Trafford and Bruntwood flirt with ditching third-party resi developers
Taking matters into their own hands, the local authority and developer are looking to create a new joint venture that would spearhead the delivery of homes at Stretford Mall, Stamford Quarter, and Lumina Village.
These would be projects that are deemed “fundamental to the transformation of these sites,” according to a report to Trafford Council’s executive committee, which meets on Monday. The executive is being asked to approve the creation of the joint venture, which would focus on six residential phases in particular: three at Stretford Mall, two at Lumina Village, and one at Stamford Quarter.
Trafford Council and Bruntwood already have a JV, however, its focus has been on creating masterplans and leading on commercial elements of regeneration projects at Altrincham’s Stamford Quarter, the former Kellogg’s headquarters site Lumina Village, and Stretford Mall.
Residential delivery has been the domain of third-party developers chosen by the JV. While noting that Glenbrook’s appointment at the 693-home Lumina Village has been an example of the success of working with a third-party developer, the report notes that not all has been well.
Having to work with developers has led to a lag in residential delivery on these regeneration projects, with 900 homes having outline planning consent or being part of a developing masterplan that has yet to move forward. The JV, as it stands, is not able to push these sites to be delivered, having no control over the timing or amount of land receipts and homes built.
A residential-focussed JV, however, would enable more control over when these schemes are delivered as well as the amount of affordable and low-carbon housing provided.
The new joint venture, if it is created, would be a 50/50 agreement. Each of the residential schemes would be a separate business entity.
It also would not be the default option for delivery on residential projects. However, it would be a viable choice for Trafford Council and Bruntwood should they not find a third-party developer whose vision aligns with their own.
Projects brought forward by this joint venture would follow the forward funding model, with a registered provider, pension fund, or other investor locked in during the design stage to bankroll the scheme.
According to the rough structure published in the council report, the JV would fund the design and professional fees required to get planning permission for a project, later being reimbursed for these when planning permission is secured and a fixed-price build contract is signed.
There is some risk to the joint venture, the council report noted. Should the project never receive planning, the JV would be exposed to a cost risk of up to £5.5m. Another risk would be during the construction phase – if costs rise or a contractor goes insolvent, the JV would need to make up that money somehow.
You can read more about the possible joint venture in the council report.
Both Trafford Council and Bruntwood were contacted for comment.
Oh no, this has disaster written all over it! Bruntwood has zero residential experience and the JV hasn’t exactly been a resounding success to date!
By No Problem
Damning comments. Fundamentals being too many apartments and not enough family homes.
By Three
Trafford should stick to its core responsibilities and whilst regeneration is a civic responsibility , undertaking direct development, cost risk and putting in additional overhead to manage this shouldn’t be one of them at this time.
By I Ratepayer
We will all follow these proposals with great interest to see if they can accelerate development and minimise risk exposure.
By Anonymous
The devil will be in the detail here, and the main winners will be the agents advising and then helping administer the jv… The difficulty will come when they disagree over affordable /net zero commitments…
By Cheggers
Why appoint an office landlord/ developer to deliver a mixed use regeneration scheme? Surely Glenbrook should have been selected for that role in the first place? Muddled thinking by Trafford.
By CEO
It seems Bruntwood are the unecessary “middle man” here. They are not resi developers. Its nuanced and not as straightforward as office development.
By Sensible
Too many foreign investors are relied upon to fund building projects with the intention of rents that do not benefit the local communities as the money goes abroad! Councils should demand that at least a percentage benefits the community or better still give building projects to local builders with the same proviso. At least ultimately such monies would remain in this country and benefit this country
By Rebecca Robinson
Trafford Council should remember the monstrosities of the Hulme and Ardwick flats that were ultimately blown to ground as residents wanted houses ad they got them!
By Rebecca Robinson
Developers will only develop when they have investment and there is a market – regardless of being 1st 2nd or 3rd party developers – but it is a good idea for Trafford to maintain control albeit gifting some control to a 2nd party Master Developer.
If this proposal is to miss out the middle man i would suggest Trafford should consider a direct relationship with a self funding Contractor.
Risk of obtaining Planning Permission is minimal it’s a gift for the Master Developer
By Mike Riding
Rebecca, the goal here isn’t to provide people with a high standard of living, it’s to get as many people as possible onto a tiny bit of land
By Anonymous