Agenda item

Report of the Director of Placemaking and Housing. To be introduced by the Cabinet Member for Council Housebuilding, Placemaking, and Local Economy.

This report sets out a delivery approach for the Gourley Triangle site in Seven Sisters and seeks approval to acquire a number of third party land interests within the site.

The Cabinet Member for Council House building, Placemaking, and Local Economy introduced the report which sought approval for the acquisition of a property located at 10 Gourley Street, N15 5NG (“the Property”) and was shown edged red on the Site Plan attached at Appendix 1.

The Cabinet Member outlined that the acquisition pertained to one property within the Gourley Triangle area, which was part of a larger land assembly strategy for future development. This aligned with a longer-term investment strategy for the site, with hopes of eventually bringing forward a viable whole scheme and development across the area. Due to construction costs and a focus on council-rented and affordable housing, development would be paused for 2-3 years. Despite the delay, acquisitions must continue for future masterplan implementation. The Council had invested over ten years in acquiring the site, now owning approximately 80% of the freehold interests. Funding from the Future High Street Fund would cover land assembly costs. Rental income from the building will cover holding costs until redevelopment resumes.

Councillor Emery inquired about the feasibility of the project proceeding after the initial three-year pause. The Cabinet Member stated that all schemes were constantly reassessed due to challenging economic conditions, including interest rate hikes and increased material costs. The Council remained open to acquisitions to avoid complications with private ownership during future development. The Cabinet Member also stated that the acquisition of property provided an income stream for the Council while safeguarding development opportunities for the future.

Councillor Emery inquired about the amount of the Council's own funds spent on acquisitions for the Gourley Triangle site to date. It was noted that this was the second acquisition as part of the Gourley Triangle. The first acquisition was 3 to 40 Ford Street, acquired in 2022, with details available in the Cabinet Minutes. The Council already held a significant existing holding in the area, making this the second acquisition.

Further to considering exempt recommendations and exemption information at item 31,

RESOLVED

1. That Cabinet agree to the acquisition for planning purposes of the freehold interest in the property known as 10 Gourley Street, N15 5NG for the price and based on the Heads of Terms detailed in the exempt part of this report;

2. To grant a lease back of 10 Gourley Street on completion of the acquisition to the seller for a term of six months;

3. To delegate authority to the Director of Placemaking and Housing, in consultation with the Director of Finance and the Cabinet Member for Council House Building, Placemaking and Local Economy, to agree the final contract terms for the acquisition of the Property on the basis noted in Recommendations 3.1(a) and (c) in the exempt part of this report.

Reasons for decision

The Property sits within the Gourley Triangle site. The Gourley Triangle site is a key redevelopment site close to Seven Sisters underground and overground stations. It is promoted through the Tottenham Area Action Plan (TAAP) as a site with the potential to deliver high quality employment space and residential, including Council rented homes. The site also forms part of the Tottenham Creative Enterprise Zone.

The delivery of a comprehensive redevelopment scheme at Gourley Triangle is challenging owing to the variety of ownerships of properties within it. The Council has spent more than ten years engaging with third party owners in an attempt to bring forward a viable whole site scheme.

The Council has developed a masterplan for the site but given significant recent increases in construction costs, cost of site assembly in relation to the masterplan proposals and quantum of affordable housing requirement it is currently unviable. Reflecting the current economic situation, it is unlikely that development of the Gourley Triangle will commence within the next two to three years. However, that does not mean that the land assembly exercise must be halted.

As it stands however, the Council is in receipt of Future High Streets Fund (FHSF) (via DLUHC) monies that can be applied to the acquisition of properties within the Gourley Triangle site area for land assembly purposes. The FHSF monies can be applied to properties that sit within a defined area that not only includes high street facing properties but also those within its immediate hinterland. A plan showing the area boundaries to which this funding may be applied is attached as Appendix 3.

Council officers contacted third party owners to discuss their appetite to sell at this time. Heads of terms have been agreed in respect of this Property only (other owners were either unwilling to contemplate a disposal or terms could not be agreed). These heads of terms are attached as Appendix 2 (Exempt). 10 Gourley Street represents an important acquisition in terms of site assembly for the future redevelopment of the whole site in due course.

Given that this larger ambition is currently on hold, it is however imperative that the purchase is also able to justify itself as a viable acquisition in its own right and that the price paid represents value for money. An RICS Red Book valuation has been commissioned and the acquisition is conditional upon this valuation supporting the purchase price.

Council officers consider, having taken third party commercial property advice and subject to satisfactory results from the due diligence to be/being undertaken (surveys, title etc), that the acquisition of this Property at the price agreed and utilising FHSF monies represents value for money. The Council is still committed to the long-term regeneration of the area, for which it has been land assembling. Until current economic conditions change to allow the Council to proceed with the long-term master plan for the site, this acquisition represents a sound investment for the Council as rental income will cover holding costs. This is supported by the fact that this is an industrial property of a size and inner London location of which there is limited supply and strong occupier demand.

Information is contained in the exempt report.

Alternative options considered

To not proceed with this acquisition 5.1 The Council could choose to not proceed with this proposed purchase. In this event, the Council may face the prospect of having to repay the FHSF monies already paid to it. In addition, it would forego the opportunity to secure a property for future regeneration purposes.