Plea by developers to reduce affordable housing contribution to be heard for second time

A plea by developers building more than 50 new apartments to reduce their contribution towards affordable housing will be heard for a second time tomorrow.

The Mandale Group is currently working to create living space above shops on Henblas Square in Wrexham town centre.

When permission was granted for the scheme to go ahead, councillors attached a condition for a sum of around £300,000 to be paid towards the provision of affordable housing elsewhere in the county borough.

However, the company was accused of greed at a planning committee meeting last month after it attempted to reduce the sum to just under £29,000.

Councillors asked for further information from the firm after representatives claimed that the original amount would render the development unviable.

A new report is set to go before members tomorrow, which shows their anticipated profit stands at more than £250,000.

In their submissions, agents acting on their behalf said the profit levels were already below what most developers consider acceptable.

They said: “The revised viability appraisal has shown a revised profit of just over £250,000.

“This is approximately half that shown on the previous appraisal and represents a reduced profit margin of eight per cent.

“This profit is well below that which many developers would normally accept.

“However, Mandale are not a typical developer, and by using a private rented sector model on this occasion their risk is reduced and they have accepted the scheme will generate a lower profit.

“Mandale’s business model for such projects relies on a quick turnaround from purchasing a site, through planning and construction, to sale.”

They added that the company was happy to pay a revised sum of £28,816 as they felt not to do so would be ‘churlish’.

Council officers have also supported the group in its bid to lessen the money required.

Lawrence Isted, head of environment and planning, said profit levels were an important consideration for the committee. He added that the scheme was an important part of the authority’s ambitions for the town centre.

He said: “I am satisfied that the revised appraisal shows an accurate assessment of the costs incurred to develop the site, which will result in a
financial return well below what is considered to be a reasonable profit.

“The council is required to give significant weight to this financial constraint and factor this against the other benefits of the proposed development.

“As mentioned in my previous report, the proposal would result in the redevelopment of this prominent building which is important to the successful delivery of the town centre masterplan.

“There is clearly little financial incentive based on the current viability assessment to convert the building for residential use or any other purpose.”

Councillors will meet to consider the report on tomorrow .

By Liam Randall – BBC Local Democracy Reporter (more here on the LDR scheme).