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Meeting documents

Cabinet
Wednesday 13 December 2006

New Retail Quarter - Compulsory Purchase Order

EXECUTIVE DIRECTOR
DEVELOPMENT ENVIRONMENT AND LEISURE
REPORT TO CABINET
13 DECEMBER 2006
PROPOSED SHEFFIELD CITY COUNCIL (PINSTONE STREET AND TRAFALGAR STREET) (NEW RETAIL QUARTER) COMPULSORY PURCHASE ORDER 2006
1. PURPOSE
1.1 To seek authority to make a Compulsory Purchase Order (CPO) to acquire the interests and new rights in the land in Sheffield City Centre bounded by Pinstone Street, Moor Head, Charter Square, Charter Row, Wellington Street, Trafalgar Street, Devonshire Lane, Rockingham Street, Division Lane, 28-36 Carver Street, 45 Carver Street, 12 Cambridge Street and Barker's Pool, to enable the comprehensive redevelopment of the site in accordance with a redevelopment scheme known as the New Retail Quarter (the 'NRQ') scheme.
1.2 To seek authority to use powers contained in section 237 of the Town & Country Planning Act 1990 in order to ensure that the NRQ scheme is not prevented by claims of interference with rights of light and other rights, easements and covenants.
2. Background
2.1 The Council's development partner for the NRQ scheme is Hammerson plc acting through its subsidiary, Hammerson UK Properties plc (“Hammerson”), English Partnerships and Sheffield 1 (the City's urban regeneration company) are providing support for the scheme.
2.2 The purpose of the NRQ scheme is to assist in securing the regeneration of Sheffield City Centre. The NRQ will:
· provide up to 98,500 square metres of new or improved retail floorspace, including a flagship department store, ancillary mixed uses, high quality car parking and a new transport interchange;
· provide a wide range of other uses carefully integrated into the development including residential apartments, cafes, bars, restaurants, a nightclub and a health club;
· be arranged around a series of open streets and covered square in a manner respecting the City's urban grain.
2.3 The NRQ is just one City Centre scheme to be pursued as a result of extensive research into the City Centre stretching back to the late 1980's.
2.4 The investigations into the rapid decline in the fortunes of the City Centre from the mid-1980's led to the Sheffield Development Corporation and City Council jointly commissioning Hillier Parker and the Oxford Institute of Retail Management to undertake a study of the region in 1994, and to recommend a strategy for the promotion and regeneration of the City Centre. The study noted the decline in status of the City Centre and recommended, amongst other approaches that have also been actioned, a long-term strategy for the unification of The Moor and Fargate through major retail development.
2.5 This concept was developed and the NRQ site specifically identified in the Koetter Kim Associates City Centre Masterplan (2000), which was commissioned by Sheffield 1, the City's urban regeneration company. This Masterplan identified 7 key transformational projects for the City Centre designed to provide a substantial improvement in the economic performance of the City. This Cabinet previously agreed the Masterplan and the 7 key projects on 18 December 2000.
2.6 In order to secure delivery of the NRQ, Hammerson was selected in 2001 as preferred developer through an OJEU process conducted jointly by Sheffield 1 and the Council. Cabinet approval of this selection was given on 10 September 2001.
2.7 Hammerson submitted an Outline Planning Application (number 05/03933/OUT) on 17 October 2005, seeking permission for a mixed use development comprising of refurbishment/change of use of existing buildings and erection of buildings for retail (use classes A1, A2, A3, A4 and A5), housing (use class C3), a night club, a health and fitness club, multi-storey car parking and ancillary uses including the closure and alterations of public highways, vehicular access, servicing facilities, formation of open space and associated landscaping. Amended planning applications were submitted on 31 May and 16 July 2006.
2.8 The Outline Planning Application (number 05/03933/OUT), together with a full planning application for the refurbishment of Leah's Yard, a Conservation Area application to demolish buildings within a conservation area, and Listed Building Consent applications, were presented to the Council's Area Board for the City Centre (the "Area Board") on 21 August 2006. The Area Board resolved to approve the applications, subject to referral of the Outline Planning and associated Listed Building Consent applications, to the Secretary of State and the satisfactory completion of a planning agreement under section 106 of the Town and Country Planning Act 1990 (the "1990 Act").
2.9 Conservation Area consent to demolish buildings within a conservation area and full planning consent for the alterations and refurbishment of Leah's Yard were issued on 22 August 2006.
2.10 The Secretary of State, acting through the Government Office for Yorkshire and the Humber ("GOYH"), confirmed by letters dated 25 September 2006 and 9 October 2006 that the Secretary of State did not wish to intervene, and that the decision as to whether to grant outline planning permission and the associated listed building consents would therefore remain with the Council.
2.11 The Section 106 Agreement was completed on 6 November 2006 and outline planning permission and associated listed building consents were issued on 6 November 2006.
2.12 At its meeting on 23 April 2001, Cabinet resolved that approval be given to the principle of undertaking a CPO to support the acquisition of critical areas of land and interests, should it prove necessary, thus allowing for the comprehensive redevelopment and regeneration of the NRQ site to occur. The Executive Director, DEL's 'City Centre Projects' report to Cabinet on 24 July 2002, included a detailed paper on the CPO process, advising Members on the main issues involved in making a CPO.
2.13 As recommended in a subsequent report, entitled 'New Retail Quarter: Development Agreement and Lease', at its meeting on 26 April 2006, Cabinet resolved to:
Authorise officers to enter into the Compulsory Purchase Order Indemnity Agreement, the Fire Authority Agreement and the Fire Authority Development and Delivery Agreement insofar as they protect the Council's financial interests and are consistent with the delivery of the New Retail Quarter scheme.
2.14 This Cabinet Report explained that the CPO Indemnity Agreement commits both parties to pursue the CPO and provides the basis on which Hammerson will indemnify the Council against all costs properly incurred.
2.15 The Council has now entered into the Development Agreement and CPO Indemnity Agreement with Hammerson. Under the documentation, Hammerson has agreed to develop and build out the NRQ and meet the process and implementation costs of a CPO needed to carry out the scheme. The Council has also agreed to make a CPO in order to secure any interests that are necessary to facilitate the NRQ scheme.
2.16 The same Cabinet Report noted that, at that time, work had been commenced to relocate some major utility infrastructure (such as major cables) away from the proposed site for the NRQ in order to remove a major potential impediment to the scheme and create a clear construction area. This work, which is now almost complete, represents in excess of 12 million pounds of expenditure.
2.17 Since the Report in July 2002, Hammerson and English Partnerships have been able to make a number of strategic property acquisitions within the NRQ scheme area. Together with land already owned by the Council, and land that is subject to planned relocations e.g. the Central Fire Station and the JLP Department store, about 60% of the NRQ site has been secured.
2.18 Extensive work has been undertaken over the last 7 months to ascertain ownership and interests of every parcel of land within the NRQ. This has included obtaining title information from the Land Registry and conducting site enquiries. Section 16 Notices and Section 5A Notices, to requisition ownership information, were served on the majority of parties on 15 September 2006 and notices were posted on site. Follow-up letters were served on 9 October 2006.
2.19 It has been established, through this land referencing exercise, that there are about 479 known interests, other than those of the Council. Of these, there are about 66 freeholders.
2.20 Hammerson and the Council have appointed specialist agents to use this information to continue negotiations with those remaining interested parties, with a view to acquiring their interests by agreement (this appointment was approved under Band 'A' Delegated Powers). Whilst these negotiations will continue, it is accepted that it will not be possible to acquire all interests on acceptable terms or within a satisfactory timescale. This has become apparent during the land referencing exercise because there are certain parties who may object to the CPO because they are unwilling to sell voluntarily. It is also a large site, with many interests, so the only practical way of ensuring that all land and rights can be assembled in a single ownership and with clean title is to proceed with a CPO.
3. Proposed Compulsory Purchase Order
3.1 It is proposed to make a compulsory purchase order under section 226 (1) (a) of the 1990 Act and section 13 of the Local Government (Miscellaneous Provisions) Act 1976 (the "1976 Act").
3.2 The Council can make a CPO under section 226(1)(a) where it "thinks that the acquisition will facilitate the carrying out of development, re-development or improvement on or in relation to the land", and it thinks (required by section 226(1A)) that, “the development will promote the improvement of the economic, social or environmental well-being of their area”. Under section 13 of the 1976 Act, a local authority may compulsorily acquire such new rights over land as are specified in the compulsory purchase order.
3.3 The Office of the Deputy Prime Minister ("ODPM") (now the Department for Communities and Local Government) Circular 06/04 states that, “a compulsory purchase order should only be made where there is a compelling case in the public interest”. The Circular also recommends that, “Before embarking on compulsory purchase and throughout the preparation and procedural stages, acquiring authorities should seek to acquire land by negotiations wherever practicable. The compulsory purchase of land is intended as a last resort in the event that attempts to acquire by agreement fail. Acquiring authorities should nevertheless consider at what point the land they are seeking to acquire will be needed and, as a contingency measure, should plan a compulsory purchase timetable at the same time as conducting negotiations. Given the amount of time which needs to be allowed to complete the compulsory purchase process, it may often be sensible for the acquiring authority to initiate formal procedures in parallel with such negotiations.”
3.4 The redevelopment of the site of the NRQ is essential to the regeneration and improvement of a large part of Sheffield City Centre and will make a significant contribution to the promotion of the economic, social and environmental well being of the scheme area, the City Centre and Sheffield as a whole. The draft Statement of Reasons, included as an appendix to this report, sets out more fully the reasons why a CPO is considered necessary for the completion of the NRQ scheme.
3.5 The land and rights required for the NRQ scheme are shown coloured pink and blue respectively in the attached reduced size draft Order Map, and are described in the draft Order Schedule, which is available in the Member's Library.
3.6 As stated, the Statement of Reasons, Order Map and Order Schedule are currently in draft form. A final version of the Order Map and an updated version of the Statement of Reasons will be circulated at Cabinet, together with details of any changes. An updated version of the Order Schedule will be placed in the Member's Library prior to the Cabinet meeting. All documents will be available for inspection by the public once the Order has been made.
3.7 The proposed CPO seeks to acquire all land and new rights needed to deliver the NRQ scheme. The specific rights sought are rights of access to adjoining buildings in order to carry out surveys and maintain, alter, remove and replace services, cables and conduits, rear access and emergency escape, to support, construct, waterproof, maintain, repair, replace and renew foundations, walls and roof structures, to prepare and underpin and/or carry out other modification works to foundations, to install temporary ground anchors, to erect scaffolding and temporary hoardings for any such purposes and the right without limitation to tie in a structure and to oversail the same with wall copings, gutters or projections, and the right to swing the jib of a crane, loaded or unloaded, through the airspace above, in connection with the development on adjoining land.
4. Proposed Highways Order
4.1 In tandem with the CPO, Hammerson will submit an application to the Secretary of State pursuant to Section 247 of the Town and Country Planning Act 1990 for the stopping up or diversion, and creation of new highways (the “Highways Order”) that are necessary to enable the NRQ scheme to be carried out.
4.2 A draft Highways Order has been submitted to the GOYH and the Council.
4.3 Officers have confirmed that they believe the Highways Order correctly identifies all of the highways that will need to be stopped up and/or diverted and shows the new highways to be created.
4.4 Authority is to be sought for the Council to formally support the application for the Highways Order and to assist Hammerson to promote the Highways Order at Public Inquiry.
4.5 In addition, there will be a number of traffic regulation orders required in advance of the Highways Order to provide for temporary access arrangements during the construction of the NRQ scheme.
4.6 If required, evidence will be presented at Public Inquiry in support of the Highways Order to demonstrate to the Secretary of State that full consideration has been given to the need to minimise disruption to occupiers and businesses within the NRQ site and the surrounding area during the construction of the NRQ, and once the NRQ scheme is completed, the permanent measures will ensure that pedestrian and vehicle movement within and around the NRQ are acceptable.
5. Rights of Life
5.1 Section 237 of the 1990 Act authorises the erection, construction or maintenance of any building or work on land which has been acquired or appropriated by a local authority for planning purposes if it is done in accordance with planning permission, even if it involves interference with an interest or right to which the section applies, or a breach of a restriction as to the user of land arising by virtue of a contract. The section applies to any easement, liberty, privilege, right or advantage affecting land including rights of support and rights of light.
5.2 The effect of this section is to ensure that where land is owned by a local authority and held for planning purposes then existing rights, which could prevent the development of that land from proceeding, can be overridden. The rights are overridden whether the local authority or a person deriving title from them undertakes the development. Accordingly, Hammerson will benefit from the operation of section 237 if the Council appropriates the land needed for the NRQ scheme for planning purposes.
5.3 The powers contained in section 237 do not remove any legitimate rights of owners or occupiers to compensation, which may arise from the loss of such rights but does remove the potential for excessive claims. If agreement cannot be reached as to the amount of compensation, then this issue can be referred to the Lands Tribunal for a decision in the same way as for compensation under a CPO.
5.4 Hammerson has commissioned a 'rights of light' survey from a specialist 'rights of light' surveyor. The report has concluded that there are certain properties that will be affected to an extent that claims for compensation are possible. It should be appreciated that this is a financial matter and the extent of the reduction in light is not necessarily such that would be considered as part of assessing the planning applications.
5.5 Hammerson accept that they are likely to have to pay compensation in some instances and are not seeking to escape from that responsibility. However the formal approval of Cabinet to use the powers in section 237, if it is necessary to do so, will enable them to enter into negotiations in the knowledge that these provisions are in place. If individual building owners feel that they are not being offered a fair amount of compensation the matter can be referred to the Lands Tribunal for a decision but this will not prevent the development from going ahead.
5.6 Whilst much of the land has and will be acquired for planning purposes, parts of the site have been previously acquired over many years using a variety of different statutory powers.
5.7 In order for section 237 to apply to the whole NRQ site, the whole site must be held for planning purposes, and it is therefore necessary to formally confirm that any part of the NRQ site not currently held for such purposes is appropriated for planning purposes as from the date of this Cabinet meeting.
6. Legal Implications
6.1 The CPO Indemnity Agreement, as mentioned in paragraphs 2.13 and 2.14, provides for Hammerson to indemnify the Council in respect of all of the costs and expenses incurred in acquiring interests required for the NRQ scheme. This includes, in particular, potential costs to acquire statutorily blighted property, for which the Council may become liable very soon as a consequence of embarking on the compulsory purchase procedure.
6.2 Circular 06/04 notes that, “compulsory purchase proposals will inevitably lead to a period of uncertainty and anxiety for the owners and occupiers of the affected land”, and states that, “it is essential that the acquiring authority keeps any delays to a minimum by completing the statutory process as quickly as possible”. In recognition of this advice the CPO Indemnity Agreement provides for the making of the CPO within 2 months of seeking the Resolution, and to seek confirmation of the CPO from the Secretary of State as soon as possible.
7. Financial Implications
7.1 The financial implications of the NRQ project have been considered in detail at the Cabinet meeting on 26 April 2006, when approval was given to enter into the CPO Indemnity Agreement. As previously stated, in this report, the CPO Indemnity Agreement provides for Hammerson to indemnify the Council against all costs in preparing and making the CPO and paying compensation.
8. Equal Opportunities Implications
8.1 An Equality Impact Assessment was not considered necessary as the planning process for the scheme will consider and address all relevant matters.
9. Human Rights Implications
9.1 The Human Rights Act 1998 incorporated into domestic law the European Convention on Human Rights ("the Convention"). Specific rights protected by the Convention include, amongst others:
· The right of everyone to the peaceful enjoyment of their possessions, which can only be impinged upon in the public interest and subject to relevant national and international laws;
· The right to a fair and public hearing for those affected by the Scheme, including those whose property rights are affected by the Scheme; and
· The right to a private and family life, home and correspondence, which again can only be impinged upon in accordance with law and where such encroachment is necessary in the interest of national security, public safety or the economic well being of the country.
9.2 The above rights would be engaged by the use of a CPO to acquire land for the Scheme. However, the European Court has recognised that "regard must be had to the fair balance that has to be struck between competing interests of the individual and of the community as a whole". Any interference with a convention right must be necessary and proportionate.
9.3 In light of the significant public benefit which would arise from the implementation of the Scheme, and the fact that the known owners and occupiers of land within the site have been contacted regarding the scheme and will, should their land be compulsorily acquired, qualify for compensation under the Compensation Code, the Council has concluded that it would be appropriate to make the Order. It does not regard the Order as constituting any unlawful interference with any individuals' rights under the Convention, including in particular any property rights.
10. Environmental Sustainability
10.1 It is intended that the NRQ be implemented in such a way as to maximise, within the limits of commercial viability, environmental sustainability. This means that the adverse implications for the environment will be kept as low as reasonably practicable. The Environmental Sustainability of the NRQ scheme was dealt with in more detail in the report to Cabinet on 26 April 2006.
10.2 Whilst the detailed design of the NRQ is not yet finalised, any interference with listed buildings will be in accordance with the terms of any permissions or consents granted in relation to such buildings. In particular, it is intended that a refurbishment of the Grade II* listed Leah's Yard (20-22 Cambridge Street) will be carried out, and that improvements will be made to the setting of the grade II listed Salvation Army Citadel on Cross Burgess Street.
10.3 The Outline Planning Permission was accompanied by an Environmental Statement, which was considered when evaluating the application.
11. Consultations
11.1 Extensive research into the strategy for improving the fortunes of the City Centre began in the late 1980's, through repeat household interview surveys, detailed discussions with major retailers and an extensive commercial audit of the City Centre. The findings of this research were used in the Hillier Parker and Oxford Institute of Retail Management 'Shopping Study' report published in July 1994, which recommended large scale retail development to unify The Moor and Fargate.
11.2 The subsequent City Centre Masterplan, out of which the NRQ site emerged, was produced in 2000 after extensive public consultation and surveys with local businesses. Over 230 organisations were then contacted as part of the consultation for the Supplementary Planning Guidance for the New Retail Quarter.
11.3 Consultations have also been undertaken with GOYH, Sheffield 1, English Partnerships, South Yorkshire Fire & Rescue Authority, South Yorkshire Police, South Yorkshire Passenger Transport Executive, local businesses including the John Lewis Partnership and business groups including the Chamber of Commerce and the Devonshire Quarter Traders Association to ensure they are aware of the NRQ scheme and the proposal to make a CPO.
11.4 The majority of parties affected by the NRQ scheme were advised of the proposed timetable for the compulsory purchase process in a letter dated 31 July 2006. They were informed of the compulsory purchase process and invited to make contact with the Council in the first instance, in order to discuss any concerns that they may have. They were advised that agents appointed by the Council and Hammerson will contact them shortly with a view to agreeing terms for the payment of compensation for the acquisition of their interests. The parties were encouraged to seek their own advice from suitably qualified advisors, and were given the Royal Institution of Chartered Surveyors CPO Helpline telephone number, where they will be put in touch with a local specialist who will be able to advise them.
11.5 It is expected that the making of a CPO will encourage affected parties to actively enter into negotiations to agree terms for compensation and/or relocation.
12. Reasons for Decision
12.1 The use of a CPO to assemble the land required for the Scheme is possible under sections 226 (1) (a) of the 1990 Act, and would be justified in light of the compelling case in the public interest for the implementation of the Scheme. If a CPO is not used, it is possible that the land required for the Scheme may never be assembled. For these reasons it is suggested that Cabinet adopt the recommendations described in section 13 below.
13. Recommendations
13.1 That authority be given for the Council to make a Compulsory Purchase Order under the powers conferred by Section 226 (1) (a) of 1990 Act, and section 13 of the 1976 Act, to acquire land and rights shown on the Order Map displayed at the meeting of Cabinet on 13 December 2006 and marked 'Map referred to in the Sheffield City Council (Pinstone Street and Trafalgar Street) (New Retail Quarter) Compulsory Purchase Order 2006'.
13.2 That the Assistant Chief Executive Legal and Governance be authorised to make the CPO, to take all necessary procedural steps prior to and after the making of the CPO, to enable the CPO to be submitted to the Secretary of State for confirmation including:
(a) finalising the attached draft statement of reasons;
(b) finalising the Schedule of Interests
(c) serving notices of the making of the CPO on all persons entitled to such notice and placing necessary press notices;
and to submit the CPO to the Secretary of State for confirmation.
13.3 That the Assistant Chief Executive Legal and Governance be authorised to sign and serve any notices or documents necessary to give effect to these recommendations and to take all other actions necessary to give effect to these recommendations.
13.4 As soon as the Order is confirmed by the Secretary of State to advertise the confirmation of the CPO and serve all necessary notices of confirmation and once the CPO becomes operative, the Assistant Chief Executive Legal and Governance be authorised to serve Notices to Treat under Section 5 of the Compulsory Purchase Act 1965, and where necessary, to serve Notices of Entry under Section 11 of the same Act in respect of the land included in the Order, or to execute general vesting declarations under the Compulsory Purchase (Vesting Declarations) Act 1981.
13.5 That the Head of Corporate Property, in consultation with the Assistant Chief Executive Legal and Governance be authorised to manage the compulsory purchase process in accordance with the terms of the CPO Indemnity Agreement.
13.6 That Cabinet confirms that such parts of the NRQ site already owned by the Council, but not currently held for planning purposes, are appropriated for planning purposes and as from today's date are held for planning purposes.
13.7 That, if necessary, the Council will use the powers contained in Section 237 of the Town and Country Planning Act 1990 in order to ensure that the NRQ scheme is not prejudiced by claims of interference with rights to which the section applies.
Appendices:
Draft Statement of Reasons
Draft Order Map (final Order Map to be displayed at Cabinet)

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This document contains Appendix A - Statment of Reasons, to the New Retail Quarter report (142 KB)
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This document contains Appendix B - Map, to the New Retail Quarter report (458 KB)