Danegate Statement to the District Auditor Contents Page


Submitted by Cllr Brendan Murphy - 7.9.01

  1. In 1997, the Council approved a Local Plan which included provision for the development of land in South Macclesfield for housing, retail, recreation and employment. This land was called the South Macclesfield Development Area (SMDA).
  2. The site was bounded on the west by Congleton Road (a principal road leading to the town centre) and on the east by a railway line.
  3. On the other side of the railway, the eastern side, is a retail and office development known as Lyme Green. This site lays between the railway line and London Road another principal road leading to the town centre)
  4. The permission for the development of Lyme Green was conditional on a 106 Agreement whereby the developer, Orbit, would contribute to the cost of bridging the railway line and would grant the Council an easement across its land to enable the Council to connect the SMDA site to London Road.
  5. The agreement was time-limited.
  6. The Council allowed the 106 agreement to lapse with the result that The council would to have to pay to bridge over the rail line and Orbit would have a ransom strip blocking South Macclesfield Development Area from access to London Road on the east.
  7. In 1998/99, the Council published, consulted and then approved a planning brief for the South Macclesfield Development Area. The brief was quite specific as to the types of development - including social housing, retail, employment; it specified as a pre-requisite for development the creation of a link to London Road and the re-location of playing fields from SMDA to new off-site location.
  8. The Council is the biggest single landowner in the SMDA.
  9. Early in 2000, it advertised for a 'lead or preferred developer', interviewed six and selected Shepherds who was invited to submit a proposal within six months. There was considerable discussion about and emphasis on the provision of recreational facilities within the scheme, including the provision of new playing fields and pavilions.
  10. In October, Shepherds submitted to the council a scheme which largely matched the SMDA development brief apart from the re-alignment of the road line for sound technical reasons; it specifically included provision for the relocation of the playing fields, a sports centre, a B&Q Warehouse, a hotel and a day nursery.
  11. It was made clear at the meeting with Shepherds that the Council did not want to share any liabilities for the development. Specific reference was made to the eventuality of planning permission being refused by the planning committee or as a result of a call-in by the Secretary of State
  12. losses arising from unsatisfactory results from CPOs or private treaties
  13. the market failing to deliver tenants
  14. unexpected costs arising from environmental or engineering factors.

Shepherds agreed it would bear all the above risks.

  • The Shepherds proposal included the following timetable:-
  • an Agreement would be drawn by December 2000,
  • a planning application made by February 2001,
  • a start made on construction by June 2001,
  • the first units becoming operational by April 2002 and
  • new playing fields ready for use September 2002.

The Council would transfer its land to Shepherds and, in return, Shepherds would fund the whole of the project, (including the provision of new playing fields and highways, the cost of other land acquisition and infrastructure etc), bear all liabilities and losses and pay the Council an undetermined share of future income and profit.

13 As at 1.9.01:-

No Agreement has yet been presented to members of the council. The Chief Executive and the Leader of the Council have given repeated and unequivocal assurances that there has been no exchange of letters or any other documentation that would give rise to any contractual obligation on the council.

There is serious concern that Shepherds would have done so much work without any contractual commitment from the Council

No planning application has been submitted to the planning committee.

Clearly, no start can be made on the construction and the much needed new playing fields cannot be ready for September 2002.

14. In the meantime, significant changes have been made to the original scheme, so far without the approval of the appropriate committee, the most significant being to replace of the retail element with offices and the indefinite postponement of the replacement of playing fields - which for some councillors was the "planning gain" -

15 Nothing at all has been reported to the council since October 2000.

16 The Leader of the Council said in effect that the issue of playing fields and leisure facilities was now only "tangential", interpreted by some councillors to mean that these were no longer core elements

17 In June 2001, the Leader of the Council was asked for a meeting to discuss the situation; he declined.. A meeting was then requested with the Chief Executive to obtain clarification of the situation. That meeting was delayed until 13th July. The meeting was attended by the Chief Executive, Chief Planning Officer, Chief Technical Officer and 5 councillors.

The Officers confirmed there were problems in justifying the retail element of the development and without that there would be difficulties in funding the development. In particular, they confirmed that the Council's own retail consultants had advised there was no proven need for out-of-town retail. In those circumstances, it was inevitable that the development would be subject to a call-in by the Secretary of State.

The Chief Technical Officer indicated that there may have been a very serious under-estimate of the cost of Highways and drainage elements in the project.

Councillors have not been shown the Retail Consultants report nor have they yet seen a Traffic Impact Assessment.

18 A request was then made in accordance with Standing Orders, for the matter to be placed on the agenda of the Council's Coordinating and Resources Committee July meeting. Discussion was blocked by the Leader of the Council.

19 In August, arising from a report on the Council's leisure centres which identified, inter alia, a looming financial and business crisis and a need for up to 10 million capital investment, the Chairman of Amenities and Recreation produced draft proposals - now referred to as LeisureGate - an alternative approach that could access up to 30 million capital to finance a state-of-the-art campus for leisure, sports, playing fields, athletics, youth facilities, cinema, swimming, hotel, health care and educational facilities.

Other bodies have expressed interest in participating in such a project.

20 This would replace the original proposals for Phase 1 (ie the proposals for retail development which were now said to be unobtainable). The remainder of the scheme could stay in tact and Shepherds could continue as preferred developer.

21 This alternative proposal has been blocked from consideration by members of the council on the grounds that should they be considered, Shepherds would be able to sue the Council for compensation even though the Council, as the land owner, ought to have every right to determine what happens on the land it owns.

22 The position now is....

By blocking consideration of alternatives for Phase 1 of the project, the council is being prevented from considering a 'better value' proposal even though it has yet to reach any Agreement with Shepherds.

The outline scheme which the Council has approved has been changed significantly without reference back to the council

If the Council is now exposed to liabilities if it were to consider alternatives other than Shepherds modifications, then it has been inveigled into a position that does not give priority to securing the public interest in the disposal of public assets.

If the Council pays for a public highway over private land in order to facilitate a private development then it has reversed the 'planning gain' concept, viz. Instead of the developer paying planning gain for access to publicly-owned land as is normal practice, the council is paying it!

By allowing the Orbit agreement to lapse, the Council has failed to protect a valuable public asset and now faces the prospect of not only using public assets to finance the bridge but also of now paying for access over land owned by Orbit.

Some of the 30 millions that could be available to the Council is time limited and delay could lose the opportunity.

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