Addendum 3 – Gateshead Community Infrastructure Levy (CIL) Consultation Feedback
Gateshead’s Preliminary Draft CIL documents, and the related Draft Infrastructure Delivery Plan, were consulted on as part of the proposed major changes report and supporting evidence base documents.
Community Infrastructure Levy
The Community Infrastructure Levy (CIL) is a new way of collecting developer contributions to help fund infrastructure projects. It alsoallows local authorities to charge a tariff, at a locally set rate, on many types of new development. Money can be used to pay for a wide range of additional infrastructure that is required as a result of development, including transport schemes, green infrastructure and community facilities.
As part of this consultation, several documents relating to CIL were published for comments:
· Gateshead Preliminary Draft Charging Schedule (PDCS)
· Gateshead Draft Residential CIL Zones Map & Values Map
· Gateshead Draft Commercial CIL Zones Map & Values Map
· NewcastleGateshead Viability Assessment (VA)
· NewcastleGateshead Preliminary Draft Charging Schedule Background Paper
· Gateshead Funding Gap Schedule
· Draft NewcastleGateshead Infrastructure Delivery Plan
Preparation of the Document
As set out in the CIL Regulations and Guidance, we are engaging with the development industry, stakeholders, local communities and interested parties to help develop a CIL Charging Schedule that balances viability and infrastructure delivery. As part of the preparation of the CIL, this report sets out the comments received from the consultation into the Preliminary Draft Charging Schedule.
Next Steps
The Council will consider all of the representations received and they will be used to inform a further iteration of the Viability Assessment, CIL charging zones and CIL rates which will be consulted on as part of the Draft Charging Schedule.
Consultation Approach
The consultation on Gateshead’s CIL and Infrastructure Delivery documents began on the 18th July and officially closed on the 12th October 2012. It ran in line with the consultation on the NewcastleGateshead One Core Strategy major changes report and supporting evidence base.
Comments could be made on the documents via a number of methods:
o At organised events attended by planning officers
o By post or email
o Using the online consultation system at the following web address: https://onecorestrategyng-consult.limehouse.co.uk/portal|.
Response Summary
15 submissions were received relating to the PDCS consultation. 1 representation was submitted online through the online consultation portal, and 14 were submitted by post or email. A full summary of the comments is available at the end of this addendum.
What was said?
ASDA Stores Ltd, via Thomas Eggar, submitted comments with specific regard to CIL and land for retail. They felt that the correct balance between funding infrastructure and its potential effects on economic viability of development has not been achieved, and there is a need for the Council to rethink the approach towards retail. It was also stated that as the retail charges are subsidising other forms of development, this may lead to a disincentive to invest in retail sectors affected.
ASDA stated that the viability modelling thresholds use do not reflect the retail threshold charges proposed and the adoption of a differential size threshold for retail development is contrary to Regulation 13(1) and is not justified sufficiently. Capital Shopping Centres also noted that the retail schemes used as part of the viability assessment do not reflect the retail uses at the MetroCentre, and also object to the application of differential rates for retail development (as opposed to geographic areas), as contrary to CIL Regulations.
ASDA commented that the retail charges do not recognise the importance of supermarkets in the regeneration of existing centres and surrounding areas, are disproportionately high and they also argue that the retail charges proposed do not reflect the costs for mitigating the impact of the type of development proposed.
Both ASDA and Capital Shopping Centres stated that the documents fail to make allowances for s106 agreements. It was also noted that some infrastructure projects that are to be funded by CIL may already have benefitted from s106 agreements. Both representations also indicated that it would be beneficial for a relief policy to be incorporated into the CIL.
Both ASDA and Capital Shopping Centres noted support for the inclusion of an instalment policy, with Capital Shopping Centres requesting that the policy is included as part of the schedule rather than CIL guidance.
Capital Shopping Centres questioned the assumptions used for retail schemes in the VA as part of their representation. They also noted that the funding gap/CIL schedule should include improvements to the Metrocentre rail station.
Sport England objected to the proposed distribution of CIL monies obtained on the grounds that the evidence base relating to sport facilities informing the One Core Strategy is inadequate.
Pendragon PLC, via Rapleys, stated that the charging of vehicle sales (sui generis) as part of retail sales has not been justified in the viability assessment. They also stated that there is currently inadequate justification included in the document for residential and commercial value bands.
Persimmon Homes supported CIL charging in Green Belt areas and support that the majority of brownfield areas will not be required to pay CIL contributions.
Natural England stated that further consideration should be had to the conformity of the Local Plan with the NPPF and whether there is a requirement for GI delivery, and the delivery of other policies, to be CIL funded. Natural England also noted that provisions may be useful to be made within the CIL to enable funding for essential green infrastructure in the event of a strategic funding gap and where such an investment would represent good value for money
Some organisations asked to reserve their right to comment on documents out to consultation, until a later date and await opportunities for further consultation.
BAE Systems, through BNP Paribas, supported the CIL commercial and residential zones, but ask that an exemption from CIL liability for Section 73 application to vary or remove conditions for planning permissions granted before CIL is adopted, should be included.
Messrs Willey and Mr J Stokoe, through their agent George F White, submitted representations on the Viability Assessment. George F White stated that the appraisals are based on nominal site values which do not take into account specific site differences and that it is incorrect to assume a benchmark value as this fails to consider landowner financial situations or tax implications. They also state that using Residual Land Value is inaccurate and note that views of landowners have not been considered, resulting in the VA being weighted heavily towards developers. George F White stated concern that, whilst the Viability Assessment states that the best method of understanding Benchmark Value is through comparables, this was considered too difficult and therefore discounted. George F White therefore called for clarification on how residual land values have been calculated.
McCarthy and Stone, via The Planning Bureau, gave support for no CIL charges being placed on C2 developments, and stated that incentives should be considered for the development of brownfield land. They want further consideration of provision of specialist housing for the elderly on brownfield sites and the additional costs of building in such locations and there should be greater consideration of the future housing needs of older people and that the CIL acknowledges this.
The Highways Agency gave support for development contributions to be secured through the use of planning obligations and is particularly supportive of using contributions towards the cost of new and improved transport infrastructure to mitigate adverse effects. Whilst the Highways Agency had no particular comment on the proposed rate, they are generally supportive of the methodology used to define the rates.
JK Property Consultants stated that although the principle of CIL is supported, this is the incorrect time to introduce such charges, with the potential to delay development expect for in high value areas. They also note that the assumptions used to calculate commercial rent and yield are too high, CIL is not feasible for residential development in the city centre and brownfield land, and is unlikely to be feasible on office, industrial, neighbourhood and retail developments. JK Consultants note that CIL is also unlikely to be feasible on hotel development but needs to be tested on a case-by-case basis. They suggest a new approach to introducing CIL over time and location/uses to ensure viable development before the introduction of CIL.
Taylor Wimpey stated that the residential scheme types at figure 4 of the viability assessment are not reflective of the current market requirements, or that of sites that would be likely to pay CIL. They also questioned the residential values map, particularly the mid/high value areas, stating that the maps should be reviewed around Kibblesworth, High Spen and Dunston Hill.
Taylor Wimpey also noted that the Headroom Calculations apply gross land values, which is felt to be incorrect and the net land value should be applied instead. They agree that build costs and fees, as well as developer profits are reasonably accurate with the exception of sales and marketing costs which are too low. They also state that residential land values for Gateshead are much lower than for Newcastle, therefore the Viability Assessment study is flawed in assuming they are the same. This will also impact on the Benchmark value that has been set, which is deemed to be unrealistic.
Taylor Wimpey strongly objected to the proposed rate of £88/m² for Zone A and believe that the rate for Zone B has great potential to increase. Taylor Wimpey also object to the proposed CIL headroom figures for non-urban Zone A, and note that a 1/3rd margin for error should be applied from the headroom rate when setting CIL rates.
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Schedule of Comments
Comment Ref / Agent / Surname / Forename / Organisation / CommentsGCIL1 / Savills / Ravenside Investments Ltd (Retail World) / 1. PDCS Background Paper – Wish to reserve the right to comment on behalf of Ravenside at a later date.
2. Viability Assessment – Wish to reserve the right to expand on representations at Published Draft Charging Schedule Stage.
3. Ask the LA to confirm whether they intend to review the current evidence base.
GCIL2 / Thomas Eggar / Asda Stores Ltd. / Consider that the Council has not achieved the right balance between funding infrastructure and its potential effects on economic viability of development. And suggests the Council fundamentally rethinks its approach to retail.
GCIL3 / Thomas Eggar / Asda Stores Ltd. / The retail charges are subsidising other forms of development with the consequence that there will be a disincentive to invest in retail sectors affected.
GCIL4 / Thomas Eggar / Asda Stores Ltd. / Adopting a differential size threshold for retail development is contrary to Regulation 13(1) and is not justified sufficiently.
The viability modelling thresholds used in the Viability Assessment set out on page 9 do not reflect the size thresholds proposed for retail charging. Thus the Council's decision to levy differing CIL rates could be seen as unreasonably favouring smaller units and/or constituting a policy decision to support smaller units at the expense of larger units.
GCIL5 / Thomas Eggar / Asda Stores Ltd. / The Council should consider whether in varying form the Use Classes Order the definition of use for retail charges have been correctly applied.
GCIL6 / Thomas Eggar / Asda Stores Ltd. / The viability modelling for commercial developments is inadequate as it does not make an allowance for s106 contributions. Such costs can amount to £1m.
GCIL7 / Thomas Eggar / Asda Stores Ltd. / The retail charges do not recognise the importance of supermarkets in helping to rejuvenate and regenerate existing centres and surrounding areas, e.g. Newcastle Shopping Park in Byker has created 202 jobs recruited 89% from within 5 miles of the store. Where development is on brownfield sites that have been vacant for some time they are likely to have to pay the charge for the full floorspace rather than a deduction for pre-existing active floorspace.
GCIL7 / Thomas Eggar / Asda Stores Ltd. / The Council should adopt an exceptional circumstances relief thus for developments of marginal viability, allowing them to come forward as simply exempting them from s106 obligations is unlikely to be sufficient.
GCIL8 / Thomas Eggar / Asda Stores Ltd. / Support the intention of an instalments policy but request the Council considers that many major development projects are implemented in phases. It is requested that the council ensures that developers are not disadvantaged by submitting an application for full rather than outline planning permission.
GCIL9 / Thomas Eggar / Asda Stores Ltd. / Considers that historical s106 payments were raised disproportionately from a number of limited class of developments with the majority of minor developments allowed to proceed without such payments.
GCIL10 / Thomas Eggar / Asda Stores Ltd. / It is suggested that CIL charges should be set on the basis of a district wide assessment of infrastructure need with the total cost being divided between the total planned developments anticipated.
GCIL11 / Thomas Eggar / Asda Stores Ltd. / The retail charges proposed do not reflect the costs for mitigating the impact of the type of development proposed. As new supermarkets are opening it can be argued that the infrastructure requirements are lessening as travel distances are lessening.
GCIL12 / Thomas Eggar / Asda Stores Ltd. / Some infrastructure projects to be funded by CIL may well have benefitted from s106 payments already.
GCIL13 / Thomas Eggar / Asda Stores Ltd. / Retail charges are disproportionately high compared to other types of development and across exempted geographic areas.
GCIL14 / Thomas Eggar / Asda Stores Ltd. / Suggest we charge a flat rate across development types and areas, applying exceptional relief where lack of viability is proven.
GCIL15 / McGuire / David / Sport England / Objects to the perceived inadequacies of the Core Strategy evidence relating to demand for sporting facilities and thus to the scope of the potential use of CIL monies.
GCIL16 / Rapleys / Pendragon PLC / The charging of vehicles sales (sui generis), as part of Retail, has not been justified in the VA. Request that car showrooms are tested, and Pendragon offer to provide cost and value information.