Planning Advisory Service Viability Course COMMISSIONING AND INTERROGATING ADVICE

1. Planning Advisory Service Viability Course COMMISSIONING AND INTERROGATING ADVICE

2. When to seek professional advice • To inform a negotiating position in relation to a specific application or project • To guide policy

3. The differences • Policy studies • Higher degree of generalisation appropriate: typologies • Standard assumptions about values & costs • Not practical to consider how individual sites differ • Specific schemes • Detail is required to achieve the required level of usefulness and accuracy

4. Where to secure advice • In-house • Use simple model and this advice • May want consultant to ‘audit’ conclusions • Out of house • Brief should ask for explicit methodology • To ensure approach is broad enough to reflect variations across study area • Cover demand, value, forecasting and assessment of market risks • Neither!

5. Approaches • There tend to be two approaches usually adopted: • Confrontational: Each side uses its own information to negotiate • Collaborative: Both sides try to arrive at a shared view • This can take two forms: • confrontational = minimal information shared • collaborative = open book

6. Specific schemes - confrontational • Developer always holds upper hand • Holds back information on how layout can be improved • Has specific advice on values and costs • Knowledge of terms of land purchase and scheme financing • This cannot be replicated or second guessed • But forensic examination will help on specific issues • Use of model as an alternative

7. Specific schemes - collaborative • Superior because it improves the information available to the LPA. • But be careful • Advice from developer can be ‘loaded’ • Financing arrangements • Values • Developer will only agree if model used produces an outcome no less advantageous than their own

8. Assessing value • Need information on design, layout and phasing • Main information on values • Locally-based agent vs regional/national practice

10. Approaches to assessing value • Sometimes just a phone call will suffice • Surveyors reports • Liability restricts outputs • Insist that all calculations and background information is provided • Sensitivity analysis • Quantified market forecast • Particularly from larger consultancies

11. For local firms, distinguish between chartered surveyors and estate agents • One knows valuation and appraisal; one knows local markets

12. Assessing costs • Need engineering and cost consultancy advice • Generally expensive • Cut your cloth accordingly • Some needs can be more easily met than others • Is desktop study going to give you the answer you need?

13. Procurement approaches • Panel of consultants • Main advisor (district valuer, in-house surveyor) • Individually tendered to consultant

14. Procurement advice • The brief • Ask for explicit methodology • Don’t ask open-ended questions • Be focused in what you want - avoid long ‘shopping lists’ • The invitation • Likely to be wide and differing levels of suitability for the job • Don’t get wrong firm at right price

15. ITT requirements • A lot of smaller firms won’t be able to tick all the boxes • E.g. H&S, Equal Opportunities, ISO, QA procedures

16. CASE STUDIES • Plan making • Development management

17. Strategic advice – North Chelmsford AAP Source: North Chelmsford AAP Submission Document

18. Commissioning approach • Chelmsford BC approach 3 firms informally • RTP helped CBC shape the brief • Key questions • Are requirements for developer-funded infrastructure sound, justifiable and practically achievable? • How should development be phased to ensure necessary infrastructure can be delivered? • What changes/additions need to be made to NCAAP?

19. Several iterations of brief • Helped to focus on most relevant needs • Tasks to fit AAP timetable • Four stages • Two dimensions of assistance: • Tactical (AAP and live applications) • Technical (a Deliverability Assessment)

20. Commissioning approach…cont… • Fixed fee, with additions as necessary, for each • e.g. cost consultancy for distributor road • So important to factor in a contingency where there are uncertainties

21. Outputs • Interim outputs (Stages 1 and 2) • Viability Assessment Report • Recommended changes to AAP • Simple and transparent viability model (A4 sheet)

23. Site-specific advice – Canada Water, Southwark Source: Conrad Phoenix

24. 2.31 ha site Occupied by 2 large retail sheds – 6,190m²

25. Proposed uses • 430 residential units • 4-10 storey buildings • Two main “phases” (two architects) • 9,104m² retail store (pre-let) • 1,287m² of other A1/A3/A4/A5 space • 644m² B1 office space • 528m² D1/community space • Basement car parking 340 cars • Extensive public realm improvements

26. Viability issues • Southwark BC policy 35% affordable housing • Southwark priority for full 106 = c £4m • Developer offering <25% affordable • Developer advised by Savills • Three Dragons model (GLA standard) used • Southwark used Borough Valuer to review inputs

27. Disagreement about important inputs: • Purchase price • Build costs • Sales values • Three Dragons model the ‘standard’ in London • But didn’t provide a solution parties could agree

28. Issues with approach…cont… • No site specific work commissioned by LBS • Relied on generic advice and local comparables • Developer had to commission some extra work on main disputed variables • Over 25% affordable housing required politically

29. In the end, developer made an “offer” to settle • 27% affordable housing (even though not 3D viable) • Agreement to review viability for Phase 2

30. Lessons • Highly competent DM officer but • Did not fully understand viability • Forced to rely on internal advisor • Acted mainly as go-between for the two valuers • Could not intervene and negotiate effectively • Result was a wasteful process • 9 months of negotiation between valuers • No mechanism for resolution • Planners do need to understand viability for the DM process to be efficient