In February 2019, the Council approved the Planning application for the 17 floor, 201 apartment block due to be located on Phoenix Street, overlooking St Alkmund’s way. Although, at the time it was subject to approval by the Secretary of State, this was closed out by the end of March 2019.
Since then, the “target date” for completion of discussions with the Council has been delayed a further two times, with the latest end date being 31 July 2019.
In its “Statement of Development Benefits” published in November 2018, Godwin referred to the project having “challenging timescales”, and that, funding would need to be deployed by 3rd parties, by 1 July 2019, and that work would begin on site in August 2019. Godwins cannot afford for the project to be delayed with finance costing in the region of 9-11%pa.
Currently the land is still under the ownership of Phoenix Properties (Derby) Limited pending the sale to GC No 2 Ltd – Godwin’s “front” company for this project.
S106 agreement ( Developer financial contributions)
Under the Council’s standard s106 obligations, Godwins should be making contributions towards
” affordable housing, flood mitigation, amenity green space, major open space, highways, sports facilities, public realm, health and community facilities.”
Godwins stated (as reported in the documents to the Planning Committee) that the business case was so marginal that
” the development cannot afford to provide the majority of these contributions. The applicant has therefore submitted a full financial appraisal that demonstrates that the development cannot afford to make contributions through a S106 Agreement. This appraisal has been rigorously assessed by the District Valuer as an independent body and they have agreed with the conclusion that no S106 contributions can be afforded. The applicant has agreed to make contributions towards flood mitigation measures and a Traffic Regulation Order to allow safe access.”
Despite this, the Council required a clause to be inserted to ensure that, in the circumstances that additional profit was made by the Developer, that:
“Council and the developer will share the uplift in profit to allow the contributions outlined above to be provided in the future. The profit level will be assessed towards the end of the development and any additional profit will be shared 50/50 with the developer up to a cap that is equivalent to the policy compliant level of contributions which should have been paid by the development”
Since writing the last article on this subject, the holding company (Godwin Residential Ltd) , for the company (Godwin Residential Developments Ltd) which has a “significant controlling interest” in GC No 2 Ltd, has been struck off the Companies House register. Subsequently Godwin Residential Developments Ltd has changed its name to Godwin Residential Ltd.
[More detail on Godwin’s ‘complex’ corporate arrangements “Derby’s new Landmark building: Questions to be asked about the Property Developer, Godwin “group” in a previous Derby News article]
4 months after the planning approval, there are no details of the progress of, what will be, one of Derby’s largest buildings.
It is clear from the statement on the s106 contributions that Godwins are working on (unusually) wafer-thin margins, no doubt driven by the expensive finance. This effectively means that Derby will lose out on much needed infrastructure, to support the aspirations of a private company desperate to make a mark on the City’s skyline.
As suggested in the previous article. Has Godwins overstretched itself? Are we seeing the first signs that the project is sliding to the right? Does this question the economics of the project?
Categories: Derby City Council