Developer offers council extra £2m for affordable housing

Sheppard Robson’s development on the former Middlesex Hospital site in Fitzrovia London, thought to be worth up to £750m, has received conditional planning permission after the developer offered an extra £2m to the council’s affordable housing fund.

The future of the scheme, which is also designed by architect Lifschutz Davidson Sandilands, had been in doubt last week, after Westminster council deemed that the developer Exemplar Properties designation of just 54 of the 291 homes - or 17.4% of the total residential floor space in the scheme - as affordable was “unacceptable”.

The council insists that 25% of homes on new developments are affordable. The developer had offered to pay £2.09m in the council’s affordable housing, but the council had insisted that this was not enough and should be increased to £6.1m.

But last night the council’s planning and city development committee voted unanimously to give the scheme conditional planning permission after the developer offered a further £2m towards the council’s affordable housing fund.

Councillor Alastair Moss, chair of the committee, told Building that the proportion of affordable housing on site would remain the same but the contribution to the affordable housing fund had risen to “nearly £4m”, which the committee had accepted.

Moss added that the developer had also increased its contribution to the cost of repairing and restoring the grade II-listed Victorian chapel, which is preserved within the plans, from a proposed £50,000 to £300,000, as had been asked by the council.

Building understands the developer has drawn up a shortlist of contractors for the job that includes Balfour Beatty, Mace and Sir Robert McAlpine.

The site is one of the largest in central London and was once part-owned by the Candy Brothers, who dubbed the development ‘NoHo Square’ after a property development in New York City.

Development halted after planners rejected the scheme and Kaupthing went into administration, after which the Candys swapped their 33%stake for a stake in a Beverly Hills development also owned by the Iceland bank.

Architect Sheppard Robson was chosen to design the smaller development, which also includes shops, a school and a medical centre.

Kaupthing and minority investors Aviva and Exemplar dropped the much-maligned ‘NoHo’ name, which was derided by residents around the site in Fitzrovia.

Councillor Moss said he hoped the project would not move ahead quickly. “I hope they will get it on with it. It is the right scheme for the site and we want to see it developed,” he said.