Agenda item

[ Report of  the Interim Strategic Director for Planning, Regeneration and Development. To be introduced by the Cabinet Member for Housing, Planning and Regeneration.]Update on the infrastructure and placemaking programme in Tottenham Hale, including the allocation of Strategic Development Partnership receipts through a Funding Agreement to deliver key infrastructural works.

The Cabinet Member for Housing, Regeneration and Planning introduced the report, which sought approval for the Council to enter into a funding agreement for a key infrastructural project, realignment of the Bus Station at Tottenham Hale. This project would unlock key development sites to enable more affordable housing and enable the overall delivery of a new Tottenham Hale District Centre.

 

The report set out required changes to the location of the Bus Station and associated enabling, which would make the road less complex for better use by cyclists and pedestrians and allow for the development of the new District Centre in line with the Tottenham Area Action Plan. The report further explained how this will work, and the additional spend that would be required.

 

Cabinet noted that the increased scope of works, and hence costs would be met through pre funding of section 106 and anticipated land receipts, along with an increased grant allocation from the GLA’s Housing Zone programme.

 

In response to questions from Cllr McNamara, Brabazon and Carter, the following information was noted.

 

§  The Cabinet Member outlined that the cost of the scheme had increased largely due to the increase in the scope of works. The benefit of the works would reduce the footprint of the Bus Station, in turn freeing up more land for housing units. When considering plans for the Bus Station with TFL and Council transport engineers, amongst other required improvements, it was found there was a need to allow right-hand turns into the new north entrance to the Bus Station, include provision of new traffic signalling, complete significant upgrades to the junction of Watermead Way, provide new bus laybys relocated from within the bus station itself, along with the widening of Watermead Way itself. Therefore, re-alignment of the bus station had grown into a bigger scheme to accommodate the changes required. It should be noted that the changes to the Bus Station result in overall timesavings to busses using the Stations due to enhanced operational flexibility.

 

§  The Cabinet Member indicated that the capital allocation for this scheme was in the budget papers considered by the Overview and Scrutiny Committee.

 

§  In relation to due diligence undertaken on the scheme, Argent Related, the Council’s development partner , went out to the market with a scope of works required to realign the Bus Station and through this process were required to obtain best value. The most competitive value obtained was £7.165m for the scope of works for which funding will be granted. In relation to funding being sought from the Council, this was capped at the above figure and there was a transfer of risk from the Council to Argent Related as the development partner responsible for delivery of this scheme. Argent Related will ,therefore, be responsible for any cost overruns and can only draw down funding on evidence of spend being provided.

 

§  The Cabinet were advised that, as this was a funding agreement between the Council and a third party [Argent Related] to deliver open access infrastructure, this was exempt from state aid.

 

§  The Monitoring Officer advised that it was appropriate for Cabinet to give delegated authority to the Strategic Director of Regeneration, Planning and Development after consultation with the Cabinet Member for Housing, Regeneration and Planning, the Chief Financial Officer and the Assistant Director of Corporate Governance, to agree the final amount, the terms and conditions for providing the grant funding. This delegated decision would be within the parameters set by Cabinet.

 

§  With regards to the funding of the scheme, details were provided at paragraph 6.2 of the attached report. This outlined that, as an option, the Council could leave Argent Related to find the funding independently. However, the drawback would be the impact on viability. This would lead to a disjointed scheme, which was difficult to bring forward, affecting provision of retail and commercial space, and delivery of 950 homes and the Health Centre. The funding and investment partnership arrangements for the overall Tottenham Hale Strategic Development Partnership enabled the Council and Argent Related to move resources around to maximize provision of affordable housing, and community benefits/ facilities. Therefore, by investing in this particular infrastructure scheme meant the Council could secure larger amounts of benefits elsewhere in the district centre (e.g. on Ashley Road).

 

§  The Cabinet Member disputed that the Health Centre was singled out for risk of delivery, should the funding agreement for the station square not go ahead. The report made clear the range of community benefits/facilities potentially impacted by not taking forward this decision and scheme.

 

• It was clarified that Argent Related did not own Pocket Homes. Related has interests in both Argent Related and Pocket Homes.

 

• In relation to the question on the finance comments and reimbursement of Council capital expenditure, the report made clear that should the developer not be able to conclude the Bus Station works, the Council would have step in rights whereby it would be able to conclude the works thus protecting its investment and allowing for large elements of the District Centre to proceed with another developer.

 

 

• The Cabinet Member disputed the assertion, that there was a sudden extra cost with this scheme. The report clearly set out the narrative of events. The Council had known for some time that there had been issues with the Bus Station and the road works. TFL contractors, which the Council had no direct control over, had completed a lot of the previous work on the Bus Station and they had left issues, which needed resolution in placemaking terms. Since early 2017, the Regeneration team, along with Argent Related, had been working hard to resolve this. This had required a substantial amount of negotiations and joint working with Council engineers, and TFL engineers to establish the required re-alignment works. There had also been a need to consider the impact of the new Ada College. It was important to provide a safe route to the station for Ada’s many students and staff.Therefore, there had not been a sense of detailed costs until this detailed investigative work had been completed.

 

• In response a question regarding the risks of Argent Related failing for any reason, the funding agreement will allow for step in rights. The Council only pays in arrears and based on evidenced spend. If the developer were to fail after the delivery of the infrastructure, but before the Council had received its land receipts, the Council would then find itself in ownership of sites where all the enabling work had been done. The Council could then decide to dispose  of the sites if it wanted to secure the anticipated land receipts.

 

• It was important to note that this was one of the sites in Tottenham Hale being taken forward as part of the Council’s portfolio approach to sites. The portfolio approach recognises that each site has a job to do in terms of the provision of different uses and different types of housing. The Council has used the portfolio approach to target resources at those sites, which yield the maximum overall community benefits across Tottenham Hale, rather than looking at each site in isolation. 

 

• With regards to changing the emphasis to social homes, the portfolio approach to sites meant that the Council was able to extract significant resources from the Strategic Development Partnership with Argent Related and transfer them to affordable homes with registered provider partners. A housing scheme on Ashley Road was highlighted as an example.

 

• In relation to the timing of the realignment, the Cabinet Member reiterated that the Council’s policies set out a series of changes to Tottenham Hale that explicitly envisage the proposed improvements to the bus station and associated infrastructure.. The precise proposals involved substantial joint working with TFL.

 

§  The early work on the Bus Station was compiled following an initial assessment based on land required to realise the vision set out in the Tottenham Area Action Plan. At the time, basic changes to the Bus Station were identified. Then the Council with Argent Related engaged with TFL to undertake substantial additional design work which resulted in a substantially expanded scope of works. This included introduction of new signaling arrangements linked to the junction with Ashley road and a pedestrian crossing at ADA College, and an additional lane to facilitate buses leaving the station to get into the flow of traffic.

 

• In relation to cost overruns, the key point to keep in mind was that the Council will be providing a set amount of money to Argent Related to complete the works and they in turn will be taking a developer risk in relation to any cost overruns.

 

§  A key part of the work at Tottenham Hale was to create a better environment, for cyclists and pedestrians, and to enhance the quality of the local environment. It was important to recognise that there were two key traffic routes passing through Tottenham Hale. The Tottenham Area Action Plan stresses the importance of the proposed key north / south link, which is a continuation of Ashley Road as part of this approach to create a better environment, especially for pedestrians.

 

 

Further to considering exempt information at item 25,

 

 

RESOLVED

 

1. To increase the amount of grant to be given to TH Ferry Island Limited Partnership (Argent Related), its Strategic Development Partner, by a maximum sum of £7.165m (including £2.5m GLA Housing Zone funding), for the purpose of funding the realignment works to be carried out to the Bus Station in Tottenham Hale, subject to the Council’s budget setting meeting on the 26^th February 2018 and subject to the Council and TH Ferry Island Limited Partnership entering into a funding agreement in respect of the grant.

 

2. To give delegated authority to the Strategic Director of Regeneration, Planning and Development after consultation with the Cabinet Member for Housing, Regeneration and Planning, the Chief Financial Officer and the Assistant Director of Corporate Governance to agree the final amount, the terms and conditions for providing the grant funding.

 

 

 

 

 

Reasons for decision

 

Bus Station Cost Increases

 

The District Centre Framework and Streets and Spaces Strategy identified the need for substantial changes to the bus station in order to reshape the District Centre and to release developable land within the Station Square West AAP site allocation. These lands and the works associated with them are a key part of the Council’s Strategic Development Partnership with Argent Related. Appendix 1 shows, shaded in yellow and green, the initial proposed scope of works.

 

These initial works were limited to moving kerbs eastward in order to expand the site area of Station Square West, and opening up the north end of the bus station in order to facilitate entry and exit for buses at both ends, thus releasing land for a mixed-use development to the works.

 

Throughout 2017 the Council, Argent Related and Transport for London have worked together to refine the designs for a realigned bus station and to have them signed off by the relevant parts of Transport for London, notably London Buses, TfL Surface Transport, London Taxis and others. A further key component of the approvals process is the modelling of the changes on both the bus station and the surrounding road network.

 

The initial modelling of the 2015 design (with minor modifications) identified substantial challenges in capacity and functionality at the newly created northern exit to the bus station. As a result, mitigations were identified, which have substantially increased the scope of required works. The revised design has resulted in substantial benefits accruing to bus operations overall, which has been a critical component in the securing the support of key decision makers within TfL.

 

This enhanced scope of works is shown in the map attached as Appendix 2 and includes:

·         Widening of Watermead Way, west of Ashley Road to address congestion issues in the network and allow right-hand turns into the new north entrance to the bus station;

·         New traffic signaling;

·         Significant upgrades to the junction of Watermead Way, Ashley Road and Station Road in order to improve pedestrian and cycle safety, improve the public realm and address vehicle movements through the town Centre, accommodating future growth at all local development sites;

·         Widening further north on Watermead Way and on The Hale accommodating new bus laybys relocated from within the bus station itself;

·         The realignment of Station Road, opening this to traffic to allow servicing and enabling the creation of important new pedestrian and cycle links from the station, through the core of the district Centre and beyond to nearby sites.

 

TfL have now signed off on the design of the realigned bus station, on the condition that the wider scope of works are delivered in parallel.

 

Argent Related have undertaken substantial work looking at how such works would be delivered. This has also added to the costs, due to need to balance the delivery of highways works on The Hale and Watermead Way with the need to keep the road network and town centre (including the bus station) functioning throughout the works. This detailed delivery work has identified a need for substantial traffic management requirements, which has impacted on cost assumptions.

 

Housing Infrastructure Fund

 

To address Bus Station cost increases, the Council put forward an Expression of Interest for CLG’s Housing Infrastructure Fund (HIF). However, following discussions with the GLA this was wrapped into a larger, pan-Tottenham bid, which would nonetheless include a sum to support Tottenham Hale infrastructure. The outcome of this bid is currently awaited, but following advice from the GLA, it seems that a determination will not be made by CLG within the originally anticipated timeframe. This risks delaying the whole delivery of the Centre of Tottenham Hale, as the Station Square – Bus Station works are the first piece of enabling works required to unlock the whole central sites at Station Square West and Station Square North (ca. 800-1,000 housing units and associated retail, public realm etc.). These works are programmed to start on site in Spring 2018 and would take a little under a year to implement.

 

It is also far from certain that Haringey would be successful in securing this funding, as it been heavily oversubscribed and Tottenham Hale is already in receipt of significant GLA funding. Officers will continue working in order to attract as much external grant funding to Tottenham Hale as possible; however, to secure the delivery of the District Centre in, this paper assumes a scenario where HIF funding is not forthcoming.

 

Alternative Options considered

 

Some Highways works (as included in S106 ask) could be stripped out in order to value engineer Bus Station works and reduce the overall funding requirement. However, this would result in disjointed delivery of interventions on the same footprint, and would extend and increase the disruption experienced in Tottenham Hale as its development proceeds. It would also result in higher costs overall.

Funding could be withheld for the Bus Station project, with Argent Related left to find £4.665m independently. However, Argent Related have indicated to the Council that this additional cost would significantly threaten the viability of the SDP sites as a whole. There is a significant risk that the core of the District Centre would therefore not be delivered leaving a very disjointed heart to the District Centre for at least the next decade. This would result in significant retail and commercial space, and in the region of 950 homes not coming forward. The delivery of the Health Centre on the Melbourne Centre would also be put at significant risk, as it is unlikely the Council could identify a replacement developer in the timeframe available.

Argent Related could also be asked to proceed with the delivery of SDP sites without the realignment of the Bus Station. This would result in a substantial loss to the Council as significant receipts flow from the disposal of the bus stand lands thus enabling the delivery of affordable housing and the infrastructure required. The non-delivery of a realigned bus station would be contrary to the Council’s established policies in the form of the Tottenham Area Action Plan and the Tottenham Hale District Centre Framework. It would also cause a significant reduction in the number of new homes brought forward.

Benefits of the Proposed Approach

The additional scope has resulted in substantial increased costs; however, they also result in significant benefits for the wider town centre. In particular, the additional crossing at the junction of Station Road (as realigned) and Ashley Road provide a key north-south link from the core of the district centre to Down Lane Park and other adjacent sites, linking to a new east-west connection through the bus station to the Tottenham Hale tube and rail station. A further crossing on the desire line between the new Ada College and the new station will provide a safe route to the station for Ada’s many students and staff. The investment will include significant upgrades to road surfaces and pavements. Delivering these works in advance provides significant benefits to the Council’s placemaking ambitions for Tottenham Hale.

 

It has also been recognised that there are logistical benefits to delivering improvements to the Bus Station and its environs ahead of the comprehensive redevelopment of local sites, as this reduces the length of time for which Tottenham Hale will experience significant disruption to its highways and public spaces.

 

Key Risk – non delivery of SDP sites

 

It should be noted also that there are significant risks to funding the Station Square – Bus Station project upfront, as both proposed funding solutions (planning obligations and SDP land receipts) depend upon the delivery of SDP sites, which lies partly outside of the Council’s control. In the scenario that SDP sites do not proceed for whatever reason but Bus Station works are already carried out, the Council would not be able to recover increased project costs. However, it would be left in control of viable development sites, which it could seek to develop through alternative means in order to recoup all or part of these costs.