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Agenda Item No

 

The Vale of Glamorgan Council

Cabinet Meeting: 16 December, 2013

Report of the Cabinet Member for Regeneration, Innovation, Planning and Transportation

Barry Island Link Road

Purpose of the Report

1.         To provide Members with an update on progress to date and to seek delegated authority to enter into  loan agreements with the Welsh Government and the consortium of house builders at the Barry Waterfront development site to provide the Barry Island Link Road earlier in the construction programme than catered for under the terms of the extant planning permission for the development of the Waterfront

Recommendations

1.         That the progress made to date be noted.

2.         That Cabinet  give delegated authority for the Head of Legal Services, in consultation with the Director of Development Services, the Managing Director, the Leader of the Council and the Cabinet Member for Regeneration, Innovation, Planning and Transportation,  to agree the terms of and enter into an interest free loan agreement with the Welsh Government and  to enter into an interest free loan agreement with the consortium of house builders at the Barry Waterfront to provide the necessary funding for the construction of the Barry Island Link Road earlier in the Waterfront construction programme.

 

Reasons for the Recommendations

1.         To provide a full update on the proposal.

2.         To enable the appropriate legal documentation to be put in place and for the road to Barry Island to be delivered in advance of that currently planned.

 

Background

2.         Members will be aware that planning application 2009/00946/OUT sought consent to develop vacant land at Barry Waterfront for a mix of residential, retail, office and community development.  The proposal also included a direct road linking the Hood Road roundabout to Barry Island (the Barry Island link road).  The application was reported to Planning Committee on 7th July 2011 following a lengthy assessment of the merits of the scheme as well as the viability of the development.  Following completion of the Section 106 agreement, planning permission was granted in March 2012.

3.         Alongside the consideration of the outline proposals for the Waterfront, planning permission was granted in September 2011 for the regrading of the Waterfront site, ground remediation and the construction of a link road to Barry Island (reference 2010/00696/FUL refers).  The remediation work associated with this permission has commenced on site.

4.         The planning permission granted under 2009/00946/OUT was subject to a number of planning conditions, and one of these conditions required the submission of a phasing plan to ensure that the Barry Island link road be provided in its entirety, including the connections to Barry Island, prior to the beneficial occupation of any dwellings or buildings as part of the area phased as South Quay Parkside.  The wording of this condition and the agreement of this phasing was very much based on an assessment of the viability of the scheme and had regard to a range of other requirements such as affordable housing and the provision of a new school within the development.

5.         The phasing programme currently submitted indicates that the link road will be constructed in phases and would not be constructed in its entirety in one single operation.  As a result the proposed link would not connect to the Island until circa 2018 at current estimates.

6.         Members will be aware that it has been a desire of the current administration to complete the provision of the link road to the Island at the earliest possible opportunity as such a link would have significant benefits in terms of attracting further investment and visitors to the Island.  It would also link well with the regeneration investment currently targeted at the Eastern Promenade and the future uses of the Nell's Point site.

7.         However the current timescale in delivering the link has the potential to create uncertainty and as a result Members and officers have been in discussions with the housing consortium and the Welsh Government in order that options for bringing forward the delivery of the full road scheme might be considered. The view of the consortium is that it would not wish to fund the construction of the road scheme in advance of the programme as agreed under the planning consent and its current business case given their view on the current viability of the development itself.

8.         As a result of this position officers have been discussing loan options and the preference of the Welsh Government is to make a loan to the Council sufficient to cover road costs with the proviso that the Council enters into a similar loan arrangement with the Consortium on the basis that an earlier construction date is agreed and that the link road is delivered in one phase as opposed to several phases. Negotiations are now gathering pace and this report is presented in order to provide delegated authority to agree the terms and conditions of any loan agreements.

Relevant Issues and Options

9.         The parties and their legal advisors have now spent some months setting out the form of the agreements required to enable the loans to be made and to ensure that the agreements include sufficient provisions to ensure the construction of the road by an agreed date.

10.      The value of the loan will be determined through a process of seeking to negotiate road specification, bills of quantities and cost estimating and the intention is to use a staged payment process. There will be an agreement between the Welsh Government and the Council to borrow money and a separate loan agreement between the Council and the Consortium. These agreements will include clauses relating to repayment and default provisions.

11.      The current draft programme for the works would see the commencement of the construction works alongside the Asda supermarket development in March 2014 and the completion of the road scheme to Barry Island during 2015 ( provisional and needs confirmation via programme submission).

12.      Officers from Legal Services and the Project Management Unit have been appraising the developing form of both the Loan Agreement with the Welsh Government and the separate loan agreement with the Consortium of house builders. A consideration of risks, risk assessment and possible mitigation strategy is set out in the Part 2 report later on this meetings agenda.

Resource Implications (Financial and Employment and Climate Change, if appropriate)

13.      The funding for the scheme is being provided via a loan from the Welsh Government to the Council.

Sustainability and Climate Change Implications

14.      The Feasibility report produced in support of the planning application for the larger scheme also included an Environmental Study which considered baseline environmental conditions, a consideration of the development options and their potential effects and this work has been supplemented by the more recent surveys and reports.  The provision of a direct road link to the Island will link the new Waterfront development to the Island and will also facilitate walking and cycling.

Legal Implications (to Include Human Rights Implications)

15.      Because of the interest free nature of the loan agreement, it is considered that the proposed arrangement is within the definition of State Aid.  Accordingly, before the agreements are concluded a formal notification will be made to the Department of Business, Innovation and Skills State Aid Unit to ascertain whether a notification to the European Community will have to be made.

16.      In addition to the loan agreement with Welsh Government and the separate loan agreement with the consortium, it will be necessary to obtain and register at Companies House and the Land Registry or charges over land to secure the sums loaned to the Consortium.

Crime and Disorder Implications

17.      There are no crime and disorder implications.

Equal Opportunities Implications (to include Welsh Language issues)

18.      Equal opportunity issues have been considered in the design phase of the road scheme

Corporate/Service Objectives

19.      The proposal would support the Corporate Plan which seeks the construction of this road scheme.

Policy Framework and Budget

20.      This report is a matter for Executive decision.

Consultation (including Ward Member Consultation)

21.      Local Ward Members have been consulted.

Relevant Scrutiny Committee

22.      Economy and Environment.

Background Papers

 

 

Contact Officer

John Dent. Major Projects Manager - 01446 704617

 

Officers Consulted

Operational Manager Legal - Committee Reports

Senior Accountant

Operational Manager for Planning and Transportation

 

Responsible Officer:

Rob Thomas - Director of Development Services

 

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