Below is a report of the original discussion EDDC had in July 2013 about affordable housing on the (then) Tesco site. It should be notec that, though “overage” was discussed and apparently agreed at this meeting, the requirement was subsequently dropped, though no explanation was given for this:
“… Tesco has petitioned for the removal of all the affordable housing on its site to make it more saleable, as it has many problems associated with the infilling of the site which mean that only certain types of houses can be built and fewer of them.
“What I say below is a personal opinion only and reflects my layperson understanding of the debate.
The DMC heard from myself [Sandra Semple] and Paul Arnott: there were no representatives of the town council in attendance. District Councillor Peter Burrows was in attendance earlier in the day as a member of the DMC but left before this item. District Councillor Steph Jones appeared in her capacity as Deputy Portfolio Holder for Housing.
Members of the committee appeared strongly of the view that Tesco was going a step too far. They particularly disliked the comment from the company’s agent that if EDDC did not agree to what they wanted, they would appeal. Some thought this was unacceptable pressure. One member of the committee noted that no affordable housing has been built in Seaton for many, many years and if this reduction was allowed other developers in the town would think they should have the same treatment.
Mr Freeman (I forget what title he has these days) pointed out that there was a mistake in calculations in the documentation (not sure whose fault) and that whereas it had been stated that the company might sustain a loss of over £2 million if affordable housing were included, the real amount on the figures provided was more like £750,000.
It was suggested that this application was a good candidate for EDDC’s new policy of “overage” and here I get a little fuzzy about what they mean – and to be fair so did some of the members of the committee. However, what it appears (to me) to be is that yes, Tesco will be allowed to take out the affordable housing BUT EDDC will put in place an overage clause which says that when the potential loss has been recovered (i.e. after the £750,000 loss has been taken into account – or whatever the correct figure is) then EDDC will take a percentage of the profit thereafter. This means, as I understand it, that, say, Tesco sells the site for £5 million, then they ignore the first £750,000 and the remaining profit is then split between EDDC and Tesco. The EDDC lawyer in attendance could not remember what the percentages agreed were but I have looked it up and the default allowed in the new policy is 50% each but EDDC has the option to increase this percentage if it sees paperwork which shows that the profit could be extremely high.
This only applies to the current planning application. If the site is still vacant when the current planning application runs out then everything has to be renegotiated including the S106 agreements and percentage of affordable housing.
Throughout the afternoon several members of the committee (perhaps with an eye to the next election) said that the economic climate was improving and that this meant that Tesco has less to worry about.