The demolition of part of the North Street site in Lewes town, which is set to disrupt the lives of neighbours for the next few months, is being hailed as the start of a new development in Lewes.
It is not that.
It is a tactic to maintain the status quo. The planning permission, which was granted nearly 3 years ago, contained a number of conditions that had to be fulfilled if the permission was not to lapse in May 2019. One of these was the demolition of existing buildings on part of the site.
So the demolition simply stops everything from going back to go. If it had not taken place it would have been necessary to go through the whole planning process again.
UP FOR SALE
Readers of past articles about this site will know that the bulk of the site is owned by a company called MAS real estate investments, via two offshore holding companies in the British Virgin Islands and the Isle of Man. The remainder is owned by Lewes District Council. With the collapse of the proposed sale of 49 other sites some years ago, it is probably the Council’s biggest site where action is proposed.
MAS wanted to use their in house development company, Artisan, to develop the site but it was decided not to use them. The official line is that Artisan became too busy, but it may well be that Lewes Council were not too happy about Artisan following concerns raised by the Phoenix Rising group. They may have felt that it was more transparent to have a wider tender.
So the Council and MAS will put the site up for sale.
A DEVELOPER IS NOT A CONTRACTOR
Some of the confusion over the site results from the difference between a contractor and a developer.
If you want some work done that you cannot do yourself then you ask a contractor to come and give you a price for the work. If you are using public funds you may be required to invite a number of quotes. If you agree a price the contractor does the work. You pay them and then they go away. The principle is the same whether the job is installing a sink or constructing an estate.
But a developer is responsible for taking the risk involved in developing the site, selling the completed buildings and taking any profit or loss. They will appoint the contractors, set the timescale for work (within any constraints set by planning permission) and negotiate with others involved (in this case the provider of “affordable” housing).
This means that they need to own the site the two current owners need to sell it to them
WILL THE SITE SELL?
The Eye understands that the site will be put on the market in early summer and that preparations for this are now underway.
The potential sale will raise a number of issues:
- Lewes Council, at least, will want to retain some control over the development, so may not want to finally release the freehold until the site is finished, although it is not yet clear whether or not this is possible.
- The market is currently depressed, although the Brexit uncertainty may be resolved by summer. A crash out Brexit, followed by a falling pound, could make the site more attractive to foreign companies, although it could further depress the housing market..
- It will not be an easy development and developers may prefer to put their money into easier alternatives. On the other hand it could be argued that development in Lewes will always be an attractive proposition.
- The flood defences will be very expensive and there is very little profit in the first phase of the development. This means that, although it is possible to split the site up when selling, it will probably go to one big developer with deep pockets and an appetite for risk. If the economic environment is poor such a developer may not exist.
- It would be possible for Lewes District Council to buy the part of the site owned by MAS and develop the site itself, but whether they have the money or expertise to do this is not clear. The Council might want to buy or retain some of the site (for example the site of the health hub) whilst releasing the rest.
- It is also possible that a housing association could buy the whole site. Developers do not like providing rented housing because it ties up capital and needs ongoing management, so normally sell or lease the properties to be rented to an association. But associations are getting bigger and more like private companies, developing property for commercial sale, so it is not impossible that one might buy the site. This course would be unlikely to increase the amount of rented or “affordable” housing on the site.
- While a developer is unlikely to want to try to change the overall scheme, since this would require going back and applying for planning permission again, but some detailed changes are possible.
AFTER THE ATTEMPTED SALE
If the site sells the new developer could start work, or delay (subject to the limits set by the planning permission) or try to sell the site on at a profit.
If it does not sell then the Council and MAS will have to think again.
The Eye will endeavour to keep you up to date with developments (or lack of them).