Decision details

To prepare a planning application for the conversion of 145 Heene Road into Temporary Accommodation (TA).  This will be funded using the remaining options assessment budget of circa £25,000 allocated to the site by JSSC in June 2023.

The Council have committed to purchasing 145 Heene Road for £516,000 as part of the development of the Worthing Integrated Care Centre (WICC).

Three options have been considered for the property:

Sale

Commercial letting

Redevelopment for residential use as EA/TA.

The recommended option is to redevelop the site for EA/TA.  Draft plans show the site can deliver up to 7 residential units, however following consultation with Housing the scheme will be revised to deliver either 5 or 6 larger units (to include 2-bed units, as opposed to only proposing studio and 1-bed units).

A financial viability assessment shows that a development of 5 units would make a saving to the Council’s Temporary Accommodation budget in year 1 of £19,490. The development would deliver an average annual saving to the Council of £65,151 over 50 years.

A financial viability assessment shows that a 6 unit scheme would deliver a saving in year 1 of £21,382, and an average annual saving of £64,322 over 50 years. 

Sale

Advice was sought from 2 x local agents on the disposal of the property.  The agent’s findings were overall consistent with one another.  They advised that the property could be sold as is for between £400,000-£435,000.  They said that a private developer seeking to convert the property to flats would likely value the site at £400,000 or lower, after considering developer profit and development costs. 

The agents agreed that the best sales strategy would be to sell with Prior Approval in place for the principle of the conversion of the building into a single residential unit, because a private family buyer may place greater hope value on the prospect of converting the property into a family home.  One agent suggested this approach could generate a site value of £450,000-£500,000.

The agents’ advice shows that the Council would make a loss if the property was to be sold on.  Therefore sale of the property is not recommended.

Commercial letting

The Council’s property team have confirmed they do not see value in leasing the property.

Mitigation of risks of preferred option

The initial risk with the preferred option is the planning risk of converting a commercial property to residential.  This has been mitigated by consulting with planning, who accept the principle of development and have provided positive feedback on the initial scheme.

Another risk to converting a building is dealing with unknowns during construction, however this will be mitigated by early opening up.  Initial cost advice on the construction has also been provided by Potter Raper who are the Employers Agent on a highly comparable site for the Council.  Therefore the appraisal estimates are based on external professional advice in order to minimise the financial risk of the project.

Financial thresholds are set by the procurement team in order to ensure suitably-sized contractors bid for the work and have the commercial strength and track record to deliver.