PROPERTY JOURNAL

Public sector ventures in development

Joint ventures are one way that local authorities in East Anglia are building the homes and other developments their areas need

Author: Richard Gawthorpe

12 October 2019

For local authorities under pressure to transform the land and assets they own into much-needed housing, joint venture development companies that comply with the judgment in Teckal Srl v Comune di Viano and Azienda Gas-Acqua Consorziale (AGAC) di Reggio Emilia C-107/98 [1999] ECR I-8121 are increasingly attractive.

Such public-to-public companies are usually exempt from Public Contracts Regulations 2015, and need not take the traditional, resource-intensive procurement process. This means regeneration projects can be carried out speedily with a single supplier of professional and development management services, without the time or cost of procuring a development partner.

In Suffolk, two such partnerships were formed in March with the Norse Group, a company entirely owned by Norfolk County Council, to bring back into use 2 disused council headquarters formerly occupied by Babergh District Council and Mid Suffolk District Council.

In the latter district, work on supplying almost 100 homes and a new retail unit is due to begin in February through a company known as Mid Suffolk Growth. This work includes sensitive refurbishment of the grade II listed part of the council offices fronting the High Street in Needham Market, with the project due to be complete by November 2022. A separate company, Babergh Growth, has also been established between Norse and Babergh District Council to provide 57 homes on a site that is predominantly grade II and grade II* listed, overlooking the river and cricket ground in Hadleigh.

Successful partnerships

The interests of local people are protected by regular board meetings on which senior elected members and council officers are represented. By taking this approach, local authorities know they are entering into partnership with a company that has a strong public service ethos.

A similar Norse Group partnership in Norfolk, Broadland Growth, has already developed high-quality private and social housing and won a number of national awards including RIBA and Passivhaus.

Although the initial focus of the Mid Suffolk and Babergh projects will be on the 2 disused council buildings, each will seek to enable further development, and there have already been talks about providing a visitors centre for one of the councils. A main contractor will either be procured through established frameworks, compliant with Official Journal of the European Union rules, or via the Norse Group or relevant council procurement team. Both joint ventures are now active and set to benefit local and regional economies, meeting the environmental and housing needs of people in Suffolk.

Strategic director for Babergh and Mid Suffolk District Councils Jonathan Stephenson says: "All councils have a responsibility to invest in housing to meet the growing needs of local people. Our partnerships with Norse will provide what's required while allowing effective governance. The 2 partnerships will see council-owned land and assets given a new lease of life. The development vehicle is working to make a positive contribution to the economic, environmental and housing needs of our communities."

Richard Gawthorpe is a group director of Norse Group  richard.gawthorpe@norsegroup.co.uk

Related competencies include: Asset management, Strategic real estate consultancy

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