Council rejects proposal to transform offices to residential a second time
Liverpool City Council planning committee has once again refused planning permission for a scheme to convert a former city centre office block into residential space, opening up the possibility of legal action by the developer, CERT Property.
The Manchester-based developer wants to convert the former Barclays Bank office building in Moorfields, opposite the Merseyrail station, into 45 apartments, including single-level and duplex apartments, known as Centric House.
A visualisation of Centric House
Its proposal was first heard by Liverpool City Council Planning Committee on June 4, but was refused, against council officers’ recommendations, by a vote of 5-4, with councillors citing S106 matters and affordable housing issues.
It was heard again at this morning’s Planning Committee (June 25), but, once again, refused, on a 5-3 vote split, on the same grounds, despite officers recommending approval.
It opens the door now for CERT to appeal the decision to the Planning Inspectorate.
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.
Notes to the committee revealed the proposed 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.
A CGI of a bedroom in Centric House
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 have been 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.
CERT Property said it has no comment at this stage.
