English Cities Fund requests £5m viability payment

The joint venture between Muse Developments, Legal & General and Homes England have asked Salford City Council for money to support the 23-storey Stanley Street residential project ahead of a scheduled start on site in March.

Following a viability appraisal, English Cities Fund has submitted a Development Proposal Notice requesting a £4.7m subsidy from the council’s Development Trust Account, a fund which uses overage from more profitable developments to support less viable ones.

The council entered into an Overarching Development Agreement with the joint venture to deliver Salford Central, the area which includes New Bailey, which stated English Cities Fund is entitled to a 15% return on development costs for each phase of the masterplan.

If a project is deemed to be non-viable, a request for funding from the DTA can be made.

According to a report to Salford City Council’s cabinet, the commercial developments at New Bailey have contributed to the DTA, whereas the residential schemes have drawn from it.

The report also said: “English Cities Fund are aware of the burden being placed on the DTA and are reviewing the wider residential/commercial mix within the ODA area.”

The 211-apartment complex, which sits on a site bought from Granada, forms part of the New Bailey masterplan. The plot is close to the Ordsall Chord new rail bridge and will sit next to residential already completed as part of New Bailey and sold to Legal & General.

The latest development would be split across two phases and total 392 apartments of between one and three bedrooms.

Around £3.3m is being spent on public realm improvements around Stanley Street, which adds to the need to draw from the DTA.

The request has been recommended for approval by officers ahead of the cabinet meeting.

The project team on Stanley Street includes HawkinsBrown, Buro Four, WSP, Hannan and Arup.

The agents are JLL and Cushman & Wakefield.