Seaton: EDDC votes to share the profits with Tesco but no affordable housing on the site

21 Aug

The following comes by email from Sandra Semple, who was at yesterday’s Development Management Committee meeting for the item on Seaton, where Tesco has petitioned for the removal of all the affordable housing on its site to make it more saleable, as it has many problems associated with the infilling of the site which mean that only certain types of houses can be built and fewer of them.

“What I say below is a personal opinion only and reflects my layperson understanding of the debate.

The DMC heard from myself and Paul Arnott:  there were no representatives of the town council in attendance.  District Councillor Peter Burrows was in attendance earlier in the day as a member of the DMC but left before this item.  District Councillor Steph Jones appeared in her capacity as Deputy Portfolio Holder for Housing.

Members of the committee appeared strongly of the view that Tesco was going a step too far.  They particularly disliked the comment from the company’s agent that if EDDC did not agree to what they wanted, they would appeal.  Some thought this was unacceptable pressure.  One member of the committee noted that no affordable housing has been built in Seaton for many, many years and if this reduction was allowed other developers in the town would think they should have the same treatment.

Mr Freeman (I forget what title he has these days) pointed out that there was a mistake in calculations in the documentation (not sure whose fault) and that whereas it had been stated that the company might sustain a loss of over £2 million if affordable housing were included, the real amount on the figures provided was more like £750,000. 

It was suggested that this application was a good candidate for EDDC’s new policy of “overage” and here I get a little fuzzy about what they mean – and to be fair so did some of the members of the committee.  However, what it appears (to me) to be is that yes, Tesco will be allowed to take out the affordable housing BUT EDDC will put in place an overage clause which says that when the potential loss has been recovered (i.e. after the £750,000 loss has been taken into account – or whatever the correct figure is) then EDDC will take a percentage of the profit thereafter.  This means, as I understand it, that, say, Tesco sells the site for £5 million, then they ignore the first £750,000 and the remaining profit is then split between EDDC and Tesco.  The EDDC lawyer in attendance could not remember what the percentages agreed were but I have looked it up and the default allowed in the new policy is 50% each but EDDC has the option to increase this percentage if it sees paperwork which shows that the profit could be extremely high. 

This only applies to the current planning application.  If the site is still vacant when the current planning application runs out then everything has to be renegotiated including the S106 agreements and percentage of affordable housing.

Throughout the afternoon several members of the committee (perhaps with an eye to the next election) said that the economic climate was improving and that this meant that Tesco has less to worry about.

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One Response to “Seaton: EDDC votes to share the profits with Tesco but no affordable housing on the site”

  1. Paul Arnott August 21, 2013 at 5:04 pm #

    Paul Arnott here, mentioned in Sandra’s despatch above, which I endorse. Please may I offer a further, rather lengthy comment of my own?:

    Aneurin Bevan famously wished not “to be sent naked into the conference chamber”. I have often wondered if I would ever see such a spectacle in my own lifetime, and at East Devon District Council’s Planning meeting yesterday I finally did (not literally, thankfully).

    I witnessed two rows of district councillors trying to find a face-saver as Tesco’s property division told them outright they would not after all be sticking to their contract with EDDC to ensure 25% of any development on the vast area next to the Seaton store would be Affordable.

    In fact, they were going to build precisely 0%. Nul points. (The going rate at the time was 40%, so they were already onto a winner.)

    Tesco’s tale was one of woe. How it had cost them so much to raise the land next to the store – and then realised you couldn’t build houses on sand. How much it would cost to change those sandy foundations to build any houses at all. The collapsing economy. (Property prices, mortgage approvals, and building company profits like Bovis are all now soaring.)

    Fortunately, their woe could be relieved by jumping through a recent government loophole allowing developers to renege on Section 106 agreements – like the one that was to give Seaton its Affordable homes. All it needed was the rubber stamp from our local Planning Committee and with one leap they’d be free.

    And so the rubber stamp was duly wielded by many of the same councillors who’d denounced those telling them a few years ago – in writing, with technical detail – that the land raising plan was a fiasco. The planning committee’s instinct now was not to fight Tesco, as they could, but to locate that vital face-saving device (after making suitable mournful noises).

    ‘Overage’, it’s called. In other words, if Tesco did miraculously go on to make a mint from the development of the land, a big slice of the profits would flow back to East Devon (though not specifically Seaton, according to the resolution).

    Overage? All I have to say, EDDC Councillors and Officers, is if you think the company who have stolen your clothes on the Affordable pledge (NIL%!!) won’t outsmart you with some Hollywood accounting when it comes to the audit on their profits, you will have learned nothing from their first raid on Seaton’s nest.

    Local people need to see two faces of Tesco. There’s the retail, where many members of our local community work and shop. Good luck to them. I am one such happy shopper.

    But the Tesco Property Empire, when it loomed over the horizon a few year’s ago was already world famous for its rapaciousness, its land banking, its aggressive tactics.

    The people of Seaton marched and warned and did everything in their might to stop EDDC allowing a company, which would always going to conduct itself precisely as it now has, to be favoured. Sandra Semple was prominent among them.

    But they were ignored. Even condemned. ‘Regeneration’, EDDC councillors said. Regeneration? Have they seen the place, minus swimming pool, gym, pre-school, holiday site?

    A lot of really good people are putting their shoulders behind the wheel to get Seaton going. Their district council has, not for the first time, sold them up the river Axe.

    The only way this third-rate shower will ever be changed is if more Independent councillors stand for district elections in 2015. Come on, East Devon, there must be some of you out there.

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