Huge decision looms as developer bids to go ahead with Rugby town centre plan that won't fund all the required service improvements

But though the original vision of seven-storey blocks has been scaled back slightly, the developer wants to go ahead, even though their own viability assessments – supported by independent research carried out by Rugby Borough Council – show the scheme is not viable.

It sounds a remarkable strategy and eyebrows, at least, will be raised that in doing so it is looking to cut the affordable housing commitments and developer contributions it could reasonably be expected to make on a project of this size – such as payments in respect of extra pressure on school places and health services, etc.

The scaling back of the design is only to the extent that it will be six storeys high facing North Street and then step up further back seven stories – still allowing for 11 businesses to be based at ground level and 200 flats above.

That sounds like a lot of money to be made but with the current cost of materials, evidence provided on behalf of applicant Karenor Partners says it will lose money.

So whereas the likes of the county council as education authority and the relevant NHS bodies have set out what they will need to fund improvements for the increase in population they believe the flats will attract, councillors at the borough council planning committee meeting next Wednesday, March 15, will be advised to approve the scheme on the basis of a bit of jam today and more jam if things improve at some unknown point in the future.

The analysis in the papers for that meeting provide a stark assessment of how the developers are looking for approval for a scheme they say they will lose money on.

The report outlines the situation thus: “The applicant has submitted a financial viability assessment for this planning application.

“It contends that the build costs of constructing the proposed development would be greater than the expected value of sales.

“The scheme would therefore result in a deficit even if no affordable housing and planning obligations are required.

“However, unlike most sites, the applicant in this instance is both the landowner and developer and therefore has a unique set of decision-making criteria.

“The applicant intends to deliver the proposed development as part of its asset management strategy, in the anticipation of market conditions improving through the life of the planning permission and build process, and to assist in creating wider benefits for Rugby town centre through the regeneration process.”

From this reality check, the report goes on to outline the findings of an independent expert it commissioned to study the case and their report backed the position of the applicant: “The independent viability consultant then undertook a sensitivity analysis looking at the various impacts of providing all or some of the affordable housing and requested planning obligations.

‘The inclusion of these significantly increased the deficit and made the proposed development even more unviable. The consultant advised that in light of this the scheme cannot support any affordable housing and planning obligations.”

Design changes were also considered but they didn’t change that judgement so councillors will be asked to consider a recommendation for approval that includes what is termed a viability review mechanism that sets timescales for the work to take place and for changes in costs and revenues to be checked.

The level of financial contributions could be increased if things improve – but not cut if things worsen.

There would also be monitoring of the affordable housing situation.

Whereas the latter element goes to Wednesday’s meeting set at zero, on the basis of it not being viable to provide any, the developer has recognised there would be an impact on services and has agreed to make a payment despite the financial prospect.

This offers some relief but not everything that was suggested.

It would meet what the county wants for secondary education and all the requests relevant to health.

But as the report notes: “Notwithstanding this, the proposed development would still cause significant and detrimental impacts on the non-secondary stages of education provision, play and open space, libraries, road safety funding and the WCC monitoring and administration funding.

“This harm would need to be weighed up against the benefits in the planning balance.”

In terms of actual figures the county council would get £368,655 towards secondary education but wanted £961,407 to address the impact on all stages of education – meaning the developer is making an offer almost £600k short of the desired amount.

So that’s why next Wednesday, councillors will need to use their judgement to decide if refreshing the part of Rugby Central that fronts North Street – with modern buildings and an open walkway between them – is the right move, when some might say it is impossible to judge if construction costs will ever fall sufficiently to make the scheme viable.

And all this takes place without even mention of the fact that those same councillors will be asked to believe that 200 apartments – 121 with one bedroom and 79 with two – should go ahead on the basis of being car free, the developer offering the current fashion for plentiful cycle racks plus the prospect of a car club nearby offering shared use of vehicles.

It sounds great for the environment – but we look to councillors on the planning committee to decide if it’s realistic.