Employment Land Retention Supplementary Planning Document
3. Policy Criteria to Assess Planning Applications
3.1 The Council will assess all applications for the redevelopment of employment sites on their individual merits. However, the Council’s starting point will be to retain all employment sites that are considered suitable, in land use terms, for continued employment use. Consideration will only be given to alternative uses where an applicant can clearly demonstrate there is no demand for the site and that it is unviable to retain in employment use. This includes taking into account the potential to refurbish existing premises or the redevelopment of the site for new employment uses.
3.2 Subject to proposals meeting other policy and planning requirements, Diagram 1 below highlights the approach that the Council will take towards proposals that involve the loss of employment land and premises to other uses.
Continued Employment Land use
3.3 Where an applicant is seeking to demonstrate that an existing employment site is not suitable, in land use terms, for continued employment use, the Council will expect a planning application to be accompanied by a detailed supporting statement that seeks to demonstrate that this is the case.
3.4 In determining the application, the Council will come to a view as to whether the site is suitable for continued employment use taking into account the evidence supplied in the supporting statement. It should be noted that in determining a site’s/premises suitability in land use terms, the Council will take into account the fact that there are considerable differences between employment uses. Although one use may, at present, cause amenity issues, this does not necessarily rule out the ability of the site/premises to accommodate a less disturbing employment use.
3.5 It should also be noted that the sites proximity to existing housing is not a justifiable reason in its own right for land or premises to be deemed unsuitable for employment use. National planning guidance recognises that the characteristics of industry and commerce are evolving continuously, and many businesses can be carried out in residential areas without causing unacceptable disturbance through increased traffic, noise, pollution or other adverse effects (PPG4, Para 14). For example, uses in Class B1 for business and light industry are, by definition, acceptable in residential areas.
3.6 Where consideration is being given to alternative uses of employment land or premises, any such proposals must ensure that the proposed use does not conflict with the character of the surrounding area and other policies and proposals within the Plan, or any other material considerations.
Demand for your site, marketing and evidencing redundancy
3.7 It is important that the potential for all employment uses are considered on the site before planning applications are made for non-employment uses. Where a business is coming to the end of it’s economic life or has ceased trading altogether, the Council will expect the site to have been marketed for both its existing and other employment uses ‘subject to the relevant planning permissions’ in the first instance.
3.8 The applicant will be expected to have undertaken a marketing campaign to determine the demand for the site from business occupiers. Until this has been undertaken, change of use will not be considered. There are two stages to this marketing process which applicants should follow:
- Marketing the re-use of the site;
- Marketing the redevelopment of the site for employment purposes.
3.9 Existing employment land or premises which are currently not in use are not, by definition, genuinely redundant and should be marketed for employment use before they can be considered for an alternative use. A lesser financial return on investment relative to other development or reuse options will not be sufficient to justify the site not continuing to be available for employment use.
3.10 Following any initial enquiries with the council, the first step is to conduct the marketing campaign as set out below. The campaign should be up to date and relevant to the current owner of the property not partially carried out by a previous owner or out of date.
Lack of Market Interest
3.11 The Council expects employment land and premises to be actively marketed for at least 12 months before an application for redevelopment or a change to an alternative use can be considered. It may also be necessary to review the effectiveness and quality of the marketing campaign every 6 months.
3.12 A simple statement, such as "the site has been on our books for 12 months and no interest has been expressed", will not demonstrate genuine redundancy. The Council requires greater detail on which to make a judgment. Typically this will include a breakdown of the marketing strategy which should be prepared by a suitably qualified professional, such as a Chartered Surveyor who is active within, and familiar with, the Hastings employment land market. The marketing strategy should bring the availability of the site to the notice of the local business community, and should include:
- The market price and an indication of this price relative to those prevailing for similar premises in the local market, including details of an independent valuation;
- Any reductions in market price made during the course of marketing;
- The marketed use of the site (The Council will expect employment sites to be marketed in a way that identifies all the options available in retaining the site in employment use. This will include, where appropriate, the potential for refurbishment, redevelopment for new employment uses, sub-division, amalgamation or selective demolition (in order to improve the format, layout and access arrangements);
- Details of the site particulars, which should include the
following information as a minimum:
- Good quality internal and external photographs
- A description of the site/premises
- The current permitted use and potential employment uses, subject to planning permission
- Dimensions of:
- the building,
- internal rooms,
- eaves height and door widths if relevant,
- gross internal area,
- size of the total site including any land.
- Services e.g. electricity, gas, water – any other relevant information
- Asking price (see ‘Price’ section below)
- Any restrictions, conditions and covenants
- Known costs, such as service charges, rateable value
- Any other known items included in sale (note – the price expected for these should be disclosed to the council).
- Terms/conditions associated with the sale & the sites tenure – leasehold, freehold etc (see also ‘Tenure’ section below)
- Extent of site, shown on a site plan
- Site location including map – the map extract should show the property in relation to the road network
- Contact details for viewing and more information
- Any residential element to the property should be removed or subordinate to the commercial particulars
- Parking availability and access/distances to public transport
- A monthly breakdown detailing contact details of interested parties in the property, All expressions of interest/offers received including rental interest, progress and negotiations undertaken including any offers made and reasons for these being rejected. Where possible the applicant should obtain from interested parties reasons/explanations as to why they were not able/ willing to proceed. It is not sufficient evidence to just quote number of viewings and generalise on the feedback.
- Any variations in the marketed use introduced in the course of marketing;
- Where and how often the site was advertised;
- Copies of advertisements placed. The dates and publication should also be noted.
- Types of client advised of its availability with contact details for them;
- Any variations in terms/conditions on which the site is made available;
- Whether the site availability was referred to relevant support agencies: Hastings Borough Council’s Regeneration Team; East Sussex County Council Strategic Economic Development Team; Hastings Area Chamber of Commerce (1066 Enterprise) and Sussex Enterprise.
- The applicant must inform Locate East Sussex (or any successor body) of the sites availability at the start of the marketing campaign, contact: Location Services Manager - 01424 205512.
3.13 The Council reserves the right to contact any party who has expressed an interest and to send details of the land / property to any party which it feels may be interested in purchasing / occupying the premises for occupation, investment or redevelopment purposes.
3.14 In all cases the marketing campaign should satisfy the parameters set above. It is essential that any deviation from the campaign is agreed in writing with the Development Control department from the outset as this ultimately will save time and costs in the future.
3.15 It should be noted that if a ‘non-agreed’ campaign is undertaken or has been undertaken where the council is not satisfied that it is in accordance with what would be expected, it will result in a further period of marketing being requested at the planning application stage or could result in a refusal of permission.
All of the above evidence should be appended to any planning application.
A marketing campaign checklist is attached as Appendix 5.
3.16 It is important the price of the property reflects the current market value of such a property based on its current condition and use status. If the building or site requires extensive conversion/repairs the price should be based on the unconverted state unless the works are to be undertaken prior to completion.
3.17The price should not include any potential residential or other non-employment use value. You should seek a minimum of one independent valuation obtaining both freehold and leasehold prices for the building in its current condition/state. The basis of the lease should be appropriate to the nature of the use of the building.
3.18 It is recommended you obtain an independent valuation of the property, from an established commercial source familiar with the local area and with properties of the type to be marketed. Estate agents usually provide such a valuation service, although other sources may be considered if their credentials can be established. The cost of the independent valuation(s) will be borne by the applicant. This should also be backed by evidence. The valuation(s) should be submitted as part of the evidence accompanying the planning application and the Council may ask for justification of the price.
3.19 You should be prepared to offer the property or site on both a leasehold and freehold basis in order to widen appeal and help ascertain the level of interest. Flexible terms, such as short leases, monthly licences and regular break clauses are encouraged. Again any lease price should take into account the current condition and use of the building.
3.20 Advertisements for the marketing campaign should include:
- An advertisement should be featured at least once a month within the Commercial Section of appropriate newspapers, and at least through regional and local publications. Larger sites (1000m² and above) should also be advertised in national publications. Examples of appropriate newspapers include The Argus, Estates Gazette and Property Week (This list is not exhaustive). There may be some publications which are inappropriate for the advertisement of commercial sites/premises, in all instances it is advised that you seek advice regarding your advertisement intensions from the Council’s Development Control department. In cases where the property is part commercial/part residential, it is not appropriate for an advert to be placed solely in the residential section of the newspaper.
- Trade magazines specific to commercial property or to specific industries may instead be used if more relevant to the industry. The intervals of advertisement would depend on the regularity and circulation of publications.
- Continuous inclusion on the agent’s website, own papers and lists of commercial/business premises;
- The continuous display of a ‘for sale/lease’ board must be displayed onsite on each site frontage to the highway throughout the marketing campaign, unless otherwise agreed.
- Referral to the local business community, including the Hastings Area Chamber of Commerce for consideration of the site’s/premises potential for reuse or redevelopment for employment use.
Redevelopment for Employment Purposes
3.21 The Council expects applicants to provide evidence that they have carefully considered how the site could be redeveloped for employment purposes and that they have marketed it accordingly. A reasoned justification, including the results of marketing, is required as to where an applicant considers that new employment development cannot be achieved on site for reasons of financial viability, applicants are required to address the considerations set-out below.
3.22 Applicants should note that the Council will not lightly make a decision that the marketing strategy is inadequate where applicants have adequately addressed the issues identified in this supplementary planning guidance. However it may secure independent advice on difficult, more complicated sites.
3.23 In instances where the Council considers that the marketing strategy employed has been inadequate the applicant will be advised that the planning application cannot be recommended for approval. The applicant will be given the following options:
- To withdraw the application and further market the site addressing the concerns identified by the Council;
- To withdraw the application and submit the marketing strategy to independent arbitration by a suitably qualified commercial agent agreed by both parties (in the absence of such an agreement to be nominated by the President of the Royal Institute of Chartered Surveyors) with the cost to be borne by the applicant;
- To continue in the knowledge that the application will potentially be refused.
3.24 There may be instances where an applicant can successfully demonstrate that there is no demand for an employment site which is suitable in land use terms but that the site’s buildings are of a state that, without remedial works, they would be unsuitable for continued employment use. In such cases, it is important to recognise that the value offered by such sites does not arise solely from the existing buildings but from the potential the site offers as suitable location for future employment uses. As such, where a site contains buildings that are in a poor state of repair, consideration will be given to the prospect of refurbishing the existing premises or redeveloping the site for new employment uses in order to maintain the employment resource.
3.25 However, it is accepted that even if a site is suitable in land use terms, individual circumstances on the site may mean that its full retention in employment use, following either refurbishment or redevelopment, is not a viable option. If this is the case, applicants will be expected to clearly demonstrate this in a supporting statement accompanying the planning application. The Council will give full consideration to the evidence provided, it may need to take independent advice on the information provided and the applicant will be expected to pay the Council’s expenses for this.
3.26 Nevertheless, although the retention of the site in employment use may not be viable at a particular moment in time, the economics of development may change over time and refurbishment/redevelopment for employment uses could potentially become a viable proposition in the future. In this respect, such sites are still considered to have value as an employment resource.
3.27 There are two stages to establishing that a site is in such a poor condition that it is uneconomic to either refurbish or redevelop it for employment purposes:
- Establish from marketing that prospective occupants are not proceeding with the purchase because of the condition of the premises;
- Establish that the costs involved in refurbishing or redeveloping the site for employment use are greater than the return that could be anticipated.
3.28 The Council is unlikely to concede that the site is in poor condition unless this conclusion can be drawn from site marketing evidence (this evidence must be provided in line with the marketing section of the SPD). In considering marketing evidence the Council will pay particular attention to the market price at which the site has been offered. It will expect the price to reflect the current state of the property.
3.29 The following evidence will be required to demonstrate a case that the costs of refurbishment/redevelopment exceed the likely returns from the site:
- A full structural survey of the existing premises highlighting the matters that require refurbishment or which are incapable of refurbishment. This survey should be prepared by a suitably qualified professional consultant;
- A survey of the site from an operational point of view indicating any exceptional or site specific costs. These costs to be prepared by a suitably qualified professional consultant;
- A detailed cost breakdown of the works required to refurbish/redevelop the site. These costs to be prepared by a suitably qualified professional consultant;
- Written evidence from 3 recognised separate financial institutions of the likely cost of borrowing over a fifteen year period to fund these costs;
- Written evidence from 3 recognised separate financial institutions that they would not be prepared to advance finance for refurbishment/redevelopment, with the applicant to bear any costs involved in obtaining this information; and
- An indication (in the case of a prospective landlord) that the anticipated rate of return from the premises would not cover the costs of refurbishment/redevelopment;
- An indication (in the case of a prospective owner occupier) that the level of income needed to cover both the costs of refurbishment/redevelopment and other necessary overheads would be unsustainable.
3.30 The Council will seek to verify any such information submitted under these criteria. It is recognised that some of this information is of a confidential nature and the Council will take steps to ensure that it is not made publicly available or used for purposes other than those set out in this SPD.
3.31 Where it can be demonstrated that redevelopment for employment purposes alone cannot be achieved on financial grounds, the Council expects applicants to consider:
- Approaching support agencies to see whether additional funding may be available to assist the redevelopment and,
- Preparing alternative schemes which can deliver some employment floorspace on the site.
Consideration for Mixed Use
3.32 There may be instances where a site’s sole use for employment purposes is no longer viable. In such cases the Council will expects applicants to have examined the possibility of developing either mixed use schemes, including live/work units, or other elements including some residential to cross fund development. In such cases, and where this is demonstrated by the Applicant/Agent, the Council will adopt a more flexible approach and, will seek to secure a mix of land uses.
3.33 In assessing such proposals the Council will normally expect, at least, the equivalent amount of employment floorspace to be delivered on site as exists under the present use. Where this cannot be achieved the Council will expect that the other elements of the scheme should be the minimum necessary to support a viable employment development on the site. Applicants will be required to submit a reasoned justification as to why the employment floorspace cannot be replaced in full.
3.34 When determining the proportion of the overall site to be developed for employment uses, the Council will assess the individual merits of each case, but in doing so will take account of the employment resource being lost and the potential level of employment that can be achieved within the mixed use development.
3.35 If a mixed use scheme is pursued, then any planning permission granted, subject to other material considerations and those items detailed in this SPD, will be conditional on the delivery of the employment uses on the site which is linked to the higher value use/s. It will normally be expected that the employment element will be required to be constructed in advance of the higher value uses.
Non B-class uses Development
3.36 Where an applicant has demonstrated the continued use of a site/premises either for solely employment use or a mixed use scheme is not viable, then in accordance with our sequential approach, other employment generating uses not within the ‘B uses’ of the Use Class Order 2005 will be preferred.
3.37 If an applicant/agent considers that residential development is the only viable option, then it should be demonstrated why mixed-use development, including a reasonable proportion of employment floorspace is not feasible on a particular site, including relevant cost information as detailed in the viability section of this SPD. Where this is satisfactorily demonstrated residential development proposals will need to demonstrate that the resulting residential amenity conditions are satisfactory and that there would be no unacceptable impact on the operating conditions of existing and potential businesses allowable at a location by virtue of its potential use classification.
3.38 Any outline approval granted for residential development on an existing employment site will normally be conditioned to ensure that any subsequent reserved matters conform with the agreed approach, whether that be in relation to a mixed use proposal or through the conversion for other employment generating uses.