The former Peugeot site on Bexhill Road, where HBC plans to build a supermarket and lease it to Aldi.
HBC’s Bexhill Road development moves forward
Hastings Borough Council has taken a further step in its plans to build a supermarket on the former Peugeot site in Bexhill Road, which it has now purchased. However, questions have been asked about the scheme, which already has planning permission. Nick Terdre reports.
The plan for the former Peugeot site is for the council to build a supermarket to be leased to Aldi, plus a Gregg’s shop and a coffee shop, which has yet to be let. The scheme forms part of HBC’s strategy of building a portfolio of commercial properties as it seeks income-generating activities to compensate for ever-dwindling central government funding.
One of the main questions concerns the price paid by HBC for the site. This was purchased only in June by Tarncourt Ambit, the council’s developer partner in the project, for £2.01 million, then sold on to HBC in September for £2.9 million, a 44% mark-up.
Council leader Peter Chowney told HOT he could not comment on the price paid, but he expected the previous owner would want a return for putting the deal together, assembling the land, getting Aldi and Greggs involved, drawing up all the plans and getting them approved.
Later he told HOT: “The amount originally paid back in July would have been for a vacant development site presumably. We were paying for a fully developed site with tenants – so you’d expect that to be significantly more expensive.”
Cllr Rob Lee, leader of the Conservative group, called the deal “staggering and hard to comprehend…”. He seems to have got his figures wrong, however, claiming that HBC paid £3.5 million for the site. The extra £600,000 presumably refers to the price paid by the council for the adjacent land at 311 Bexhill Road, now the location of St Mary’s Food Market, and previously the site of the Bulverhythe pub and hotel. This was a separate transaction with Tarncourt, which acquired the site in July for an unknown price.
Lee criticises loan strategy
Lee also criticised the council’s strategy of financing its acquisition of commercial properties through loans from the Public Works Loan Board (PWLB). “The finance for the purchasing of the land and the construction is all borrowed money taken out on a 50-year term, meaning that it will be our grandchildren that will be paying back through their taxes this costly error of the council,” he said.
In an interview with Hastings in Focus, Lee questioned the wisdom of the council’s strategy, claiming that annual interest payments on its borrowings amount to £750,000. If the retailer decided to take advantage of any break clause in its lease and pull out, the council would be left with a hard-to-fill empty property while still having to service its loan, he said.
Chowney defended the policy, claiming that the acquisition programme had brought the council annual profit of £1 million. The return on investment from its other commercial properties was between 5 and 6%, while around 4.5% was expected from the Bexhill Road development, he said. Taking interest payments into account, the net yield was just under 1%, but with annual rent reviews that would increase.
Planning permission in the bag
Planning permission for the demolition of the existing buildings on the two sites and construction of the supermarket and two additional units was granted in June by the planning department working under delegated authority – in other words, the application (HS/FA/17/00941) was not scrutinised by the elected representatives of the planning committee.
Rother District Council objected strongly to the proposal – the only one of the statutory consultees to do so – stating that there was no need for additional convenience retail floorspace identified in the Hastings Planning Strategy, that the application failed to follow guidance in the National Planning Policy Framework on determining sites in relation to the town centre, and that contrary to the conclusions reached by the applicants, there were likely to be detrimental impacts on existing retail operations within the Bexhill area.
The officer’s report which formed the basis for approval of the application lists briefly RDC’s objections without discussing them, and while it transcribes some relevant paragraphs from the NPPF, makes no attempt to show how, or whether, the application is in conformity with them.
This article was amended by Nick Terdre on 6 November 2018.
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11 Comments
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Noting what you say Mrs Doubtfire concerning what Cllr Chowney claims that the price paid includes the development of the site, sounds very strange when you look at what Tarncourt paid for the site and take into account money spent over two years on the requirements to get it planning permission. It really does not “add up” financially wise for this property developer. Once again another “opaque” issue with HBC rather like the actual purchase of this site. Rather like the timeline from the point of planning permission granted to HBC buying it – all to close for comfort?
Good observation there David Stevenson on Peter Chowney and particularly with roads and property. Don’t forget his long time involvement with Sea Change and Sea Space
Comment by Bolshie — Tuesday, Nov 20, 2018 @ 08:04
Of course the earlier post should read £600.000 for the smaller of the two sites. Apologies.
Comment by Ms.Doubtfire — Saturday, Nov 17, 2018 @ 14:51
Land Registry records confirm that Hastings Borough Council paid the following amounts for this site:
For 311 Bexhill Road, the food shop/old coaching inn they paid £600.00
For the main site at 323 Bexhill Road they paid £2,900,000 Ex VAT.
There is no mention of any VAT liability on the smaller site, and it is not clear if the council is liable for VAT on the main site.
But it does vindicate Councillor Rob Lee with his ESTIMATE of £3.5m being paid for the entire site.
Nobody seems certain if this figure includes the development costs although Cllr. Chowney says ‘presumably’ it does. ‘Presumably’ is not good enough and most people think it could not include the development costs. It has to be assumed that the money paid was paid to the OWNERS of the site for the site…all in all a big mess to say the least and much more detail is needed here.
Comment by Ms.Doubtfire — Saturday, Nov 17, 2018 @ 14:50
The council ought to be investing in improved public transport to support existing retailers in the town centres rather than on another car-dependent supermarket out in the sticks. Simples.
Comment by dingbat — Monday, Nov 12, 2018 @ 11:34
Here we go again. If you ever see the words “Hastings Borough Council” and “Peter Chowney” in the same report, you know there’s going to be so many unanswered questions, creating suspicions of “dodgy dealings”. I agree with much of the earlier comments but want to follow on from Bolshie’s mention of traffic. The Conservative County Council sponsored the Bexhill – Hastings Link Road, claiming it would take traffic off the A259 through St. Leonards and Hastings. Now the Labour Borough Council want to increase the traffic on the same road. Doesn’t this strike you as ridiculous?
Comment by David Stevenson — Thursday, Nov 8, 2018 @ 19:21
Ref DAR: The proposed (and in principle very welcome) new GP surgery for 20,000 patients at the corner of Bexhill and Filsham Roads (HBC reference HS/FA/18/00848) and the proposed County Council Highways Depot at Crowhurst Road on a greenfield site are currently both Delegated to officers to decide. The County will of course will end up as judge and jury in its own case! The problem is threefold: national regulations allow – though don’t require – extensive delegation; Council’s have to meet very demanding nationally set time targets for dealing with applications; Counties and Districts are able to decide on their own development proposals. Local Councillors and local residents can force applications to get on to meeting Agendas but the rules for doing so are fairly tight – and you have to know how to go about it!
Comment by Chris Lewcock — Thursday, Nov 8, 2018 @ 17:05
We are told councils investing in property on borrowed money is likely to be the one of the next big financial disasters. We watch with apprehension.
Comment by Percy Keele — Wednesday, Nov 7, 2018 @ 23:27
It strikes me that if a site is commercially viable, companies will invest for themselves.
With a big Tesco just up the road at Ravenside and a very nice Lidl at the top of Church Road in St Leonards (very near to the Asda superstore) , I can’t see the attraction of this site for another supermarket.
I dont think a bank would lend money to a property speculator who wanted to build a store in this area and expected to recoup their investment through rental income.
If it doesn’t make commercial sense, how can HBC justify using tax payers money in this way? Adding in buying through an agent who has made a big mark up for “putting the deal together”…. Lunacy?
Comment by Eye on the ball — Wednesday, Nov 7, 2018 @ 23:07
Yes HBC according to Land Registry title have paid £600,000 for the pub site. But to date (06/11) the main site 323 old car dealer site, L.R. records still show Tarncourt Ambit as the legal owner where they did pay £2,010,000 dated 5th July 2018.
What remains most importantly and so many people are asking is who put this deal together and how was it done. Who approached who in purchasing this site. How was this decision made in HBC-who-how did it all happen. That of course pertains to the other two large purchases the TK Maxx and old Focus retail units at over £16m.
With this Bexhill Road site another striking coincidence with it are the timelines with the planning applications. There is a plethora of them the first being in 2016 but HS/FA/17/00941 application was passed on 7th June 2018. This was a delegated decision that did not even get to the planning committee. How a major development slipped through like this must surely remain a mystery. And all so convenient. Then some three months after Tarncourt acquire it – HBC steps in and buys it. What a curious timeline of events. Is this same developer going to build it for HBC.
On reading the decision notice has some alarming statements and conclusions. How this development blends with the existing area and architecture – not too sure about that. Then how the Highways people have assessed there will be roughly 500 vehicle movements a day on this site but that will not have any effect to the Bexhill Road.
Yes so many questions, so many enigmas behind it all that I doubt we will ever find out the facts
Comment by Bolshie — Tuesday, Nov 6, 2018 @ 10:58
So many questions and so few coherent answers to this one. Surely multi million pound Aldi has sufficient funds to build their own supermarket?
This council appears to be on a roll with their borrowing spree and they have handed over a nice little profit to Tarncourt Ambit.
HBC showed an interest in this site long before Tarncourt purchased it – why didn’t HBC purchase the site thus saving us a whole heap of money. And it has not gone unnoticed that an offshoot of Tarncourt is contracted to build this development. Whoa! what goes on here?
The major failings in this issue is the fact that this application was decided via the delegated route in June this year.
This is a major development and should have been decided via the planning committee route despite the shortage of public comments/objections, due in the main to the lack of sufficient information/notification now given to residents on new developments. As things stand this application was decided by a few paid officers.
Another case of the Mad Hatters Tea Party allowing this to slip under the radar.
Comment by Ms.Doubtfire — Tuesday, Nov 6, 2018 @ 08:43
“Delegated authority” (the first time I’ve heard of this wheeze) where a planning application of this size and import “…was not scrutinised by the elected representatives of the planning committee”: another example which illustrates that there is “something rotten in the state” of HBC – and the planning department in particular.
Comment by DAR — Monday, Nov 5, 2018 @ 15:20