheme as a benchmark land value.
This allowed the site’s full value to be taken into account through an alternative use value (AUV) approach.
This was assessed through a full residual appraisal of the 9 unit scheme.
S106M successfully supported the applicant through negotiations with the council and their consultant, a large multi-national planning and development consultancy. All inputs were agreed and a zero upfront contribution negotiated on the basis that an S106 agreement was signed including early and late review mechanisms to ensure if the development’s viability improved considerably then later contributions might be made.
We further acted for the applicant in negotiating the terms of this S106 agreement to ensure that the correct figures were adopted in the late review mechanism, and provided modelling for the applicants to demonstrate the impact of different scenarios on the late review mechanism.
This case demonstrates the importance of fully establishing site value in viability cases, and how this can be considered as part of a wider planning strategy to ensure a deliverable site. It also outlines the importance of considering alternative use value as a method of properly establish the required ‘premium’ as part of the EUV+ methodology used inviability assessment, and outlines the importance of late review mechanisms aspart of a negotiation. In addition the importance of the drafting of S106 agreement terms can often be forgotten – but these can be vital to ensuring a deliverable site.
If you require support with your planning viability strategy, alternative use value or drafting S106 agreements, please contact us today to discuss.
Contact us today to discuss your s106 affordable housing viability needs.