Agenda item

Report of the Director of Property Services and Development

The Cabinet considered a report of the Director of Property Services and Development which indicated that in June 2020, the Cabinet Member for Jobs, Regeneration and Climate Change approved the grant of a long leasehold interest of Parkside Paradise Street to Rainier Developments Ltd (RDL), together with the re-provision of Newgate Court industrial units. The report outlined proposed changes required to the development and lease terms to facilitate the revised scheme on land at Parkside / Paradise Street.

Due diligence work commissioned by RDL prior to submission of a planning application included an archaeological evaluation of the site. This confirmed the extent of the City Wall, already known to run through the site but in addition has uncovered significant additional remains. These additional constraints and additional development costs have led RDL to redesign the scheme. This has resulted in fewer proposed residential units and no longer enables the reprovision of the Newgate Court industrial units.

To protect the Council’s financial position, any land not proposed to be developed will be restricted to open space or surface car parking. Therefore, if in the future it becomes economic to develop these areas of land the Council will receive further value from the site.

A financial review of the revised scheme has also indicated to RDL that in order to assist with funding the delivery of the development, the investment funding market is seeking to remove the ground rent element payable to the Council of the original proposal and replace with an initial capital premium instead.

Subsequently as a result of these new findings RDL have advised that they are unable to progress on the previously agreed terms, however, they are prepared to proceed and deliver a scheme based on their revised offer outlined below:

• Two residential blocks totalling 335 units (25% allocated as affordable housing). This is a reduction from 494 unitsacross three blocks.
• Premium payment for a new long ground lease with a peppercorn rent. New 4,000 sqft of ground floor retail space for a convenience store at the base of the residential tower block with the Council to retain income offsetting the loss from the industrial units. This is a change from the previous terms, moving from an annual ground rent to a ‘one-off’ capital premium payment.
• 999-year lease has been requested instead of the previous 250 years. (In response to proposed government legislations and funding requirements).

The revised scheme and proposed uses concur with the Parkside area policy of the City Centre Area Action Plan (AAP), which supports residential development in principle as part of the wider ‘London Road Gateway’. The scheme will look to retain the historic findings within the new development to preserve and protect the medieval link and connection with Coventry as a city with deep historic history. Notwithstanding this, the final scheme that will be delivered will be subject to the Planning application and decision-making process. If this results in material scheme changes then the terms of the disposal may need to be revisited in due course to take these changes into account.

The report sought approval for the revised baseline terms enabling the long leasehold disposal of the land to RDL, subject to planning approval.

A corresponding private report detailing confidential financial matters was also submitted for consideration (Minute 13 below refers).

RESOLVED that Cabinet:-

1)  Approves the grant of a long leasehold interest of Parkside Paradise Street on the terms outlined in this report and as shown shaded in Appendix 1 to the report to Rainier Developments Ltd.

2)  Delegates authority to the Director of Property Services and Development, following consultation with the Chief Operating Officer, the Director of Law and Governance and the Cabinet Member for Jobs, Regeneration and Climate Change, to agree the final terms of the lease, make any subsequent variations to these terms, enter into any necessary easements/wayleaves and complete the necessary legal documentation.