Liverpool asked to waive cash payments for land
LIVERPOOL City Council is being asked to waive its right to cash payments for land used for redevelopment at the £100m Norris Green Village, the former Boot Estate.
Some 115 houses have already been constructed by Regeneration Liverpool, the council’s partnership with Sigma InPartnership and Countryside Properties.
The next phase, detailed in a report to the council’s cabinet, will deliver 63 houses – 20 for sale and 43 for social landlord Cobalt Housing.
But due to the tough property market the council is being asked to waive its right to 10% of the land’s residual value of £567,895 and instead take a 1% equity share in the houses.
The council has already had its return on the land downgraded. Last year it agreed to take 10% of the value, rather than a “payment based on a hypothetical value of £50,000 per acre” because of falling land values and reduced margins.
The report states: “Regeneration Liverpool has now advised that they are proposing that the 10% share will be in the form of an equity share in the houses to be sold and not cash.
“The partnership advise that because of the marginal viability of the scheme and the difficulty of raising development finance it is not possible for Countryside to offer a cash payment for the land and all of the residual value will be in form of a share in the 15% equity loan on the houses for sale.”
“Countryside themselves will be taking part of their developers profit in the form of a 4% share in this loan value with the partnership taking 10% plus Liverpool City Council the final 1%. The city council will be entitled to its share but only after the houses are sold on or after 10 years whichever is the earlier.
“The partnership has also requested that this approach be approved for use on future phases. The council must accept that there are significant risks in accepting this revision on this and future phases.”
It adds: “The share of this equity due to the partnership and the council will not be secured and therefore if Countryside were to get into difficulties there is a risk that the council would never receive anything for the land.”
The cabinet will consider the change at a meeting on November 30.
