Planning matters

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Vacant building credit: Boosting the viability of brownfield sites
It is no secret that the redevelopment of brownfield sites is generally beset with more abnormal costs than a typical greenfield site. This is often a major hurdle that can delay or even stymie the redevelopment of brownfield sites. It is the viability issues that stalls or prevents development, or makes such sites less attractive to the market. This is where Vacant Building Credit [VBC] is relevant and why landowners and prospective developers should think twice before demolishing existing buildings. The recent consultations on the revised National Planning Policy Framework [NPPF] and Planning Practice Guidance [PPG] both show a clear drive and emphasis on a ‘brownfield first’ approach to new development. They set out proposed changes to how viability is considered in planning therefore VBC is a particularly topical element of the current PPG. VBC is a national Government, PPG-derived financial incentive for the development of brownfield sites with vacant buildings. VBC does not exist in Wales or Scotland. The credit is used to offset existing floorspace against proposed, so as to reduce/ remove locally-set contributions towards affordable housing that would arise via planning obligations. Of course, the PPG is only guidance and therefore can be applied to local circumstances as a material consideration - or not, by individual councils. VBC has the potential to help prospective developers with issues of viability, depending on a council’s own plan policies and their stance on the guidance. This blog explains what VBC is, when it does and doesn’t apply, and how it may benefit project viability. Background VBC was introduced by a written ministerial statement of 28 November 2014 as an incentive ‘… to tackle the disproportionate burden of developer contributions on small-scale developers, custom and self-builders[1]’. So why are the details of VBC not widely known? It may be because its introduction was challenged in the High Court [2] and the VBC guidance was subsequently – but only temporarily -withdrawn. The Government appealed the decision and it was reinstated in the PPG in May 2016. It is now proposed to be referenced in the new NPPF (currently at draft paragraph 64) which would add to its weight.   VBC policy Policy and guidance on VBC is found in both the original written ministerial statement and the PPG paragraphs on planning obligations [21 to 23]. Paragraph 64 of the draft NPPF includes reference to vacant buildings offsetting affordable housing contributions, although it is not explicitly described as VBC. Local Plan policies relating to VBC are very thin on the ground; one of the few examples is in the Draft London Plan, which includes Policy H9 (Vacant Building Credit).   When VBC applies According to the PPG, VBC is applicable in cases where either a vacant building is brought back into lawful use, or it is demolished and replaced by a new building. In either case, the gross floorspace of the relevant vacant building(s) can be used as a ‘credit’ when the LPA calculates any affordable housing contribution. Vacant floorspace can potentially offset the affordable housing requirements for any given site by a proportion relating to the quantum of existing floorspace compared to that proposed. VBC will not normally apply if the building has been made vacant for the sole purpose of the re-development (and claiming VBC), nor if the building is covered by an extant or recently expired planning permission for the same, or substantially the same development. Policy H9 of the draft London Plan holds the policy position that VBC is ‘in most circumstances’ not appropriate in London and unlikely to bring forward additional development. The draft policy includes criteria where exceptions might arise and VBC could be applied. For a building to be considered vacant, it has to have been vacant for a continuous period of at least five years before an application is submitted. The applicant is also required to provide evidence that the site has been actively marketed for at least two of those five years at realistic prices. In short, the draft London Plan is written to discourage the application of VBC; it is implicit in draft Policy H9 that viability is not seen as a constraint to housing delivery on brownfield sites. In the rest of England, there are - as yet - no other similarly drafted policies.   The maths: How VBC can boost viability of brownfield development The basic calculation can be summarised with the following simple formula: (Existing Floorspace/Proposed Floorspace)*Policy Requirement=Site Affordable Housing Requirement The PPG includes an example at Paragraph: 022 Reference ID: 23b-022-20160519. And here is a worked example here for clarity, based on the following assumptions:         Existing gross floorspace: 15,000 sq. m Policy affordable housing requirement: 30% Proposed development: 352 dwellings with a total floorspace of 30,000 sq. m (representing an average dwelling size of 85 sq. m) The difference between the existing gross floorspace (vacant buildings on site) and the proposed new build floorspace is 10,500 sq. m i.e. the proposed development would result in 10,500 sq. m more of development in this example. On this basis the Affordable Housing Contribution is (15,000/30,000)*30%=15% Rather than a requirement of 106 (30%) affordable units the requirement is halved to 53           From the above calculation it can be deduced that if the floorspace to be demolished is greater than the proposed floorspace, the affordable housing contribution would be zero. There are many other ways in which vacant buildings can affect the planning strategy. Developers and landowners would need to consider the financial burden of rates that have to be paid by keeping a vacant building on-site; the community infrastructure levy ‘in use’ requirement is another consideration. There are also wider benefits of retaining vacant buildings on-site, while the development process is underway. One example is in relation to the consideration of visual impact. The mass or scale of an existing building can be a helpful material consideration in comparison with the proposed development. Existing buildings on-site can also provide an ‘existing’ position in terms of assessing the impact of a proposal’s traffic generation. This can help with making the case for acceptable highways impact of new development. VBC means there can be value in keeping vacant buildings standing, until a planning application for redevelopment has been determined; this element of a site’s wider planning strategy may improve scheme viability, by reducing or removing any requirement for affordable housing. [1] Written Ministerial Statement (WMS) of 28 November 2014[2]  West Berkshire District Council and Reading Borough Council v Secretary of State for Communities and Local Government [2015] EWHC 2222 (Admin)  

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Released for regeneration: what lies ahead for Reading Prison?

Released for regeneration: what lies ahead for Reading Prison?

Nick Bishop & Layla Vidal-Martin 13 Jul 2018
This Monday, Reading Council will decide whether to support proposals to utilise Reading Prison for the development of a new theatre and a range of complementary uses (including enabling development) in accordance with the vision set out by Theatre and Arts Reading (TAR). There are a number of possible outcomes for the site but the final scheme will need to respond to a range of policy aspirations within a viable commercial model. In this blog, Lichfields considers how the preferred masterplan might deliver a suitable mix of uses for the site, and the scale and range of economic benefits that might arise from different development scenarios.   The heritage-led re-use of historic sites can offer an unrivalled richness of regeneration outcomes. Historic England’s recent Risky Business? report (researched and written by Lichfields) illustrates the considerable potential that such sites can have to deliver environmental, social and economic benefits alongside conservation. The study, which focused on successful Heritage at Risk! projects in London, drew on available metrics from project evaluations, planning applications and interviews, and was supplemented with estimates of economic impact using our ‘Evaluate’ tool. The research demonstrates that historic sites can deliver tangible regeneration impacts at the local level, revitalising local landmarks, investing in local services, creating cultural destinations and optimising the use of land. Reading Prison is not ‘at risk’, but it is an incredibly important and sensitive historic site in the town, which has been awaiting a new use since 2014 when the Ministry of Justice announced its closure. It occupies the site of the former Reading Abbey, founded in 1121 and once one of the most important pilgrimage centres in England. The entirety of the prison site is scheduled and of high archaeological potential (Henry I was buried in the Abbey and his remains may still lie within the prison site), and the standing remains of the Abbey which lie adjacent are listed Grade I. The prison building itself was constructed in 1844; it is listed Grade II as an important example of the ‘separate’ system which was established at Pentonville just two years earlier. The gothic design, by Sir George Gilbert Scott and William Moffat, features an attractive central octagon and crenelated north front, and the prison has particular historic value for its association with erstwhile inmate Oscar Wilde. He served two years at the prison between 1895 and 1897, describing his grim experiences afterwards in his poem, ‘The Ballad of Reading Gaol’. The prison is a key part of the Abbey Quarter, a conservation and interpretation initiative focused on the Abbey remains and neighbouring Forbury Gardens (Grade II registered), and the Town Hall and Museum, which aim to deliver a clustered leisure, learning and visitor centre. This part of Reading is experiencing a tourist renaissance, following the reopening of the Abbey last month. The recent meanwhile use of the Prison for the Art Angel installation has been a big splash nationally and shows the site’s potential as a cultural destination. The prison is also a key regeneration opportunity at the heart of Reading. It is allocated within the 2009 Reading Central Area Action Plan as part of the East Side Major Opportunity Area which, amongst other objectives, seeks to provide ‘a more defined urban area than currently exists, of medium to high density’. Policy R3b envisages the site’s regeneration for residential, commercial officers or a hotel. The Council’s 2015 Outline Development Framework for the site, adopted in 2015 as a Supplementary Planning Document (SPD), expands on its heritage and archaeological opportunities and sensitivities, including recognising the scope to remove or replace the unsightly 20th century buildings which surround the listed cruciform building. Drawing on our experience in producing the Risky Business? report for Historic England, and in securing conversion and reuse of historic prisons at Gloucester and Portsmouth, we thought it would be interesting to consider how the site might come forward in accordance with the SPD, and to establish the type and broad scale of economic benefits that different masterplan scenarios could deliver. Whilst these scenarios have not yet been viability-tested or subject to a detailed consideration of archaeological and other constraints of the site, we established three options to test different intensities of development all three scenarios aimed at delivering the following objectives: A masterplan (massing and layout) which ensures that Scott’s prison remains the architectural centrepiece of the scheme Preservation of key views to the octagon and north front; building heights broadly following that established by the existing prison walls (approximately 3 storeys) Removal or redevelopment of unsightly C20th buildings which detract from the prison’s setting Improved permeability into the site, which is currently encircled by prison walls Activation along the River Kennet to the south and creation of new public space   Scenario 1. Mixed use This scheme seeks to optimise the mix of uses within the site, with the prison itself becoming a hotel (38 bedrooms based on the precedent established at Oxford, albeit this may be a conservative estimate as Reading is larger), and the surrounding blocks redeveloped for a total of 7100sqm commercial floorspace, 500sqm community space and 93 dwellings. The scheme envisages 2850sqm office space in two 3 storey blocks framing views into the north and east of the site, with taller blocks to the south (3-5 storeys) containing 6500sqm residential and 3367sqm commercial (restaurants and bars) opening out onto the banks of the river. We calculate that this option, on occupation, could generate £3.6m of resident expenditure per annum, 578 FTE jobs, and £45.7m direct GVA per annum. See larger version Scenario 1: masterplan layout and associated economic impact [N.B. all figures are indicative, based on an illustrative scheme mix]   Scenario 2. Scaled-back office/hotel This scheme proposes 4,800sqm of commercial floorspace alongside the 38 bedroom hotel, with development located in the eastern part of the site, allowing generous public space to be provided across the western part of the site where it engages with the abbey ruins. A three-storey northern block would comprise 2100sqm office space, with office and commercial uses accommodated at the south-eastern part of the site, supporting vibrancy along the river and events within the public space adjacent. Our economic analysis indicates that, on occupation, this could deliver 414 direct FTE jobs during operation, and £36.3m direct GVA per annum. See larger version Scenario 2: scaled back office space, hotel and more generous public space, together with economic impact [N.B. all figures are indicative, based on an illustrative scheme mix] Scenario 3. Arts/commercial The third scenario envisages the prison in use as a c1,800sqm gallery or arts venue, supported commercially by a 2,400sqm 50 bedroom hotel in the south-eastern corner of the site, with a ground floor bar/restaurant space. The northern part of the site would provide a large green space associated with the gallery. This scenario could generate 80 direct FTE jobs during operation and £2.8m direct GVA per annum. See larger version Scenario 3: Arts and commercial scheme, together with estimate economic impact [N.B. all figures are indicative, based on an illustrative scheme mix] These three options show how much the site has to offer – both as a potential cultural anchor to the Abbey Quarter, but also as a vibrant commercial and mixed use hub. The site and its heritage present a huge opportunity to create a unique destination in the heart of Reading, with new uses having the potential to provide a striking new life and setting for an iconic, if infamous Victorian prison. Get in touch with the authors Daniel Lampard, Senior Director and Head of Thames Valley office Ciaran Gunne-Jones, Senior Director and Head of Economics Nick Bishop, Senior Heritage Consultant Colin Pullan, Urban Design Director Layla Vidal-Martin, Planner  

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