Princes Parade Project Working Group 13 th March

Princes Parade Project Working Group 13 th March 2018

Purpose and Scope • To provide the Working Group with an overview of the results of the work undertaken in relation to the Princes Parade Project in advance of the forthcoming report to Cabinet setting out the business case for the project. • To seek the views and input of the Working Group prior to the preparation of the Cabinet report.

Topics covered • Princes Parade planning application (Y 17/1042/SH) update. • Leisure Centre Business Case – presentation by the Sports Consultancy • Programme and procurement advice – presentation by Hadron Consulting including contractor soft market testing. • Princes Parade Viability Report overview • Residential soft market testing update • Next steps and forward programme.

Planning Application update Additional information submitted to LPA covering • Cost and Viability – including a comparison with a scheme for Nickolls Quarry. • Heritage – in response to HE representation • Ecology – responding to KCC EAS, EA (also CPRE and KWT) • Lighting impact of residential properties on canal with updated ecology response. • Transport – clarification of details and Stage 1 Safety Audit

Leisure Centre Business Case • 2014 -15 used for analysis of the revenue performance of the centre. • Net operational position – £ 271, 770 deficit • Demographics – 6, 000 people within a mile. • 76, 000 within a 12 minute drive (takes in Hythe, Saltwood, Sandgate, Folkestone, Hawkinge, Etchinghill and Palmarsh). • Biggest groups of the population (the 6000) are aspiring homemakers (26 -35) and senior security both accounting for 13. 5%. Senior security average of 75.

Leisure Centre Business Case • Latent demand for fitness is 2334 memberships • Business plan – management fee of £ 61, 009 over a 10 year average. Payable as income to Shepway District Council by the operator. • 10 year average throughput of 351, 276 per annum • 10 average in terms of membership 2037. • Revenue turn around - £ 332, 779 = £ 3. 4 million over 10 years. • Leisure Centre has potential to be used by visitors/tourists – allowance made for 20% of the total to come from outside the estimated catchment area

Leisure Centre Business Case • • • Management options – In-house, outsource to a specialist operator, new leisure trust, asset transfer. Soft market testing – 9 existing trusts with 7 responses. 5 said they were interested in the opportunity with the other two potentially dependent on timing. General preference for a 10 to 15 year contract with an extension option in line with recent examples.

Procurement and Programme Presentation by Stephen Jepson of Hadron Consulting

Princes Parade Viability Report Based on cost plan prepared by Betteridge and Milsom • Princes Parade Phases 1 (as described in Hadron presentation) – total cost £ 28. 7 million SDC contribution £ 2. 1 million • Nickolls Quarry two storey scheme – total cost £ 26 million SDC contribution - £ 15. 8 million

Princes Parade Viability Report Cost and viability assessment assumes • £ 14. 3 million valuation of remediated/serviced residential/commercial land (Savills) • £ 5 million valuation of existing swimming pool site without affordable housing due to existing commercial floorspace (Savills) • Reinvestment of CIL - £ 1. 1 million • Use of Hythe S 106 affordable housing contribution £ 1. 4 million. Secured by SDC from nearby Imperial Green scheme. • Nickolls Quarry S 106 - £ 4. 7 million (with indexation)

Residential/Commercial Soft Market Testing Co-ordinated by BNP Paribas. Discussions with • • Kentish Properties Pentland Homes Jenner Construction Sunningdale House TG Designer Homes ICC _ PLC Bellway Crest Nicholson

Residential/Commercial Soft Market Testing Key outcomes : • High level of interest from both local and national housebuilders • Preference to acquire a single plot for the full 150 homes • Input on the phasing of the remediation strategy. • Interest in pursuing a joint venture/structured land sale rather a straight land sale. • Interest in commercial land existing pool site.

Next Steps and Forward Programme • • • Planning and Licencing Committee estimate - April 2018 Business Plan to Cabinet May 2018 Progress procurement of core team, leisure operator and phase 1 contractor following PLC and Cabinet decisions. Commence disposal process for residential/commercial land – Summer 2018 Ongoing programme of ecological survey work and mitigation. Construction to commence – 1 st Quarter 2019