Project Analysis St. Mary Shopping Centre Thornbury - Assignment Example

Project Analysis - St. Mary Shopping Centre Thornbury Table of Contents Table of Contents Executive Summary 2 Thornbury Library St. Mary Street - a Background 3 Compulsory Purchase of Land 3 Purpose of Acquisitions 4 Powers of Local Authorities to Make Compulsory Purchases 5 Process of Making Compulsory Purchases 5 Local Planning System 7 Planning Policy Statement 8 Objectives of Planning Policy Statement 9 Application of the Planning Policy Statement 10 Local Planning Authorities 10 Role and Functions of Local Planning Authorities 11 Section 106 Planning Agreements 12 Alternative Proposal for Thornbury Library St. Mary Street 13 Features of the Proposed Shopping Centre 13 Advantages 13 Disadvantages 14 Strategies to Improve the Functioning of the Centre 15 Investment Strategy 16 References 17 Project Analysis - St. Mary Shopping Centre Thornbury Executive Summary The government of UK has given wide powers to City Councils and other local authorities to compulsorily acquire any piece of land or other property if the local authority is of the opinion that such land or property can be used for economic regeneration of the local community of for redevelopment of any already existing public facilities to make them available to more number of members of the community as also to those who have been excluded from the affluent groups of the local community. In this connection a proposal was made to demolish the existing Thornbury library building at St. Mary Street, Thornbury BRISTOL South Gloucestershire, to facilitate the erection of a three storey building to form a new library. The new library was also proposed to provide retail space, office space, and associated car parking in the form of a town centre. The proposal was considered by the Development Control (West) Committee. After due consideration of the opinions and views of all interested parties and after a full deliberation the Committee refused the proposal of the development planning. This paper examines the circumstances under which compulsory purchase of land can be ordered by the city council or other local authorities and also the policies of the government with respect to local planning and development. The paper also presents an alternative development plan for the land under question. Thornbury Library St. Mary Street - a Background The proposed site is located in St. Mary Street, Thornbury Town in South Gloucestershire County and the proposal was to make the shopping centre with the name and style of St. Mary /shopping Centre. The town is situated about 14.5 miles north of Bristol city centre. The site is in the ownership of South Gloucestershire Council and can be leased on a long term basis. The Town centre in Thornbury is dominated by the High Street. St. Mary Street where the site is located is full of remnants of old and historic Thornbury building blocks. Since the proposal for redevelopment of the site is not accepted by the Thornbury Town Council, it is proposed to demolish the building and construct a shopping centre in the place for renting out office space. The details of the project are listed elsewhere in this paper. However, before examining the commercial viability of the proposed shopping complex it would be of interest to study the details of the provisions relating to the compulsory acquisition of land and also about the local planning policies of the government. Compulsory Purchase of Land Compulsory acquisition is the process by which local and national governments obtain land and premises for development purposes which they consider is to be done in the best interests of the community. The law relating to compulsory purchase is far too complex in that it includes a provision to allow an owner of an interest in land to make a request to the local authority concerned to take possession of the land if that land is affected by a planning decision of the local authority. The basic principle behind the law is that the land suitable for development which will benefit the community may be compulsorily purchased by the Secretary of State or other local authority. Similarly any land where historic buildings are in a bad shape needing repairs may also be compulsorily purchased by the government (Compulsory Purchase Forum). Purpose of Acquisitions The city council or other local authority generally acquires land and property with a view to facilitate the implementation of schemes like the removal of old and dilapidated buildings which are unfit for dwelling, sites found suitable for redevelopment and economic regeneration which involve schemes which benefit the community as a whole, construction of new highways or improvements to existing highways. The land may be compulsorily purchased by the government for any other purpose which it may deem fit and proper for the development of the community or for the economic development of the region and the country as a whole (Salford City Council). In all the cases the city council or the local authority concerned will try to purchase the land by mutual negotiation and agreement with the owner of the land. In cases where it is not possible so to reach an agreement compulsory purchase orders will be issued to ensure that the social scheme planned is progressing as scheduled. Making a compulsory purchase order is the legislative procedure that gives the local authority the power to compulsorily purchase the land and property necessary for a scheme. The power to compulsorily purchase the land can be used only with the express approval of the Department for Communities and Local Government after due consideration of any objections received from the public (Salford City Council). Powers of Local Authorities to Make Compulsory Purchases All the local authorities including the different city councils have a wide range of powers to compulsorily acquire any property within its jurisdiction for any specific purposes. From the planning pint of view there are enormous powers vested with the city councils to enable them to select the land to be developed, redeveloped, or improved from the scratch. According to the government the powers to compulsorily purchase the land are important means of gathering the land required to help the process of regeneration. The compulsory purchases orders are required to be authorized by the city council concerned (Birmingham.gov.uk). Process of Making Compulsory Purchases The compulsory purchase involves a legal process which has the following basic steps. The fist step is that the authorization from the city council for the passing of the compulsory purchase order. This step is necessary to facilitate the implementation of approved development scheme in accordance with the planning policy. The next step is to make the compulsory purchase order and submit it to the appropriate Secretary of State. In the case of planning orders this is the Deputy Prime Minister and First Secretary of the State to whom the purchase orders is to be sent for approval. It is mandatory to send a notification of the order to everyone having an interest in the land proposed to be compulsorily purchased. It is not just those who have interest in the land only can raise objection but any one of the general public is allowed to raise any objection to the order If after a certain period or after having negotiations with those who raised the objection, the objections are not withdrawn, a Public Local Enquiry is to be held. Such a public enquiry will be overseen by an Inspector from the Government. This enquiry is open to the public and everybody is allowed to express their opinion in the enquiry, and if it is in the opinion of the inspector it is necessary it may even be possible that any person can be heard despite the fact that such person does not have an interest in the Order. On the completion of the enquiry the Inspector will prepare a report and recommendation to the Secretary of State who will then make his decision and pass an appropriate communication. The communication may take the form of either his assent to the compulsory purchase order, or he can confirm the purchase with modifications or he may totally disagree with the proposal and deny the order. If the order is confirmed by the Secretary of the State the City Council will proceed to take possession of the property proposed to be acquired. In case there are no objections to the purchase from any one the Secretary of the State would still have to make his decision and communicate it to the concerned local authority. The most important part of the purchase is that the all those having an interest in the land will be compensated for transferring their interests in the property. Even though the rules of compensating the parties concerned is complex the general principle that guides the compulsory purchase is that no owner should be deprived of the compensation as a result of the compulsory purchase, which is fairly due to him/her. For instance the city council or other local authority is empowered to provide one an alternative house to live in case the property the government proposes to purchase is the house in which that person is living. Otherwise it is mandatory for the local authority to provide sufficient compensation to set up a new home for living. More specific efforts will be taken to reestablish the businesses that might get affected due to the compulsory purchase proposals (Birmingham.gov.uk). Although compulsory purchase is a whole legal process to acquire the land compulsorily it is usually undertaken as part of a broader initiative in the form of a regeneration scheme or City Centre redevelopment scheme. These initiatives are expected to be attempted through extensive processes of consultations with the local communities by the respective city councils. Thus this process will be providing ample opportunities to make the views of the general public representing those who are affected by the proposal as well as those who are not affected (Birmingham.gov.uk). Local Planning System It may be noted that the decision to acquire any land compulsorily is taken by the government acting through the local authorities after undertaking a local planning of any prospective regeneration or redevelopment scheme in the best interests of the local communities. Thus local planning system is the prelude to the compulsory planning system. Initially the decision to undertake any regeneration or redevelopment scheme for the immediate benefits of the local communities is arrived at and any suitable land for that particular scheme is acquired compulsorily by following the procedure outlined above for the compulsory purchase. Once the land is purchased the local authority proceeds to implement the redevelopment projects as planned earlier. Town and country planning is the land use planning system which the government uses to maintain a balance between economic development and the environmental requirements. Planning is intended to shape the place where the people live and work so that the country gets better shaped. Town planning is the key factor in aiding the wider social, environmental, and economic objectives of the government so that the communities become sustainable by ensuring an environmental friendly living. The government issues Planning Policy Statements which set the overreaching planning policies of the government on the delivery of sustainable development through the planning system (Planning Consultation). Planning Policy Statement The Planning Policy Statements are the key documents setting out the government's national policies and principles on different aspects of planning. The policies in this statement have a jurisdiction of the entire country of England. The policies focus on a number of issues relating to the planning of the town centres, the future of such centres and the use of the town centres to the community. It may be noted that these policies issued in respect of the town centres are exclusive and do not override any other national policies. It is also important that these policies are read in conjunction with the other national planning policy statements issued by the government. The regional planning bodies and local planning authorities are expected to take into account these policies in the preparation of revisions to Regional Spatial Strategies and also on deciding the individual planning applications (Planning Policy Statement 6). Objectives of Planning Policy Statement The main objective of the government in formulating the planning policies for the town centres is to promote the vitality and viability of the town centres. The government proposed to achieve this end by: making plans for the growth, development, and maintenance of the existing centres and promoting and enhancing the utility of the existing centres - this is to be achieved by focusing on the developments in such centres and making them to provide a wide range of services in a good environment accessible to the general public(Planning Policy Statement 6). The following are the other objectives which are in addition to and are to be considered in the context of the main objective as outlined above. by promoting a range of shopping, leisure, and local services which would be able to provide a range of genuine choices to the consumers. It is also expected to meet the needs of the community especially those groups of people who are excluded socially by improving productivity through the support rendered to an efficient and innovative retail, leisure, tourism, and other sectors which also enhances the competitiveness in the respective fields by making the existing or new development easily accessible and well served by a wide choice of available means of transport (Planning Policy Statement 6). Application of the Planning Policy Statement The following are the main uses for which the policy statement would apply: Retail (including warehouse clubs and factory outlet centres); Leisure, entertainment facilities, and the more intensive sport and recreation uses (including cinemas, restaurants, drive-through restaurants, bars and pubs, night-clubs, casinos, health and fitness centres, indoor bowling centres, and bingo halls); Offices, both commercial and those of public bodies; and Arts, culture, and tourism (theatres, museums, galleries and concert halls, hotels, and conference facilities) In addition to the above the housing in the form of mixed use, multi-storey developments might be considered as an important purpose for which planning may be undertaken. Local Planning Authorities Having set the broad guidelines and policies for the development of town centres, the government has entrusted the responsibility of achieving the objectives of the planning policies to the local planning authorities who perform in a regional planning context. The local planning authorities are expected to make active planning for the growth and managing the changes in the town centres over the development plan period. They will accomplish this by making a selection of appropriate existing centres. These centres which need improvement will be identified by them for effectively using the existing land and buildings and also redevelopment of the property wherever it is possible to do so. They will also extend the town centre where it is necessary to do so manage the contribution by the exiting centres to the best utility of the community by promoting and developing specialised role and function of the centre and also making the centres to provide specific types of uses to the community plan for new centres of an appropriate size in places where they are expected to grow at a rapid pace or in locations where there are no existing centres to serve the community effectively (Planning Policy Statement 6). Role and Functions of Local Planning Authorities The local planning authorities would work on the development of regional spatial strategies with a vision and strategy for the growth of the region. The strategy should cover the higher level centres in the region and the promotion of their role to contribute to the retail, leisure, office and other main town centre developmental needs of the community. The planning at the regional level should consider the regional economic strategy and should ensure that the local community is involved. The local planning authorities in preparing their regional spatial strategy should consider the development of a strategic framework for forming a network of town centres in their region or in any sub-regions as it may be considered necessary in such a way that there is no over-crowding of centres in any location embark upon a strategic choice of those centres in a regional or sub-regional setting of appropriate significance Apart from the above strategic functions the local planning authorities should: 1. adopt a positive and proactive approach to planning for the centres within there area taking into account the future needs of the region 2. work in close coordination with all the connected stakeholders and the community 3. plan a high quality design and should also make an efficient use of land 4. make a proper site selection and land assembly to purposefully house the centres 5. make a careful assessment of the needs of the community 6. make an assessment of the impact of the proposed development of the town centre 7. ensure that the town centres are located in sites which are easily accessible to the people 8. consider the local issue involved in the development of the centre by a consultative process (Planning Policy Statement 6) Section 106 Planning Agreements Once the redevelopment scheme is approved and the proposed land is acquired compulsorily the next action in the process is to enter into an agreement with the developer under Section 106 of the Town and Country Planning Act 1990. Section 106 agreements are the kind of "legal agreements between a planning authority and a developer to ensure that certain works related to a development are undertaken" (South Gloucestershire Council) For example the agreements may to provide a community meeting space, open spacers, or play grounds and equipments. The developers should estimate the requirements for open space and the provision or contribution to community facilities such as library services, dog bins, litter bins, sewer baiting, and waste management and community buildings. However they need not take into account other services such as education, transport social services etc. Alternative Proposal for Thornbury Library St. Mary Street Having considered the various provisions relating to the compulsory purchase of lands by the city councils and also the process of local redevelopment planning and also in view of the fact that the land did not qualify for compulsory purchase by the Thornbury Town Council, it is proposed to develop a shopping centre at the location where the library is currently located. The landed property at this place gives the following distinct advantages when a shopping centre is planed and built in the area. Features of the Proposed Shopping Centre The proposed shopping centre would consist of Thirty three retail units, five office units, one restaurant, and six flats which all will be sold on a long lease. The floor area of the retail and office accommodation would be totaling 86,812 square feet of lettable space. The centre would be completed in two phases. The tenure of the Centre would be held on a long term lease from the South Gloucestershire District Council for the period up to the year 2031. Advantages The location of the site represents the focal point of the Thornbury shopping district and this gives additional value to the shopping centre in terms of lease rent that can be received per square foot area The site is a high quality catchment area which is a definite advantage from the point of view of availability of good and sufficient water There is a continuous and rapid development of residential blocks in the locality and this increases the population density of the place. This is good news for the business houses to explore the possibilities of expanding in to this new found shopping domain The place is regarded for its village outlook and is also considered to be safe with less number of crimes Due to abundance of space there will be no problem for parking more number of cars - the major requirement of present day office space is the provision of adequate parking place along with the office space. In this respect this site absolutely qualifies itself for the development of a shopping centre Because of the availability of huge space the renting of the office space at comparatively lower rental rates can be considered which will make the shopping centre have a competitive edge against the local competition. Despite the advantages there are certain drawbacks associated with the site which should also be considered before taking any decision to go ahead with the proposal of the construction of the shopping centre. Disadvantages The proposed shopping centre may suffer from the following disadvantages: The proposed shopping center may suffer from heavy competition, as there is the retail store from TESCO is already functioning in the locality which may affect the retail market environment of the proposed shopping complex. The other units present in the St. Mary street are not comparatively bigger and this may affect the class of the people visiting the shopping centre As may be seen from the site map, the car parking facility is not available as a full lot but is split by Rock Street. This would again affect the retail environment as the car parking for the retail outlets may be found away from the stores locations and the businesses being housed in the shopping centre The Public House is in the middle of the Center which may hit the arrangement of other office spaces and shops in the centre Because of the connectivity of Soapers Lane to the St. Mary street there will be disturbance in the pedestrian flow which will make the it diverse and in the process some of the pedestrian traffic may go away from the shopping centre which is a potential disadvantage for renting the centre The other super stores like Safeway, Morrisons, Sommerfild and Aldi are expected to open their retail outlets shortly in the Thornbury town which will have a negative impact on the retail business and the shopping centre may not have a full demand as anticipated due to the competition becoming stiff in the retail area. Strategies to Improve the Functioning of the Centre With a view to mitigate the above issues underlined it is advisable to take the following strategic moves so that the shopping centre becomes more marketable and would provide more returns for the proposed investments to be made in the shopping centre. The first strategic step would be to redirect the redirect the entry into the Rock Street so that the car parking can be brought adjacent to the shopping centre. The next move would be to create the space for the second anchor which involves the redevelopment of the library. The other strategic move is to acquire the public house so that there would be an equi-distribution of the retail space which would enhance the utility of the shopping centre. It is also strategically beneficial to make a canopy over St. Mary Street so that the diners in the restaurants can be attracted more in numbers. By adopting the above strategic measures the utility and value of the site can be improved to a great extent. This would also make the presentation of the shopping centre to the prospective buyers and lessees attractive. The other measures that can be adopted are to advertise the availability of the shopping space along with the merits of the town as well as the location of the proposed shopping centre. This would create additional demand for the space. The investment strategies with the valuation of the site and the possibility of making a redevelopment plan with the local authorities are discussed in the following section. Investment Strategy The valuation of the property as of July 2006 is presented below: Particulars Amount Total Value of Retail Space 13,406,879 Value of Flats 5,301 Value of Offices 1,084,328 Value of Vacant Land 615,966 Total Value 15,112,474 Less: Buyers' Costs Stamp Duty @ 4.00% 571,630 Legal Fees @ 0.75% 107,181 Agents Fees @ 1.00% 142,908 Total Costs 821,718 Net Value 14,290,756 Rounded Off 14,290,000 The above valuation is based on the expected rental income from the different segments of the shopping centre. The valuation has been done by independent valuer based on the prevailing rental rates per square feet currently being charged by other property owners in Thornbury town. This would ensure a True Equivalent yield of 7.320 % and 4.00% and a Nominal Equivalent yield of 7.005% and 4.00% as per the valuation report. Considering the option of making a proposal for compulsory acquisition of the land by the local authorities the development of a shopping centre would yield more returns. Moreover as seen in the paper the process of planning for a town centre with the participation from the local authority is a complex and time consuming process. References Birmingham.gov.uk 'Planning Policies and Development - Compulsory Purchase' Compulsory Purchase Forum Planning Consultation 'Planning Policy Statement: Planning and Climate Change - Supplement to Planning Policy Statement' Planning Policy Statement 6 'Planning for Town Centres' Salford City Council 'Acquisitions and Compulsory Purchase Orders (Land and Property)' South Gloucestershire Council 'Section 106 Planning Agreements' Read More