Issue details

19/05/2014 – DECISION WITHDRAWN (Also 13/00032 and 13/00036)

REASON: Initial applications for Growing Places Fund were submitted for this project and projects at Sturry Road, Canterbury and The Base, Dartford but it has been determined on further investigation and appraisal that the projects either do not require GPF funding in order to proceed or that the risk for KCC was not proportionate to the benefits sought from the proposals.

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A decision is required such that, subject to due diligence, Kent County Council shall agree to enter into credit agreements to secure investment from the Growing Places Fund to deliver improvements to Southfleet Road. This will help to unlock development at Eastern Quarry and provide access to the commercial development area at Station Quarter North. 

Background

Growing Places Fund (GPF) is a Government scheme which provides loan finance to unlock development sites where these will create new jobs and homes. In the South East, the Fund is administered by the South East Local Enterprise Partnership (LEP), for which Essex County Council acts as the accountable body.

Following a call for projects and appraisal, the LEP has given indicative approval to allocate up to £4 million to bring forward improvements to Southfleet Road.

In order to secure this funding, it is proposed that KCC will enter into:

a)    A credit agreement with Essex County Council to draw down the GPF funding; and

b)    A subsidiary credit agreement with Land Securities Eastern Quarry Ltd, who will deliver the scheme.

This shall be subject to final due diligence. 

This Decision contributes to delivery of the following Delivering Bold Steps priorities:

·         Priority 8: Respond to key regeneration challenges, working with our partners. This specifically prioritises actions to unlock key sites, where these will lead to jobs and housing

·         Priority 9: Support new housing growth that is affordable, sustainable and with the appropriate infrastructure

Impact/costs and risks of proposed decision

Impact

The proposed Decision will mean that KCC will be able to draw down Growing Places Fund investment of up to £4 million. It is anticipated that this will unlock 1,500 homes at Eastern Quarry by 2020, and will also support the development of the Station Quarter North strategic employment site.

Risks

GPF funding is repayable. The primary risk is that KCC will be liable to repay the GPF loan to the Accountable Body, even if the private sector organisation is unable to repay the subordinate loan to KCC. This will be mitigated through due diligence, the robust drafting of the credit agreements, and project monitoring.

State Aid risks will be mitigated through the charging of an appropriate rate of interest, with all repayments (less costs to KCC) repaid to the GPF fund.

Costs

There will be some costs to KCC in managing the credit agreement. These will be recovered through interest payments and/ or through recharges to the central GPF fund, with costs and recovery mechanisms considered in development of the credit agreement.