Economic slump blamed for bid to cut affordable homes target

A formal bid has been submitted to York Council to reduce the number of affordable properties on the former Terry’s chocolate factory, which lies next to the city’s famous racecourse and is one of the region’s biggest re-development projects.

GHT Developments LLP, which includes the York-based company Grantside Ltd behind the project, has applied to cut the amount of affordable properties agreed under the so-called section 106 agreement from 30 per cent to 25 per cent of nearly 300 homes proposed in the £200m development.

Grantside bought the sprawling 27-acre site for £26m in April 2006, but the decision was taken in March to put the estate back on the market.

Senior politicians at York Council have admitted they are now having to look at revising the number of affordable houses on key development sites throughout the city as developers claim house-building schemes which have been agreed are no longer viable due to the ongoing economic slump.

The problems have been compounded by uncertainty over the council’s own planning policies, with a development blueprint spanning the next two decades being dramatically revised. A Government planning inspector raised concerns over the potential soundness of the Local Development Framework’s core strategy, which led to the council withdrawing the original document in May.

The council’s cabinet member for planning, transport and sustainability, Coun Dave Merrett, admitted the attempt to revise the affordable housing targets for the Terry’s factory site is part of a growing trend as developers try to alter existing planning conditions.

He said: “We are being flexible with the section 106 requirements on this and other sites, recognising the changed economic position and site value since the original planning permission. It’s important both for York’s economy, the construction industry, local building workers and suppliers, and for those in housing need to bring sites forward for development as soon as possible. However, the decision itself is that of the council’s planning committee, who will take the whole of the application into account in reaching its decision.”

Speculation has been mounting over the future of the site after the world-famous chocolate factory – which used to make All Gold and Chocolate Oranges – closed in 2005 when US parent company Kraft transferred production to Europe with the loss of more than 300 jobs.

After buying the site the following year, Grantside has repeatedly stressed its commitment to driving forward the regeneration. Planning permission was secured in February 2010 after an initial application had been refused two years earlier due to concerns about traffic volumes and whether there was an adequate infrastructure to cope with the scale of the proposed development.

Work began in March this year on a six-month scheme to prepare the factory site for the actual regeneration to start. But the estate was put back on the market less than three weeks later.

The long-awaited re-development is expected to create more than 2,700 jobs and will include 200,000 square feet of offices and a total of 271 homes. A 150-bed hotel is also planned along with a medical centre and a 60-bed care home.

York Council’s planning committee is due to meet on Thursday next week to discuss the application to revise the affordable housing targets. Despite repeated phone calls from the Yorkshire Post, no-one from Grantside was available for comment.