Brighton & Hove City Council - Policy & Resources Committee

Agenda Item 42

Subject: Patcham Court Farm Disposal

Date of meeting: 29 July 2022

Report of: Executive Director Economy, Environment & Culture

Ward(s) affected: Patcham

For general release

1.1 To seek approval for the disposal of a long leasehold interest in this site to Royal Mail for the development of a new delivery office, which will allow Royal Mail to consolidate their sorting office services and vacate their 2 existing sorting offices in Brighton and Hove.

1.2 The disposal will generate a net capital receipt for the council and will be conditional on Homes for Brighton and Hove LLP being granted an exclusivity period by Royal Mail to develop initial proposals for the acquisition of the 2 sorting offices they are vacating. The sites would be acquired for the development of housing and employment space.

2.1 That Committee agrees to the disposal of the long leasehold of this property and that delegated powers be given to the Interim Executive Director Economy and the Executive Director Governance People & Resources to approve terms and take any necessary steps to facilitate this recommendation.

2.2 That Committee notes that the disposal will be conditional upon the grant of an exclusivity period to Homes for Brighton and Hove LLP for 4 months to allow Homes for Brighton and Hove LLP to develop and submit initial proposals to Royal Mail for the acquisition of one or both of the 2 existing sorting office sites.

2.3 That Committee agrees that the net capital receipt, less any disposal costs, will be used to support the council’s 5-year Capital Investment Strategy.

Patcham Court Farm

3.1 Patcham Court Farm is a 3.6 acre strategic site allocated in the adopted City Plan Part 1 for office and light industrial use to provide employment space for the city. It originally formed part of a wider agricultural holding and was severed from the main farm in 1989/90 by the construction of the A27 Brighton relief road. It comprises a number of large buildings in disrepair and is heavily screened by existing trees and vegetation. (See plan attached as Appendix 1).

3.2 The site has remained undeveloped for over 30 years and is currently occupied as open storage. There have been 8 attempts since the early 1990’s to redevelop the site with various feasibility studies and marketing campaigns undertaken to consider a number of uses including park & ride, supermarket, offices and hotel. During that time a number of unsolicited approaches have been received from interested parties including the proposal from Royal Mail in 2018.

3.3 Since then the council has been working in collaboration with Royal Mail to assist them in developing a scheme which consolidates their existing sorting office services from their 2 sites in North Road, Brighton and Denmark Villas, Hove to the Patcham Court Farm site, facilitating the closure of the 2 existing sorting office sites and their disposal for redevelopment.

3.4 The consolidation of the existing sorting office services from the 2 sorting office sites will deliver employment use on the Patcham Court Farm site and will retain 100% of the 362 Royal Mail jobs in the city.

Planning Policy

3.5 The site is identified within the built up area in the City Plan Part 1 (CPP1) and is allocated as a strategic employment site under Policy CP3. It is allocated for 6,500 sq m of office and light industrial floorspace in order to meet the identified employment floorspace requirements over the plan period (to 2030).

3.6 The site is identified in the CPP1 as an area of Archaeological Investigation and a Nature Improvement area. An ecological assessment and the provision of appropriate mitigation, compensation and biodiversity net gain will be required with any planning proposals. Royal Mail are undertaking a programme of ecological surveys, which began in March 2022 and will complete in October 2022. The site sits immediately north of Patcham Village Conservation Area.

3.7 The site has excellent road transport links located at the A27/A23 interchange. The relocation of the existing Royal Mail sorting offices services will remove vehicular movements from the city centre as the Patcham Court Farm site has immediate access to the main road network. Principle vehicular movements into the city centre will be outside of peak times. Meetings have been held with both Brighton & Hove’s City Council Highway team and National Highways.

Royal Mail has undertaken traffic surveys assessing existing road usage and its own vehicular movements which in the main fall outside the main peak hours for typical office type usage. A Transport Assessment and Travel Plan form part of the planning application considering both operational and private vehicle usage. The vehicle delivery fleet will be fully electric and there will be provision for staff vehicular charging on the redeveloped Patcham Court Farm site. It is proposed access to the site will be in the south west corner or the site to minimise the impact on local amenity.

3.8 Royal Mail have undertaken a communication and engagement strategy to consult with stakeholders and local residents in advance of submitting a full planning application. Local stakeholder groups and over 2500 residents were invited to attend 2 webinars in January 2022. The overall feedback suggested positive support for regeneration of the site, the building design, along with its green credentials and also the employment benefits.

Concern was expressed regarding the lack of information at the time around traffic movements and the potential noise and parking issues the development may generate. As a consequence Royal Mail have met with Brighton & Hove’s City Council Highway team and National Highways and have revised the location of the site access point to mitigate the impact on the local road network and on surrounding properties. On-site parking has been slightly increased and landscaping / screening areas also enhanced.

3.9 Royal Mail have submitted two Pre Applications seeking Planning advice on their proposals, in 2019 and 2021. The initial Pre Application considered 3 options and identified the need to compare the proposals against the office allocation in the City Plan Part One whilst also considering: the quality of accommodation; visual impact from both Patcham village and the South Downs; neighbouring amenity, ecology and sustainability. The second Pre-Application acknowledged the guidance provided in the earlier advice having the benefit of further survey and design work.

3.10 As a consequence of the Pre Application advice received optimal levels for building siting have been established; enhanced landscaping areas designed and a raft of sustainable elements included, as well as detailed ecology studies being progressed. An Interim Ecological Impact Assessment has been undertaken and ongoing monitoring will also take.

These surveys will continue until the Autumn and will feed into the planning process to address any findings, with consideration being built into the design for any planting or relocation.

3.11 A market exercise has also been commissioned by Royal Mail to consider the suitability of the site for alternative office use, acknowledging that the proposed Royal Mail use will retain significant employment within Brighton and Hove. Royal Mail have a Planning Performance Agreement in place and have submitted a full planning application.

Sustainable development

3.12 The site will be a fully carbon neutral site exceeding the building regulations sustainability measures by 47%. The facility will deliver a number of environmental and sustainable measures including:

• biodiversity contributions.
• The use of sustainable urban drainage systems (SUDS).
• The use passive heating and cooling strategies.
• The delivery fleet will be fully electric and the site will provide electric charging points for staff.
• The use of innovative, low energy design and construction methods that add to the sustainability, biodiversity and quality of the natural environment through the inclusion of elements such as chalk grassland roofs, PV panels, green walls and drought resistant planting, to minimise the visual impact of the development.
• Secure cycle storage with facilities that encourage use of a sustainable and green transport strategy.
• Effective re-use of materials on site and minimising construction waste to landfill.
  
  

Disposal

3.13 Heads of terms for the long leasehold sale are in negotiation. The anticipated value of the site is set out in Part 2 of this report. The disposal will be subject to Royal Mail obtaining planning permission for the development of the Patcham Court Farm site and the acquisition of land or appropriate rights of access over adjacent Highways England land. In addition, the site is currently let for open storage and the provision of vacant possession by the council will be a condition of the sale.

3.14 The final valuation and terms for the disposal will not be finalised until there is greater certainty on the acquisition by Homes for Brighton and Hove LLP of the 2 existing sorting office sites. The price and terms agreed will represent best consideration.

Acquisition of the 2 existing sorting office sites

3.15 The relocation and consolidation of the existing Royal Mail sorting office services unlocks 2 significant development sites at North Road, Brighton and Denmark Villas, Hove with the potential to deliver a minimum of 177 residential units and 3000sqm of employment space. Within the Proposed Submission City Plan Part 2 the North Road Brighton sorting office site has an allocation for an indicative 110 residential units and 3,000sqm of office employment space. The Denmark Villas, Hove sorting office site has an allocation in the City Plan Part 2 for an indicative 67 residential units and is included in the Hove Station Area Master Plan SPD.

3.16 The council has considered the potential to purchase both the Brighton and Hove sorting office sites to be developed as council housing through the council’s New Homes for Neighbourhoods programme. Work was undertaken to assess if the type of development would be financially viable and officers concluded that a council led development would not be possible.

3.17 More recently the Homes for Brighton and Hove partnership between the council and Hyde Housing Association has considered the 2 sites for redevelopment for mainly residential schemes with the provision of minimum 40% affordable housing. The partnership’s Business Plan has recently been revised and it is anticipated that one or both of the sites may be developable within the parameters of the new Plan which looks to deliver a mix of social rent and shared ownership homes.

3.18 Whilst it is Royal Mail’s desire to sell the 2 sites on the open market to secure best price, to support their investment into the Patcham Court Farm development, they are willing to put the marketing of the sites on hold for a period of 4 months to allow Homes for Brighton and Hove LLP to complete work in reviewing the sites and submit initial proposals to Royal Mail for them to consider. Such proposals would, if of interest to Royal Mail, form the basis of future negotiations to secure an extended option to allow Homes for Brighton and Hove LLP to prepare detailed schemes for one or both sites, secure planning permission and negotiate terms with Royal Mail for their acquisition.

Retain the site for open storage

4.1 The site is in a dilapidated state and would require additional investment to ensure its safe occupation for open storage in the future. This is not the optimum use for the site and given the need for a modernised, sustainable service by the Royal Mail and additional housing for the city, would represent a poor use of a valuable brown field development site.

4.2 If Royal Mail were unable to secure the site for the reprovision of their service they may look further afield, which could result in the loss of Royal Mail jobs in the city. In addition it would likely delay Royal Mail’s disposal and therefore the redevelopment of their existing sorting office sites. Homes for Brighton and Hove LLP would forgo any opportunity to submit proposals for the acquisition of the sites in advance of Royal Mail marketing them.

Retain the site for alternative future redevelopment

4.3 Patcham Court Farm has sat undeveloped for over 30 years despite having an allocation in the 2005 Local Plan and the 2016 City Plan Part 1. Several attempts to develop the site have proven unsuccessful. The council has been working with Royal Mail to develop a scheme for 4 years, which addresses a strategic requirement for Royal Mail and unlocks 2 significant development sites at North Road, Brighton and Denmark Villas, Hove, with the potential to deliver an indicative 177 residential units and 3000sqm of office space.

To reject the proposal to dispose of the site to Royal Mail would likely result in the relocation of the Royal Mail service out of the city with a potential loss of employment. In addition, the ability for Royal Mail to vacate the 2 existing sorting office sites would be delayed. Homes for Brighton and Hove LLP would forgo any opportunity to submit proposals for the acquisition of the sites in advance of Royal Mail marketing them. There would be significant risk in the council’s ability to dispose of the Patcham Court farm site for an alternative development proposal in the short term.

4.4 The site is allocated for office and light industrial uses in the adopted City Plan Part 1 and therefore residential use would not be in accordance with its allocated use. As detailed in the report the relocation Royal Mail will release the two former sorting offices for re-development, these sites are allocated in the City Plan Part 2 for an indicative 110 homes and 3000sqm employment floor space for the Brighton site and 67 homes for the Hove site.

Dispose to Royal Mail – recommended

4.5 The disposal would provide a net capital receipt for council. It would allow Royal Mail to modernise its existing services and deliver sustainability improvements whilst retaining employment within the city. It would unlock 2 development sites to provide additional housing and employment space.

5.1 Royal Mail have undertaken a communication and engagement strategy to consult with stakeholders and local residents in advance of submitting a full planning application. Local stakeholder groups and over 2500 residents were invited to attend 2 webinars in January 2022. The overall feedback suggested positive support for regeneration of the site, the building design, along with its green credentials and also the employment benefits.

Concern was expressed regarding the lack of information at the time around traffic movements and the potential noise and parking issues the development may generate. As a consequence Royal Mail have met with Brighton & Hove’s City Council Highway team and National Highways and have revised the location of the site access point to mitigate the impact on the local road network and on surrounding properties.

On-site parking has been slightly increased and landscaping / screening areas also enhanced. Additional consultation will be completed as part of the planning process.

6.1 The Patcham Court Farm site has sat undeveloped for over 30 years. Royal Mail have developed a proposal over 4 years in consultation with the council to redevelop the site to provide a modernised and sustainable service provision for themselves. The relocation of their existing services will unlock the 2 existing sorting offices in Brighton and Hove for redevelopment which will deliver an indicative 177 residential units and 3000sqm of employment space. A full Planning Application has been submitted.

6.2 The council has explored the acquisition of the 2 existing Royal Mail sorting office sites which will be vacated by Royal Mail following development of the Patcham Court Farm site but was unable to deliver viable schemes. Homes for Brighton and Hove LLP are considering both sites for the delivery of housing including affordable housing. Royal Mail will grant Homes for Brighton and Hove LLP a 4 month exclusivity period to work up proposals with a view to negotiating an option on one or both of the 2 sites.

7.1 The disposal of the property will generate a net capital receipt for the council less any disposal costs. The capital receipt will be used to support the council’s corporate Capital Investment Strategy as approved in the budget report presented to this committee 10 February 2022.

Name of finance officer consulted: Rob Allen Date consulted: 19/07/22

8.1 Section 123 of the Local Government Act 1972 enables a local authority to dispose of land provided it achieves the best consideration reasonably obtainable. As set out in the body of the report, the disposal of the site will not take place unless the Council’s Valuer is satisfied that the price agreed meets this test.

Name of lawyer consulted: Joanne Dunyaglo Date consulted: 18/7/22

9.1 It is not considered that the proposal would negatively impact on any particular group in relation to their ‘protected characteristics’. Therefore, no equalities implications have been identified as arising from this report.

10.1 As part of the proposed development of the site Royal Mail are proposing a number of sustainability measure to provide an energy efficient building, secure improvement to the biodiversity of the site and improve the energy efficiency of the transport fleet.

11.1 Planning will require an Employment & Training Strategy to ensure training, local employment and local supply chain opportunities are maximised with the development of the site and released sites.

Supporting Documentation

Appendices - 1. Location Plan

Background documents - None