Office conversion to residential use back before city council planning committee
Liverpool City Council planning committee will once again hear an application to convert a city centre office block into residential space after it rejected the bid earlier this month, despite planning officers recommending it for approval.
CERT Property sought to convert the site of a former Barclays Bank office building in Moorfields, opposite the Merseryail station into 45 apartments, including single-level and duplex apartments.
Manchester-based CERT Property acquired the 27,238 sq ft office building, Centric House, for an undisclosed sum, in 2018 with plans to refurbish the site to provide high quality office accommodation with suites available from 86 sq ft to more than 11,000 sq ft.
As part of the latest proposals for residential use, the building’s existing basement car park would accommodate 11 parking spaces including an accessible bay – 49 bicycle storage spaces and waste storage are also proposed at basement level.
But the application was refused by councillors in the June 4 vote in a 5-4 split.
Debate centred around S106 matters and affordable housing issues.
The application will be considered, once more, at the June 25 planning committee, with planning officers recommending approval.
However, the notes to the committee reveal that the issue remains the same, in that the scheme is unable to provide for affordable housing or any financial contribution because it is not ‘viable’ even before the affordable housing units and S106 contributions are factored in.
This viability is based on an anticipated developer profit of 13% when construction costs are adjusted down by five per cent and sales values are adjusted up by five per cent – the best-case scenario for profit – which is lower than the nationally accepted minimum target of 15% – the lowest figure allowed in the viability guidance when piecemeal disposals are being considered, as is the case here.
The financial appraisal has been independently assessed by the council’s qualified independent viability consultant. This has confirmed that, given the benchmark land values, build costs and reduced profit margins in the context of the Liverpool economy, the development would be unable to generate surplus returns to meet the costs of planning policies.
Any approval would be subject to a S106 legal agreement which would include a ‘clawback’ clause. This would provide that on completion of the scheme, the viability of the development be tested again by the council’s assessor, at the cost of the applicant.
If there have been changes in the market in relation to costs or anticipated yields, the required contributions, whether full or part, would then be payable to the council at that point.
The notes to councillors conclude that, to give the scheme the best chance of being delivered, the lack of affordable housing, trees and open space provision is justified on viability grounds and accepted on the planning balance.
