A legal tussle in Birmingham could determine how much councils can force developers to pay for infrastructure improvements in return for planning permission, reports Public Affairs Correspondent Paul Dale.
Progress on the £700 million regeneration of the former MG Rover works at Longbridge will depend on the result of a short but impassioned planning inquiry.
And to judge by the opening onslaught from lawyers representing landowners St Modwen and planning authority Birmingham City Council, no quarter will be given.
The council is attempting to extract £145,000 from St Modwen towards public transport improvements, in return for granting a change in planning permission to allow a building at the Longbridge Technology Park to be used chiefly as offices instead of industry.
St Modwen insists that the collapse in property values means that the offices are unviable at the moment, and is refusing to make any payment for at least five years.
Council planners point out that obligations to hand over planning gain monies are contained in the Longbridge Area Action Plan, a government-approved document, setting out a formula for assessing an infrastructure tariff and that a minimum payment is necessary from St Modwen.
St Modwen countered by pointing out that the tariff did not exist when the Devon Way building was first given planning permission four years ago and claims that the company has already paid “more than its fair share” toward infrastructure at Longbridge.
Martin Kingston QC, for St Modwen, accused the council of being “inflexible, dogmatic and perverse”.
The planners’ “intransigence” in demanding a minimum tariff payment, he insisted, meant that the completed technology park building will remain empty and up to 200 new jobs will not be created.
Anthony Crean QC, for the council, hit back accusing St Modwen of shedding “crocodile tears” by claiming to support employment at Longbridge when refusal to pay the tariff would threaten the future of the entire development.
He added: “This is a test case for the Longbridge Infrastructure Tariff. If any decision is taken at this inquiry which has the effect of undermining the tariff policy, that would have a severe impact on fulfilling the area action plan.”
Mr Crean said St Modwen was guilty of “utterly unreasonable” behaviour and had acted “imperiously” by rejecting the council’s attempts to strike a compromise over how much infrastructure tariff should be paid, and when.
The company was attempting to get a “free ride” by avoiding its obligations.
St Modwen Properties, worth £402 million according to its last financial results, insists difficult trading conditions means it cannot afford to pay £145,000 towards an upgraded railway station and park and ride until a suite of offices it has built on the 300-acre site returns a 20 per cent profit, the inquiry heard.
The company is appealing against the city council’s refusal to allow the building at the Longbridge Technology Park to be used chiefly as offices.
Mr Crean contrasted St Modwen’s behaviour with Bournville College, a charity, which has agreed to pay the tariff on its new Longbridge headquarters.
He said the council had offered a number of payment opportunities, including an option to pay half the £145,000 once the building is occupied and the remainder six months later. The options were rejected.
He added: “What is at stake in this appeal is the efficacy of the policy requirement that all development should contribute to a fair share of the cost of providing infrastructure, without which there will be no redevelopment, regeneration and renaissance of this most important area.”
Mr Kingston said the city’s attitude was a “tragedy” putting at risk job creation. He claimed the council was wrongly attempting to impose a minimum infrastructure tariff payment, when the Longbridge Area Action Plan did not stipulate any formula for minimum payments. The action plan specifically invited the council to be flexible given the difficult economic backdrop, he added.
The council’s approach was at odds with the action plan and guaranteed to “frustrate much needed employment generation proposals”, Mr Kingston said.
He pointed out that Longbridge landowner regional development agency Advantage West Midlands, which is joining with St Modwen in the appeal, had described as “unhelpful” wide-ranging restrictions imposed by the council on the type of tenants permitted to use the offices.