Developers unable to pay infrastructure costs at two major Melton housing schemes

Worthearly is proposing to build 298 new homes on the former Jeld-Wen factory site on Snow Hill.

And GS Property Holdings propose 70 properties in the second phase of the ongoing Lake Terrace development.

Both developments will be considered by Melton Borough Council’s planning committee on Thursday evening.

Planning officials say there are mitigating factors for each applicant not to pay the full infrastructure payments requested and they are recommending the council permits both schemes.

A report to go before Thursday’s meeting states that GS Property Holdings has spent more than £2M in ‘abnormal costs’ on developing the Lake Terrace site.

It says this makes the development unviable if it also has to pay infrastructure costs, which would include £844k towards the Melton Mowbray Distributor Road (MMDR) and about £900k to local education.

The Leicester, Leicestershire and Rutland Integrated Care Board also request £48k to treat around 175 new patients but this can also not be paid.

The report says that an independent land assessor has backed the developer’s unviability claims.

It says discussions have taken place with the government and that payments towards the infrastructure could be secured through two of their funding bodies for new housing.

The first phase of development at Lake Terrace - which was all affordable properties - resulted in £800k in infrastructure payments (also known as Section 106 agreements) after government funding was secured.

The report to committee states that: “It is clearly regrettable that the scheme is unable to provide any of the requested contributions being sought by the NHS and Leicestershire County Council.

“However, the allowances made in the Applicant’s viability appraisal for the abnormal costs identified have been scrutinised and challenged extensively by both the Case Officer and specialist consultants Cushman and Wakefield on behalf of the Council with the conclusions drawn being that the information and evidence presented in the Applicant’s viability appraisal is robust and, if anything, downplays the cost of the potential site abnormalities.”

It is a similar situation with the Jeld-Wen scheme, where Worthearly say they’ve encountered a significant cost removing contamination on the former industrial site.

A report to Thursday’s planning meeting says that the developer is not in a position to pay all of the infrastructure payments.

It is offering to pay £4M towards local schools to help support the extra students who would live in the 298-home estate.

But Section 106 payments to support health, waste and transport services, plus the nearly £3M requested to help fund the MMDR, cannot be met.

The report states that the properties - including 91 one and two-bed homes plus 207 bigger houses - would be an important contribution to the town’s housing needs.

The scheme has prompted 34 objections on issues such as lack of local school places, traffic congestion and house sizes being too small.

In both the Lake Terrace and Jeld-Wen applications, council planning officers recommend that a review mechanism should be built in to any approval of the schemes to check if infrastructure funding can be secured if the build costs are lower than expected or if government funding is available.