ST MODWEN – Aligned Core Strategy Examination MATTER 4 STATEMENT Page 1

Greater Nottingham Aligned Core Strategy Examination STATEMENT ON BEHALF OF ST MODWEN MATTER 4: ECONOMIC DEVELOPMENT (POLICY 4) Q. 3 Does the evidence base1 justify the proposals for employment provision and economic development including the figures for new office floorspace and employment land in Policy 4?

1. Part (d) of Policy 4 retains 37 hectares of employment land as a minimum to ensure a sufficient supply of industrial and warehouse land over the plan period (2011-2028). This is a function of the net loss of industrial warehouse land that needs to be made up in the period from 2006 to 2026 of 80.6 hectares over a wider area (taking into account also Erewash, Hucknall and Rushcliffe) as summarised by Table F.1 of the Economic Background Paper, June 2012. The 80.6 hectares itself has been generated by balancing projected losses of industrial warehouse land, bought about by structural decline in this sector, against planned loss of existing industrial land.

2. The overall logic of this approach is not in dispute. The continuing long term reduced demand for industrial and warehouse land is already well documented by economic and property data and analysis. However, the approach taken in distributing the supply of 37 hectares across Nottingham, Broxtowe and Gedling is arbitrary and is not consistent with either the evidence base or the wider policy approach of the Core Strategy.

3. Supply is distributed according to just one outcome – existing supply of development land for each authority. No account is taken of:- the demand profile of the three authorities; the relative level of planned losses; and housing growth.

4. All three of these factors should be relevant in distributing new employment land across the three authorities and are consider briefly below. Both Broxtowe and Nottingham enjoy a better demand profile than Gedling. This is a simple factor of geography (particularly accessibility to the M1 motorway) and recognition of the greater status and advantages that these two authorities enjoy in keeping and attracting big employers.

5. The planned losses for Broxtowe, Gedling and Nottingham are shown in Table B1 in Appendix B to the Employment Background Paper, June 2012. These are disproportionately weighted against Nottingham, with 192.2 hectares against 9.4 hectares for Broxtowe and a mere 5.3 hectares for Gedling. This flows through to the net industrial warehouse land requirement of -18.0 hectares for Broxtowe, -12.1 hectares for Gedling and 87.9 hectares for Nottingham.

6. Finally, the distribution of industrial warehouse land does not reflect the projected share of housing growth as set out in Table A.1 in Appendix A of the Employment Background Paper, June 2012. Nottingham is set to absorb 34% of Greater Nottingham housing growth, compared to 12% for Broxtowe and 15% for Gedling.

ST MODWEN – Aligned Core Strategy Examination MATTER 4 STATEMENT Page 2

7. If this other evidence was taken into account, then the natural course would

be to inflate the provision of industrial and warehouse land for Nottingham and reduce the provisions for both Broxtowe and Gedling. Alternatively, given the relatively small levels of provision for each authority, it suggests strongly that significantly greater planned losses of existing industrial warehouse land in both Broxtowe and Gedling, but particularly the latter, could be tolerated than the 9.4 hectares and 5.3 hectares identified respectively, without impacting upon the economic objectives of the Core Strategy. In addition, this could have possible beneficial repercussions in other policy areas, such as the provision of housing and the protection of the Green Belt.

Q.7 and 8 Is the ACS consistent with paragraph 22 of the NPPF, on avoiding protecting sites allocated for employment use with no reasonable prospect of use, and regularly reviewing land allocations? Do Policy 4 and paragraph 3.4.19 require clarification and more precision? Should criteria be added to indicate what is good employment land e.g. well located for access to the motorway? Is there some inconsistency between Broxtowe and Gedling Councils implicit in paragraphs 3.2.21 & 25, in that the first will only protect viable sites and the second will protect sites in general?

8. Paragraph 22 of the NPPF, in seeking to avoid the long term protection of

sites where there is no reasonable prospect of that land being used or redeveloped for that purpose, refers to applications for alternative uses being treated on their merits having regard to market signals and their relative need. These two factors, and what they mean in terms of the release of existing employment land, should be brought more to the fore in Paragraph 3.4.19 to provide greater clarity and certainty on what circumstances the release of existing industrial or warehouse land for alternative uses would be acceptable.

9. A statement from Jones Lang Lasalle, respected industrial agents with offices in both Birmingham and Nottingham, is attached at Appendix 1. This sets out the key criteria in market terms for judging the value of an industrial warehouse site. In addition, it appraises Bestwood Business Park (see below in respect of response to Questions 9 and 11). The key market criteria identified by Jones Lang LaSalle are as follows:- Location, with particular reference to linkage to the national motorway and

trunk road network.

Situation, with particular reference to road access and connectivity to other business areas and associated facilities.

Siting, with particular reference to adjoining uses, compatible or otherwise

(e.g. residential).

Site configuration, such as circulation, yard space and parking.

Condition and age of premises.

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Marketability, judged by vacancy, lease terms, and nature of occupiers.

Feasibility and viability for development of land or redevelopment of existing premises, taking into account the above criteria and other factors such as site constraints and abnormal costs.

10. Other factors that may be relevant include the current scale of employment on site and the incidence of complaints from residents on the basis of noise, odour or other environmental impacts, if the site is located within a predominantly residential area.

11. Reference to these factors, as criteria, would provide greater clarity and precision in determining applications and reviewing land allocations. In addition, reference should also be had to the relative need for employment land to serve the respective local planning authority areas. As seen above, in the response to Question 3, this differs significantly between Nottingham, Broxtowe and Gedling.

12. Finally, the inconsistency between Broxtowe and Gedling, implicit in Paragraph 3.2.21 and 25 should be squared. Instead, both local planning authorities should take the same broad approach based on the criteria identified above.

Q.9 Have the Councils under-estimated the scope for additional housing sites by not re-assessing some poorly located employment sites such as Bestwood Business Park? Should Nottingham Business Park, with difficulties in attracting occupiers, be considered for more mixed use with some housing development?

(N.B – This also has relevance to question 11 – relating to better located employment sites)

13. Yes. The Councils have under-estimated the scope for additional housing in

respect of poorly located employment sites, with specific reference to Bestwood Business Park.

14. The Bestwood Business Park was formerly a British Coal workshop site, approximately half of which was allocated for housing in the 2005 Gedling Borough Local Plan (BD/GBC/01) and planning permission subsequently granted 175 dwellings, with the site now built out. The remaining half of the site is ‘protected for employment use’ by virtue of Local Plan Policy E3. The site is described in paragraph 4.12 of the Local Plan, which indicates the E3 half of the site should be retained to ensure the employment land availability is in tune with the needs of the market. However, the text at Local Plan paragraph 4.12 also acknowledges the poor location accommodation of the site: “However, this site has to compete with more attractive industrial locations closer to the M1 Motorway that have purpose built industrial accommodation and site layouts, and operations less constrained by nearby residential property.”

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15. St Modwen (the site owner) has promoted the site through the 2012 and 2013 SHLAA and a copy of its latest 2013 SHLAA submission (site 6/20) is included in Appendix 2. As indicated in the SHLAA submission the Council has indicated the site should be retained for employment uses and may require access from Moor Lane. Consequently the Council’s SHLAA response states the site is ‘not deliverable or developable’ and the site has subsequently not been included in the latest 2013 SHLAA (CD/BACK/16).

16. The Council’s concerns over the site are mislaid. The SHLAA submission in Appendix 2, addresses these concerns. It highlights the suitability of the access (using the Highway Authority’s own standards) and its proximity to public transport provision. Importantly, the submission addresses the NCRELS Report (CD/KEY/05) (Appendix 3) which the Council relies on to justify the site’s retention for employment purposes and states the site has an average market appeal, has a limited access, has buildings of average quality many of which are showing their age with the site being constrained by virtue of adjoining residential development. Overall it indicates that confidence for demand for commercial use of the business park was rapidly diminishing. Despite this assessment, for reasons that are not clear, it recommended retention of Bestwood Business Park for employment.

17. To further demonstrate the suitability of the site, specific issues within the JLL statement at Appendix 1 demonstrate the following:

The business park is in a tertiary location and does not compete with the existing stock and new sites in the area (such as Top Wighay Farm and the Rolls Royce site in Hucknall) that enjoy much better access to the M1 motorway.

The B683 that provides the only access to Bestwood is not designed for large commercial vehicles. It is narrow in places, with speed bumps and with no constraints on roadside parking. In addition, the village environment of Bestwood is not well suited for heavy commercial traffic.

The proximity of existing housing acts as a further constraint, as

demonstrated through the Council’s refusal of a planning application (2006/0393) in 2006 for a change of use from B8 to B2 for the main central building on the site (See site plan at Appendix 4) due to the Council’s sole concern that B2 uses would be incompatible with nearby residential properties.

The configuration of the units is poor with very little demarcation in terms of

parking, yard space and circulation. The buildings are not purpose built for industrial and warehouse purposes. They were used originally by the Coal Board for steelworks when the mine was operational and during the plan period will have passed their useful economic life.

18. The estate has only survived as a viable business park through strong asset management and support by St Modwen, the owners of the estate. However, the stage has been reached where the costs of keeping the buildings let has outstripped the returns in terms of rent received. It has become increasingly difficult to keep and attract tenants, even on generous terms. The largest tenant, Corus, has given notice to quit. The remaining tenants undertake low

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value operations such as the storage of scaffolding, car repairs, paper shredding and document storage.

19. Despite constant marketing over the last few years, the job density is very low, with currently less than 60 people on site. This is in comparison with a similar sized 6 ha site located in a market preferable location, which based on English Partnership job density guidelines for general industrial and warehousing would be expected to generate between 705 and 480 jobs respectively.

20. It is clear that the Councils have underestimated the scope for additional housing, with particular reference to this site which is capable of delivering approximately 200 dwellings. The Council’s response to this issue is that all such site specific matters can be dealt with through the Site Allocations DPD. This has recently manifest itself in the Site Allocations Issues and Options consultation DPD (BD/GBC/11) October 2013 which has proposed possible development sites in the Green Belt to the north and north east of the village, with no indication of Bestwood Business Park being suitable.

21. There is therefore a clear strategic link and the ACS not only limits housing development to 500 dwellings in one the Borough’s three Key Settlements it also favours Green Belt releases in advance of a suitable, available and achievable site located within the urban area of Bestwood.

22. Given the suitability of the site, as set out in St Modwen’s submissions to Matters 2 and 3 evidence and justification therefore exists for the ACS to increase the level of housing provision at Bestwood by some 200 dwellings and to provide a much clearer policy framework which favours the delivery of housing on suitable non-Green Belt sites, in advance of Green Belt releases.

APPENDIX 1

EMPLOYMENT STATEMENT JONES LANG LASALLE

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GREATER NOTTINGHAM ACS - EMPLOYMENT PROVISION Appraisal of Market Issues 1. This short paper identifies the principal criteria by which occupiers, investors and developers

judge or grade premises or sites for industrial and warehouse use/redevelopment. It then appraises Bestwood Business Park against these criteria.

Market Criteria 2. The key market criteria are as follows:-

Location Situation Siting Site configuration and constraints Condition and age of premises.

3. Location is a key driver and governs most decisions made by occupiers in taking space. The

principal factors are proximity to the major markets, labour force and the communications network. The latter is particularly important, with specific reference to linkage to the national motorway and trunk road network.

4. The situation of a site is a related function to location, albeit it takes into account a much smaller

geographical area. The key requirement is accessibility; specifically, how a site is connected to the principal road network of its location. In addition, the general environment of a site is important. Key factors include approaches to a site, a critical mass of employers, and the availability of related or ancillary supporting facilities.

5. Siting concerns the direct environment to the site. Normally, the key references are neighbouring

uses, particularly those that may be affected by normal industrial process such as 24/7 operations and the delivery and despatch of goods by large commercial vehicles.

6. The configuration of a site is important for reasons of efficiency, health and safety, and security.

Operators look for sufficient and clearly marked parking areas, decent yard space and unconstrained circulation.

7. The condition and age of premises are vital factors. Industrial operators are under increasing

pressure in terms of productivity. To compete, operators require simple clear space with sufficient roof space. The increasing regulatory requirements for energy efficiency and the cost of energy are an added factor. Finally, operators increasingly require modern premises to impress customers.

8. In support of the above approach it is noted that the ACS supporting background evidence in the

form of the NCRELS 2007 report (CD/KEY/05) prepared by Roger Tyms sets out ‘market appeal’ factors on pages 58 to 59, with specific reference to the following factors:

Accessibility to road Accessibility by public transport External environment Internal Environment Local market conditions.

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Bestwood Business Park 9. Bestwood Business Park is in a tertiary location. In particular, it suffers in comparison to other

established business parks and industrial areas that enjoy much better road access to the M1 Motorway, the Region’s principal markets and labour force.

10. For industry and warehousing, we are marketing a number of buildings and sites in this part of

Nottingham that are much better related to Junctions 26 and 27 of the M1 Motorway and the strategic road network. This includes premises in Blenheim Business Park in Bulwell and the Rolls Royce and Top Wighay Farm sites in Hucknall. All offer a much better pitch than Bestwood.

11. Bestwood is not an established industrial location. Instead, its existence is purely a legacy of the

former Bestwood Pit. 12. It situation is compromised particularly by poor road access for large commercial vehicles. The

B683 provides the only access to Bestwood. This road is not designed for large commercial vehicles, as it is narrow in places, has speed bumps and there are no constraints on roadside parking. The village environment of Bestwood is not well suited for large commercial vehicles.

13. The Bestwood Business Park is a solus site and is not well related to other established industrial

areas. As such, it does not enjoy the benefit of much larger industrial estates and business parks in terms of clustering and the provision of facilities (e.g. on-site catering).

14. Bestwood Business Park is sited within a predominately residential environment. This position

was exacerbated in 2006 when half the site was developed for housing. This event, in much better market conditions for industrial property, illustrates the general weakness of Bestwood as a location for business. If it was a good location then this area would have been developed for industrial rather than residential property.

15. The proximity of existing housing acts as a further constraint. This has been demonstrated by the

Council’s refusal in 2006 for a change of use planning application from B8 to B2 for the main central buildings on the site. This refusal was due to the Council’s concern that B2 uses were compatible with nearby residential properties.

16. The site configuration of the Business Park is poor. The site is densely developed and there is

insufficient parking, circulation and yard space. 17. Due to the site’s historic use, it is likely that the ground conditions will be poor, with possible

contamination. This will require a degree of remediation that will add to the cost of redevelopment for industrial purposes.

18. The buildings were not purpose built for industrial and warehouse purposes. Instead, they were

use originally by the Coal Board for steel works when the Pit was still operational. The estate is well managed by St Modwen. However, the buildings are showing their age and their condition is deteriorating. They require constant maintenance and management. The buildings are close to passing their useful economic life and can be supported only by increasing expense in terms of repair and refurbishment.

19. The weakness of Bestwood Business Park as a pitch for industry and warehousing is illustrated

by the nature of the occupiers, the increasing level of vacancy, and the lease terms. Many of the tenants undertake low value operations. This includes the storage of scaffolding, car mechanics,

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paper shredding and document storage. The park does not appear to be active or busy and has a very low job density (c.60 employees on site).

20. The biggest tenant, Corus, has recently vacated the premises. Until recently, occupancy levels

have been sustained by strong management and attractive lease terms. This includes cheap rents, between £1.20 and £2.50 per sq.ft, short leases and numerous tenant options to break. Despite these incentives, the overall level of occupancy vacancy is approximately 40%. This is very high and compares with an overall occupancy vacancy level across the whole St Modwen industrial portfolio of 11%.

21. In our view, it would not be possible to sustain this estate on this basis. Instead, the costs of

managing the estate, including repair and refurbishment, have begun to outstrip the returns. As such, the future of the Business Park in its existing state is limited.

22. In addition, we consider the prospects for redevelopment for industrial warehouse use are also

very poor. This is due to the limitations of the site in terms of the key criteria of location, situation and siting. Essentially, these factors will mitigate against achieving a rent that will be sufficiently high enough to make redevelopment feasible or viable.

PJL Jones Lang LaSalle 18 September 2013 ���

APPENDIX 2

2013 SHLAA SUBMISSION

APPENDIX 3

NCRELS Report (Extracts)

APPENDIX 4

SITE PLAN & DECISION NOTICE – PLANNING APPLICATION 2006/0393