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NETWORK
VILLAGE COMMENCEMENT
BUSINESS PLAN
A joint venture between
CREATING SUSTAINABLE MIXED-USE COMMUNITY DEVELOPMENTS
FOREWORD BY JOHN WALKER IN 1997 THE COALFIELDS TASK FORCE WAS SET UP BY THE DEPUTY PRIME MINISTER JOHN PRESCOTT MP TO DEVELOP A PROGRAMME OF ACTION TO ASSIST COALFIELD COMMUNITIES. Many towns and villages were suffering from falling populations and lack of jobs, high levels of crime and problems with long-term illness. As part of the National Coalfields Programme, which reached its eleventh year in March 2008, English Partnerships in 1999 established Network Space Ltd, a joint venture company with Langtree Group plc, to address the shortage of good quality small business premises in the coalfield areas. The joint venture company has far exceeded expectations and its initial target of 500,000 sq ft, and has now delivered over 700,000 sq ft of employment floor space. The latest initiative, Network Village, is set to deliver a further 300,000 sq ft of business space that will take us past the one million square feet milestone. This will be achieved within a 7 year timeframe through the development of 6 sustainable mixed use schemes where the additional funding required for the delivery of the business space will be funded by residential development. Successful, sustainable and cohesive communities require not only good housing, but also an attractive environment and a thriving economy. Network Village will deliver mixed-use development where the provision of high quality business premises will be at the forefront and carefully integrated into the existing community alongside exemplar, energy-efficient housing and attractive parks and open space.
Network Space will consult with local communities and work closely with key stakeholders and local authorities to prepare detailed masterplans for the Network Village proposals. Thriving business centres will act as a catalyst to enable local businesses to grow, attract inward investment and generate better job opportunities. The benefits of well-designed, good quality mixed-use development create more cohesive communities and better places to live, reducing crime and anti-social behaviour. We need to ensure that we continue to achieve sustained regeneration of coalfield communities and mixed-use redevelopment. The provision of attractive business premises is key to the delivery of long-term benefits and the creation of economically and socially sustainable communities. English Partnerships has an on-going commitment to the coalfield communities and we see Network Villages as an important initiative to the plans for the new Homes and Communities Agency.
John Walker Chief Executive, English Partnerships
EXECUTIVE SUMMARY NETWORK VILLAGE A NEW APPROACH TO SUSTAINABLE SPACE Network Village is a bold programme to deliver vibrant, exemplar and sustainable employment led mixed-use developments in the former English Coalfield areas. The primary objective is the delivery of high quality business space providing attractive accommodation for small and medium size business and increasing the availability of wider and better local employment opportunities. This will be developed alongside a range of high quality housing including affordable housing, to provide cross subsidy where necessary, all carefully integrated into existing communities.
INTEGRATION OF NEW BUILD USES AND CROSS-SUBSIDY The Network Village concept is entirely consistent with the Government’s intentions for the delivery of urban renaissance and the creation of sustainable communities. Network Village is about sustainable economic diversification and high quality job creation in former coalfield communities. Its aim is to provide high quality employment space that will retain and attract higher quality companies and encourage and support local start up ventures. The development of of high quality housing will fund the delivery of the employment space where cross subsidy is necessary and also create a truly sustainable mixed-use addition to the existing community. The developments will deliver fully integrated, sustainable mixed-use employment and residential schemes which will include high quality managed business centres offering Grade A quality serviced office accommodation; flexible high quality workspace units designed for a mixed use environment; self contained offices; high quality housing providing a mix of housing choice and tenure; and attractive open space designed to provide opportunities for community use and residential amenity.
PAGE 04/05 EXECUTIVE SUMMARY
WHO AND WHAT IS NETWORK SPACE?
THE CORE BUSINESS MODEL
Network Space Limited is a joint venture between English Partnerships and Langtree Group plc set up in 1999 with a specific remit to deliver high quality employment space in the former English Coalfields regions. Langtree provides both development and management services. Langtree is a developer that specialises in mixed-use regeneration and the development of high quality employment spaces suitable for SMEs in regeneration areas. Network space has now delivered over 700,000 sq ft of workspace, offices and serviced offices. Network Village is the next phase of Network Space development and the target is to secure the delivery of 300,000 sq ft of employment space through the development of six Network Villages within a seven-year time frame. Network Space is primarily a commercial developer and therefore the delivery of the high quality employment accommodation will be at the forefront of each scheme.
The business plan sets out a generic Network Village scheme (based upon the Murton pilot) in order to develop the financial model and demonstrate the size of site required to fund the delivery of the network village concept. Sensitivity analysis has been carried out on key variables including residual land price, residential values, and remediation costs.
SCOPE AND RANGE OF THE NETWORK VILLAGE CONCEPT The regeneration benefits of the Network Village proposals include re-use of brownfield sites in sustainable locations with a strong employment led justification. This coupled with the commitment to deliver high quality development provides a cogent regeneration case. The areas of operation cover the former English Coalfields regions. The first site has been identified at Murton, Easington and the business plan proposes the identification of a further five sites over the next three years. The initial site search programme will focus on the North East, Yorkshire and East Midlands. It is anticipated that identification of sites will be through direct contact with senior executives and decision makers involved in regeneration and a programme of presentations and meetings with English Partnerships, RDAs and local authorities has been prepared.
It is anticipated that Network Space will enter into development agreements with landowners for the delivery of the proposed Network Village schemes. Community participation is one of the key objectives in the Government’s reform of the planning system. Network Space will undertake pre-application discussions at an early stage with the local authority, community groups and local stakeholders. The company recognises the importance of maintaining ongoing engagement as proposals are developed and this will be achieved through public exhibitions and inviting feedback and comments from local people. The intention is to secure the fullest possible local community support for the Network Village proposals. The offices and workspace will be developed to BRE Environmental Assessment Method (BREEAM) standard of Excellent. Network Space has already achieved the Excellent rating for the developments at Allerton Bywater Millennium Community and i2 in Mansfield. The housing will aim to achieve current English Partnerships standards including Code for Sustainable Homes Level 4 and will be developed in accordance with a strict design code prepared by Network Space.
The business space will be maintained and managed by Network Space and the accommodation will be available to let on flexible lease terms. The residential land will be prepared for development and marketed for sale on an unconditional basis with the benefit of outline planning permission to attract experienced house builders. The parks and open space within the Network Village developments are assets of the local community and therefore long term ownership and stewardship of the open space will be carefully considered in each case. This may be through adoption by the local authority or transfer to another body such as the Land Restoration Trust or local community trust.
FUNDING This business plan has been prepared for the period to June 2015. The delivery of Network Villages will be funded by increased bank facilities from the current level of £27m up to £50m. The increase can be provided with a Loan to Value ratio below 55% and with minimum interest cover of 1.5%. The net assets are projected to grow in the period from £18m to £29m.
MARKETING & PR A marketing and PR action plan has been prepared to raise the profile of Network Space at both regional and national levels in order to promote the Network Village proposals.
CONCLUSION Network Village will continue to deliver the regeneration of Coalfield communities through mixed-use development. The provision of attractive quality business premises will lead to the creation of economically and socially sustainable communities.
CONTENTS 08
1. 1.1 1.2 1.3
Introduction Background to Network Space Network Village Strategy
10
2. 2.1 2.2 2.3 2.4
Network Village Elements Employment Residential Open Space Retail, Commercial and Leisure
12
3.
Sustainability
14
4. 4.1 4.2
Areas of Operation Coalfield Areas Suitable locations
16
5. 5.1 5.2
Network Village Model Generic scheme Appraisal
18
6. 6.1 6.2 6.3
Site Identification Process Site finding proposals Site delivery programme Initial Site Assessment
20
7.
Financial Commentary
22
8. 8.1 8.2
Development Development Agreement Planning 8.2.1 Policy Exit strategy 8.3.1 Employment 8.3.2 Residential 8.3.3 Open Space 8.3.4 Retail, Commercial and Leisure
8.3
24
9. 9.1 9.2 9.3
PAGE 06/07 CONTENTS
Community Engagement and Socio-Economic Impacts Consultation Planning process Economic and social impact
26
10. 10.1 10.2
10.3
Marketing and PR Introduction Aims and Objectives 10.2.1 Target Audience 10.2.2 SMART Objectives Communications Tactics 10.3.1 Direct Marketing 10.3.2 Advertising 10.3.3 Events 10.3.4 Public Relations 10.3.5 Advertorials 10.3.6 Literature 10.3.7 E-marketing 10.3.8 Budget and Timing
30
11. 11.1 11.2 11.3
Risk Assessment and Management Governance Acquisition Construction
32
12. 12.1
Monitoring and Evaluation Performance Management Framework 12.1.1 Introduction 12.1.2 Monitoring 12.1.3 Scheme Monitoring Evaluation 12.2.1 Overview 12.2.2 Interim Evaluation 12.2.3 Full Evaluation
12.2
34
13.
Way Forward
1. INTRODUCTION 1.1
BACKGROUND
Network Space Ltd is a joint venture company, between Langtree Group plc and English Partnerships, launched in October 1999 by the Deputy Prime Minister the Rt Hon John Prescott MP. Its remit is to develop high quality employment space in the former English Coalfields, providing quality employment accommodation suitable for new and expanding small and medium-size enterprises (SMEs). The initial remit to deliver a minimum of 500,000 sq ft (46,450 sq m) was achieved within the 6 year target time frame and as a result of this success, the joint venture partners extended the programme to deliver 5 more schemes providing an additional 200,000 sq ft (18,580 sq m), without further funding support from English Partnerships. The networkcentre product has evolved, as the company responds to market needs, to provide a range of workspace, offices and serviced offices. Network Space has now entered a further phase of development, through a new initiative named Network Villages, to deliver a minimum of 300,000 sq ft (27,870 sq m) of high quality business centres, offices and workspace accommodation in the former coalfield areas over the next 7 years – integrated with and funded by sustainable high quality residential development.
300,000
SQ FT OF HIGH QUALITY BUSINESS SPACE
PAGE 08/09 INTRODUCTION
1.2
NETWORK VILLAGES
The primary objective of Network Village is the delivery of high quality business space providing attractive accommodation suitable for SMEs thereby increasing the availability of wider and better local employment opportunities – generating sustainable economic diversification and high quality job creation in former coalfield areas. Developed alongside high quality housing and carefully integrated into existing communities, the development of the housing will cross subsidise the delivery of the speculative high quality employment space and also deliver truly sustainable mixed-use regeneration. English Partnerships is at the forefront of the Government’s response to climate change and the Network Villages programme is entirely consistent with the Government’s intention for the delivery of urban renaissance and the creation of sustainable communities. It accords with the Green Paper (July 2007) ‘Homes for the future: more affordable, more sustainable’ which sets out proposals for more homes that are well designed, greener and more affordable to rent or buy. Network Village as part of the National Coalfields Programme, will deliver further benefits to coalfield communities through brownfield regeneration and the provision of high quality housing and business space. The new Homes and Communities Agency proposed in the Housing and Regeneration Bill, will have responsibility for land and funding to deliver new greener and more affordable homes and infrastructure through sustainable development. (The definition of infrastructure includes services; roads and transport facilities; retail and other business facilities; health, educational, employment and training facilities; and public open space).
1.3
STRATEGY
Network Villages are about the delivery of high quality employment space as a key element of sustainable mixed-use regeneration. Network Space is a commercial developer therefore the delivery of the high quality employment accommodation will be at the forefront of each scheme. The strategy is to secure the delivery of 300,000 sq ft of employment space through the development of six Network Villages within a seven year timeframe. The approach to identifying and securing suitable development opportunities for Network Villages is as follows: A programme of meetings and presentations to key regeneration people in EP, RDAs and local authorities Through a carefully considered marketing and PR strategy, highlighting the success of Network Space and promoting the Network Village vision A focus on the main former coalfield areas – initially North East, Yorkshire and East Midlands followed by Staffordshire .
The key factors that make Network Villages distinctive are as follows: Network Space’s track record of delivering high quality business space It’s remit is development in the former English Coalfields regions The design and delivery of business space is primary not secondary Highly sustainable developments Regeneration benefits in towns and villages The support of English Partnerships and its ability to highlight potential public sector opportunities Provision of high quality business space suitable for local SMEs Well managed business centres offering flexible lease terms Aim to develop to high standards – BREEAM rating of Excellent; Code for Sustainable Homes level 4 On behalf of Network Space, Langtree provides both development and management services. This extends from site finding, design and construction through to letting, management and maintenance. Langtree is a developer that specialises in developing high quality employment space suitable for SMEs in regeneration areas.
2. NETWORK VILLAGE ELEMENTS 2.1
EMPLOYMENT
The basis of a Network Village scheme will include a combination of the following employment space: Critical mass of 2,322 to 6,503 sq m (25,000 to 70,000 sq ft) of high quality business space High quality managed business centre typically 2,322 sq m (25,000 sq ft) providing fully serviced offices on flexible terms as recently completed at Matrix Business village, Keys Park, Hednesford Out of hours community use of the meeting rooms and conference facilities within business centres will be available to local community groups providing Multi-occupied office building providing high quality offices suites offering grow-on space for SMEs. Mansfield i2 provides up to 18 suites in a high quality 3,252 sq m (35,000 sq ft) office building next door to Mansfield’s high technology incubation centre Networkcentres providing high quality workspace units suitable for SMEs and start-up businesses typically 1,858 to 3,716 sq m (25,000 to 40,000 sq ft) providing units ranging from 70 to 325 sq m (750 - 3,500 sq ft). Allerton Bywater and Sherwood Energy Village, Ollerton are two recently completed schemes designed to be adjacent to housing In appropriate locations self-contained own front door offices available for sale or to let, typical size 140 to 280 sq m (1,500 - 3,000 sq ft) will be considered. The developments at West Moor Park, Armthorpe and Sherwood Energy Village, Ollerton both offer own front door offices
The offices and workspace will be design with the aim of achieving BREEAM excellent rating Where there are suitable existing buildings refurbishment and subdivision may be an alternative
2.2 RESIDENTIAL The residential element of the scheme will include the following: Network Space to obtain outline planning permission and prepare land for sufficient number of residential units (houses and apartments) to cross subsidise the speculative development of the proposed employment space. The amount of residential necessary to cross subsidise the scheme will vary depending on the cost of abnormal works, residential values, Section 106 requirements, the supply and demand for employment space in any particular area The agreed masterplan and design of the development will deal with access, safety, security, outlook, play areas, traffic management and good quality design reflecting local characteristics and ensuring that the employment space is in an appropriate prominent position within the development; creating a connective neighbourhood integrated into the existing community Affordable housing will be a key element within each scheme – providing a range of house types to meet local requirements A Design Code for the delivery of energy efficient, sustainable homes to be developed to a minimum standard of Code for Sustainable Homes Level 4 (rising in line with English Partnerships/Homes and Communities Agency quality standards) Building sustainable homes is not simply reducing CO2, but also looking at the materials used in construction and minimising other environmental impacts such as reducing the use of water and the waste generated in construction and in the way we live
PAGE 10/11 NETWORK VILLAGE ELEMENTS
To enhance the sustainability – explore new proposals for live/work zones where units can be built as offices and or homes and occupied partly or wholly for either use Residential land disposal strategy – Network Space will obtain planning permission, part outline and part detailed, for the mixed use Network Village development then market the land available for residential development with the benefit of outline planning permission for sale on an unconditional basis. Land remediation, new roads, drainage and services will be delivered by Network Space as appropriate. The receipt for the residential land will fund the remediation, abnormal costs and infrastructure and crosssubsidise the speculative development of the employment accommodation
2.3 OPEN SPACE The open space element of the scheme will include: The open spaces, parks, play areas and landscaping are important elements that will vary significantly within each scheme. It is important to create wellused places that have a good perception of safety and provide valuable amenity for both existing and new communities Community involvement will be necessary during the detailed design process to foster a sense of ownership, and hopefully minimise risks of vandalism. The design of play areas will need to be targeted to local need and potential user groups
There are opportunities to involve local people when developing any art feature, perhaps reflecting the history of the site of the area, and possibly during the implementation phase in planting trees, shrubs and bulbs Recycled materials will be utilised wherever possible in the construction of footpaths and cycle ways. Durable natural materials should be used for benches, boardwalks and fences Sustainable management practices are intrinsic in the long-term success of parks or open space as assets to the local community. Long term ownership and stewardship of the open space by the local authority or community trust or the Land Restoration Trust, will be considered in each case
2.4 RETAIL, COMMERCIAL AND LEISURE Certain sites may offer additional sustainable community development opportunities and may require suitable provision of retail premises and community facilities. Depending on the size of the proposed Network Village scheme there may be opportunities for the development of additional retail or commercial/leisure premises which will enhance the sustainability and viability of the proposals, to include: Neighbourhood centres that may include, local supermarket or general store, and small retail units for a range of occupiers Community facilities such as village or community hall, library and crèche Health care facilities including clinic, consulting rooms, dental and doctors’ surgeries Other commercial opportunities will depend on the size of the site, location and main road frontage. Possible uses could include car showroom, hotel, pub and restaurant, garden centre, local trade park units, small and medium size industrial units
3. SUSTAINABILITY The strong regeneration benefits of the network village proposals include making use of brownfield sites in sustainable locations with a strong employment led justification. This coupled with a commitment to deliver an exemplar high quality development provides a compelling regeneration planning case. The proposals are for mix-use developments within or adjoining existing towns and villages therefore maximising the use of infrastructure and facilities. Key aims will be to achieve CO2 reductions, energy efficiency and reduce energy consumption. Sustainable energy design needs to be affordable and practical. Improvements can be achieved by: Improving fabric performance Condensing boiler technology Natural ventilation Daylight linked lighting control Heat recovery Solar shading Ground source heat pump Solar thermal water heating
PAGE 12/13 SUSTAINABILITY
The houses and apartments within the Network Village will aim to achieve Code for Sustainable Homes Level 4 (rising in line with current EP standards). This means the development will improve performance in a range of areas including, water, waste, materials, drainage, energy and CO2, pollution, health and well being, management and ecology. A Code for Sustainable Homes pre-assessment will be prepared by Network Space in order to provide house builders with guidance on the particular site and English Partnerships quality standards including Lifetime Homes and Buildings for Life.
The offices and workspace will provide high quality employment space for local businesses. The majority of occupiers in Network Space schemes are local businesses and come from within 5 miles.
Building sustainable homes is not simply reducing CO2, but also looking at materials we use in construction and minimising the other environmental impacts – reducing the use of water and the waste generated in construction and in the way we live.
Promotion of design innovation using modern methods of construction and energy efficiency
Network Space will aim to achieve BRE Environmental Assessment Method (BREEAM) standard of Excellent for the offices and workspace. (Network Space schemes are developed as a minimum to very good standard and BREEAM excellent has been achieved for workspace schemes at Allerton Bywater and i2 in Mansfield).
Secured by Design accreditation will be achieved by appointing an architectural liaison officer at an early stage of the design process. Network Space will work with key stakeholders on cross cutting sustainability themes including: Community engagement and management
Provision of training and educational opportunities (to be developed through appointment of consultants by Network Space and English Partnerships) Insuring the creation of a connected neighbourhood
In conjunction, the masterplan and design of the developments will deal with access, safety and security, English Partnerships’ minimum space standards, outlook, play areas, traffic management, and good quality design reflecting local characteristics – creating a connected neighbourhood and delivering diversity in housing choice and tenure.
4. AREAS OF OPERATION 4.1
FORMER COALFIELD AREAS NORTH EAST
COALFIELD AREAS
CUMBRIA
The broad areas of operation cover the former English Coalfields. The agreed boundary of the areas of the company’s operation is defined in the IMC Consulting Engineers Ltd report entitled ‘Workspace Development Areas in the closed English Coalfields January 1999’. The former English Coalfields areas are shown on page 15.
NORTH WEST STAFFORDSHIRE Newcastle upon Tyne
WEST MIDLANDS
Durham
FOREST OF DEAN 4.2 SUITABLE LOCATIONS
Whitehaven
KENT
Suitable sites will be identified as opportunities that require the delivery of high quality employment space as a key element for the delivery of exemplar mixed-use regeneration. Site characteristics may include some or all of the following:
YORSKSHIRE NOTTINGHAMSHIRE
Leeds York
Within existing towns and villages Liverpool
Close to existing employment
Manchester
Near to adjoining residential
Sheffield
Convenient for the town or village centre Stoke-on-Trent
Use existing infrastructure, services and community facilities
Nottingham
Highly accessible by public transport, walking and cycling Offer additional benefits to local people
Birmingham
Brownfield land Provide open space Potential to sustain and enhance biodiversity and ecological interest Suitable for a range of high quality homes both affordable and market housing Sites are likely to be 4 hectares (10 acres) or more, but could be smaller in high density urban locations
Cambridge
SITES WANTED
Oxford
FOR EXEMPLAR MIXED-USE REGENERATION SCHEMES
Bristol London
Dover Southampton Exeter
PAGE 14/15 AREAS OF OPERATION
5. NETWORK VILLAGE MODEL 5.1
GENERIC SCHEME
For the purposes of developing the business plan a basic Network Village model based upon the Murton pilot experience with sustainable site characteristics as highlighted in the previous section has been adopted and this comprises the following: Business centre providing high quality serviced offices 26,000 sq ft (GIA) Workspace scheme of 15 units totalling 26,000 sq ft Provision of serviced ‘oven ready’ residential land with outline planning permission High quality public open space Brownfield site requiring remediation and construction of infrastructure
5.2 APPRAISAL Key assumptions: In order to develop the financial model the following assumptions have been made: A serviced offices building and workspace scheme would require approximately 4 acres Residential sales value – £175 per sq ft Affordable housing (to be maximised as far as possible) – assumed to be 20%for the purposes of the model
At a remediation cost of £1 million a site of approximately 16 acres with 12 acres for residential would be required. A summary of the development appraisal is set out below. Sensitivity analysis A sensitivity assessment has been carried out to show the effects on the size of site that may be required - by varying the land price per acre, remediation costs and residential values.
Residential value – an increase in the residential sales price of £10 per sq ft will reduce the land required by 3 acres Initial land price – an increase from £200,000 to £300,000 per acre will result in a increased land requirement of 3 acres Remediation costs – an increase from £1m to £2m will require additional land of 3 acres
Section 106 contributions – there will be a range of contributions in addition to affordable housing at a cost of say £2,500 per unit Profit on cost – a standard developer’s profit of 15% including costs of site acquisition, remediation and infrastructure An appraisal is attached for a 16-acre site assuming a base initial land price of £200,000 per acre and remediation costs of £1 million
Network Space
Residential
Revenue Business Centre Workspace units Residential land sale Total Revenue Costs Site Planning
£’s
Revenue
21,000 sq ft (net)
3,500,000
Market housing
177,000 sq ft @ £175.00
31,000,000
26,000 sq ft
1,500,000
Affordable housing
41,000 sq ft @ £122.00
5,000,000
12 acres
9,700,000
Total Revenue
36,000,000
14,700,000 £’s 3,400,000 300,000
Costs
10,000,000
Construction & Fees
18,000,000
8,000,000
End payments
Other costs & interest
1,000,000
Total costs
Total costs
12,700,000
Profit on cost
2,000,000
£’s
Site (serviced)
Construction & Fees
PAGE 16/17 NETWORK VILLAGE MODEL
£’s
Profit (excl interest)
S106, Marketing & Interest
3,000,000 31,000,000 5,000,000
6. SITE IDENTIFICATION 6.1
SITE FINDING PROPOSALS
The target is delivery of six Network villages and 300,000 sq ft of employment space within a seven year timeframe. The proposed programme for securing further sites for development are two sites in 2008, two in 2009, and a sixth in 2010. The first site at Murton is located in the north east and therefore the proposed target is to identify and enter into agreements for two further sites in 2008 – say one in Yorkshire and one in the East Midlands. A programme of meetings and presentations is being developed. Initial meetings and presentations will be at a regional level with a programme of presentations and meetings with key individuals in English Partnerships and the RDAs. This will then progress to local authorities, HMR pathfinders and URCs. It is anticipated that there will also be ‘windfall’ type opportunities identified outside the initial search areas.
6.3 INITIAL SITE ASSESSMENT We would also aim to meet with senior property consultants who specialise in public sector regeneration and development. These individuals have knowledge of local authority regeneration initiatives and plans for high quality sustainable mixed-use development where the Network Village concept would be appropriate.
Initial Site Assessments (ISA) will be considered at monthly Network Space Operations meetings. Key points to be considered are as follows:
The ISA will be carried out using available information and will then be considered at the next Operations Meeting allowing a minimum of two weeks for an assessment. The site will be considered against the key points and the ISA will take the form of a concise report.
Timescale for delivery Initial market assessment of supply/demand for high quality employment space and housing
Following a positive ISA - a budget for the appointment of a development team will be agreed along with a programme for the completion of an Outline Project Proposal (OPP). This will be a more detailed assessment of the site and preparation of a proposed scheme to be considered by the Network Space Board.
Site is of sufficient size to deliver residential that will fund the development of the site and the provision of the employment space
It is anticipated that sites are more likely to be secured on a negotiated basis rather than open competitive tendering. Network Space has been developing in the coalfield areas since 1999. Langtree has in depth knowledge of the market for employment space in many of these areas and English Partnerships through its key role in the National Coalfields Programme has detailed knowledge of the communities and former colliery sites within the coalfield areas.
Achieving high standards of development i.e. BREEAM excellent and Code for Sustainable Homes minimum of Level 4
Following completion of the OPP, and subject to recommendations, approval would be granted by Network Space Board to conclude negotiations with the landowners (enter into a development agreement) and proceed with the preparation of a planning application and detailed site investigations and assessments.
High level of sustainable development Potential for wider benefits for the local community Overall scheme to be commercially viable
6.2 SITE DELIVERY PROGRAMME The indicative development programme outlined below indicates that the period for delivery from site identification through to completion is likely to take 3 - 4 years.
An indicative programme for site identification and development is as follows:
Period Month no. 4 weeks
1
Outline Project Proposal
2 months
2-3
Masterplan & Planning Application
6 months
4-9
Consideration of Planning Application
4 months
10 - 13
Detailed design & tender
6 months
14 - 19
Site remediation & Infrastructure
6 months
20 - 25
4 months
16 - 19 20 - 25
12 months
26 - 37
Initial Site Assessment
Marketing & Sale of Residential Land Construction of Buildings
PAGE 18/19 SITE IDENTIFICATION
Site
Identification & Agreement
Start Construction
Completion
1 Murton
2007
2008
2010
2
2008
2009
2011
3
2008
2010
2012
4
2009
2011
2013
5
2009
2011
2013
6
2010
2012
2014
7. FINANCIAL COMMENTARY The following table sets out some of the key financial indicators for the Network Space Business Plan for the period to June 2015.
Jun 09 £000
Jun 10 £000
Jun 11 £000
Jun 12 £000
Jun 13 £000
Jun 14 £000
Jun 15 £000
(8,640)
(14,351)
(16,315)
(12,320)
(12,420)
(8,440)
(6,043)
Pre interest profit
2,909
3,897
4,988
3,768
4,105
4,674
4,000
Interest
(1,851)
(2,055)
(2,472)
(2,395)
(2,655)
(2,822)
(2,694)
1,058
1,842
2,516
1,373
1,450
1,852
1,306
1.57
1.90
2.02
1.57
1.55
1.66
1.48
Tangible Fixed Assets
£000
£000
£000
£000
£000
£000
£000
Estates - Investment
50,831
50,831
50,831
50,831
50,831
50,831
50,831
Estates - NV Phase III
2,356
8,724
11,306
16,580
21,859
22,086
28,891
Total Fixed Assets
53,187
59,555
62,137
67,411
72,690
72,917
79,722
(24,466)
(29,822)
(29,858)
(33,899)
(37,515)
(36,627)
(42,136)
(10,091)
(9,815)
(9,785)
(9,133)
(8,857)
(8,676)
(8,295)
18,629
19,919
22,494
24,379
26,318
27,614
29,291
Bank debt as % of INV & DEV
46%
50%
48%
50%
52%
50%
53%
Year on year growth rate
4.1%
6.9%
12.9%
8.4%
8.0%
4.9%
6.1%
(37,904) (40,949)
(41,879)
(45,596)
(45,024)
(42,136)
1) Capital Programme 2) Profit & Loss Account
Profit before tax Bank interest cover (PBIT) 3) Balance Sheet
Bank debt Other assets/liabilities Net Assets
Peak debt
PAGE 20/21 FINANCIAL COMMENTARY
(32,316)
Capital Programme
Balance Sheet
The delivery of the six sites will require a significant capital programme with spend averaging in excess of £10m per annum for the seven years to June 15.
The projection assumes that fixed asset values will remain at June 2007 levels. The above shows that net assets are projected to grow from £18m at June 2007 to £29m at June 2015.
Profit and Loss Account The results show profit being delivered every year up to June 2015. The projections show an interest cover of at least 150%. The business plan assumes that new workspace will continue to let up over fifteen months, which has been the case historically. It also assumes a serviced office element will let up over twenty-one months. Peak occupancy is assumed at 87.5%.
The year on year growth rates in net assets are also shown in the table above varying from 4.1% to 12.9%. The overall growth over the period is at an annualised growth rate of 7.3% from June 2008 to June 2015. The Network Village programme will be funded by bank debt. It is expected that the bank facility would need to increase from the current approved level of £27m up to around £50m, and increasing bank debt can be provided with a satisfactory loan to value ratio of below 55%.
8. DEVELOPMENT 8.1
DEVELOPMENT AGREEMENT
Following the identification of a suitable site and having completed an initial site assessment, Network Space will agree Heads of Terms and enter into a Development Agreement with the land owner for the delivery of the proposed Network Village scheme. Under the terms of the Development Agreement Network Space will acquire the whole site and then arrange the disposal of the residential land and commercial areas to cross subsidise the delivery of the development and the employment space.
8.2.1 Policy The masterplanning, design and development and the strong regeneration benefits of the Network Village proposals accord with the Government’s principal planning guidance, and it’s objectives for sustainable development. This includes: Regional Spatial Strategies and Regional Planning Guidance PPS 1 Delivering Sustainable Development – states the importance of good design, pre-planning discussions and community involvement
8.2 PLANNING
PPS 3 Housing – sets out the Government’s policy framework and housing
The development team will prepare an initial site assessment based on available information and an initial masterplan will be drafted for the purposes of early consultation. A scoping study for a planning application will then be agreed with the local planning authority.
A wider choice of quality homes that;
Following pre planning consultation with the local authority, local people and stakeholders, including public exhibitions, the masterplan will be revised and prepared in more detail for the planning application. In accordance with the agreed scoping study full reports will be prepared to support an outline application for the site as a whole and detailed application for employment space and infrastructure.
- Create sustainable, inclusive mixed communities in all areas PPG 4 Industrial, commercial development and small firms – identifies that economic growth and high quality environment have to be pursued together. That where appropriate small scale employment development should be integrated with residential
.
PPS 9 Biodiversity and Geological conservation
- Widen opportunities for home ownership; - Improve affordability across the housing market, including by increasing the supply of housing; and
PPG 13 Transport – focuses on promotion of sustainable transport PPG 14 Development on unstable land PPG 17 planning for open space spatial and recreation PPS 23 Planning and Pollution Control PPG 24 Planning and Noise PPS 25 Development and flood risk – deals with sustainable development – appraising, managing and reducing the risk PPS 1 draft supplement on Planning and Climate Change – spatial planning should reduce emissions
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8.3 EXIT STRATEGY 8.3.1 Employment
8.3.3 Open Space
The managed business centre/serviced office buildings and workspace schemes will be retained and managed by Network Space. Own front door offices may be available to let or for sale and this will depend on the particular details of each scheme.
Sustainable management practices are intrinsic in the long-term success of parks or open space as assets to the local community. Therefore long term ownership and stewardship of the open space will be considered in each case. Alternative options include:
8.3.2 Residential
Adoption by the local authority;
Serviced residential land will be marketed for sale with the benefit of outline planning permission and full details of site investigations, infrastructure remediation proposals to be completed by Network Space, Code for Sustainable Homes, affordable housing, and S106 Agreement and a strict Design Code prepared by Network Space to ensure the delivery of high quality aspirational housing.
Community or trust ownership and management company with service charge; and
Marketing will take place following receipt of planning permission with unconditional sale and land receipt following remediation and infrastructure as appropriate. Network Space may also consider direct development of homes or apartments in live/work zones.
Transfer ownership to the Land Restoration Trust (with a dowry payment), which was also created by English Partnerships, and is a key operator in the coalfield areas. Network Space has already held preliminary discussions with LRT who have confirmed potential interest 8.3.4 Retail, Commercial and Leisure Opportunities and requirements may arise for commercial development for uses such as hotel, pub/restaurant, local supermarket, neighbourhood centre, motor trade, or small/medium industrial units. Development or sale of plots will be on the basis of maximising receipts through pre-let, turnkey or land sale basis.
9. COMMUNITY ENGAGEMENT AND SOCIO-ECONOMIC IMPACTS 9.1
CONSULTATION
9.3 ECONOMIC AND SOCIAL IMPACT
Community participation is a key objective in the Government’s reform of the planning system. Network Space will undertake pre-application discussions at an early stage with council officers, community groups and local stakeholders. The company also recognises the importance of maintaining ongoing engagement as the draft masterplan is developed.
Additionally consultation and engagement would be achieved using leaflets, press releases and interviews with journalists, meetings with residents and stakeholders, and meetings with objectors to understand issues and to explain and clarify the proposals.
Following initial consultation and production of a draft masterplan the proposals would be displayed at a public exhibition inviting feedback, comments and ideas from local people. A second public exhibition would be arranged thereafter to display the revised masterplan and alterations as a result of the points raised at the first exhibition.
As part of any planning application, the Design and Access Statement would also include a Statement of Community Engagement outlining the stages of consultation undertaken with various stakeholders.
9.2 PLANNING PROCESS
The Urban White Paper, Our towns and Cities: the future, launched in November 2000, sets out the agenda for the long term redevelopment of the urban fabric with improving sustainability established as the clear goal. The focus of the White Paper is on achieving sustainable economic growth through engaging local people to tackle problems such as poor living environments, failing economies, inadequate services and weak social networks.
The high quality employment space will bring additional quality employment and investment into the area. Network Villages will result in additional benefits of increased competitiveness as well as local multiplier effects and social benefits from increased investment. Furthermore by diversifying and strengthening the local economic base, the ability of the area to withstand future economic changes would be enhanced.
The Network Village concept is fundamentally in line with the strategic vision outlined within the White Paper. As well as bringing brownfield sites back into productive economic use, high quality design will be central to the Network Village proposals resulting in the overall improvement of the urban fabric for the benefit of all within the local community. The proposals will provide new and better employment opportunities for the local community as well as providing a high quality mixed residential environment.
Well-designed mixed-use development that includes the supply of high quality open space will make the area more attractive and improve its image.
The delivery of the business accommodation in support of economic development objectives is financially and strategically supported by the residential development. The residential development not only secures the financial viability of the scheme, but also supports local economic development through the provision of a better choice of homes as well as supporting local services. The justification for Network Villages is also based upon a market failure argument as without grant assistance or cross-subsidy from residential development the employment space could not be delivered.
PAGE 24/25 COMMUNITY ENGAGEMENT AND SOCIO-ECONOMIC IMPACTS
Network Villages may also provide demonstration effects in the form of sustainable redevelopment that is compatible with the surrounding area and local community; as well as raising confidence and aspirations within the area; and assisting in encouraging more speculative development and stimulating other landowners to invest in their own sites. Network Village will deliver new high quality employment space that will bring significant socio-economic benefits to the local area creating a more sustainable local community.
10. MARKETING AND PR 10.1 INTRODUCTION
10.3 COMMUNICATIONS TACTICS
10.3.4 Public Relations
Methodology
Network Space needs to gain a higher profile at both regional and national levels in order to promote the Network Village proposals. The majority of networkcentres are in the East Midlands, Yorkshire and the North East and consequently this has led to the profile of Network Space remaining relatively localised.
10.3.1 Direct Marketing One-to-one appointments, meetings and presentations, to key executives and decision makers; use of direct mail and e-mailers to named individuals; attending appropriate events in target areas.
Targeted public relations will help to raise awareness and reinforce and support the marketing strategy. Good news stories and press releases will be targeted at key media and quality coverage will be sought in local, regional and trade press and broadcast and national media where appropriate.
PR consultants will use the following tools to ensure that Network Space and the Network Village brand will receive regular media coverage:
10.3.2 Advertising
Aims and Objectives
10.2 AIMS AND OBJECTIVES 10.2.1 Target Audience The target audience are senior executives and decision-makers involved in regeneration initiatives within the former coalfield areas. This includes English Partnerships regional teams, Regional Development Agencies, local authorities and property consultants in regeneration and development. 10.2.2 SMART Objectives Promote Network Space’s track record and achievements Raise awareness of the Network Village concept Encourage new land opportunities for Network Village sites Raise the profile of the expertise behind the brand Highlight the quality and sustainability of the initiative Highlight involvement of English Partnerships and the fit with the Government’s agenda
Targeted advertising in national and regional magazines and newspapers will be considered to tie in with events and milestones and direct marketing initiatives.
PR consultants have been appointed to deliver an effective public relations strategy by: Raising and broadening brand awareness
10.3.3 Events
Secure consistent PR coverage in target areas
Targeted event attendance and sponsorship offers opportunities for good public relations via media coverage, networking, and promotion of Network Villages.
Position Network Space as an innovative developer of high quality, exemplar workspace and homes in the former English coalfield areas
Network Space corporate events – it is proposed to elevate the Matrix Business Village launch in June 2008 to an event to mark the completion of the 700,000 sq ft milestone and further promote Network Villages Seminars/workshops – identify workshops and seminars on regeneration, housing, mixed-use and sustainable development for speaking opportunities Property dinners & award ceremonies – consider sponsoring awards and hosting tables Boardroom lunches – host boardroom lunches and presentations
Ensure key members of the Network Space team are visually seen as the face/s behind the brand at key events and networking opportunities Drive footfall to all events Key messages The key Network Space messages to incorporate into all communications are: Network Village is a unique and distinctive mixed-use development initiative led by a commercial developer, where delivery of high quality employment space is at the forefront Network Space specialises in regeneration in former coalfield areas, delivering high quality workspace and exemplar homes Track record – completed 22 sites, delivering 700,000 sq ft of workspace and offices with high occupancy rates Network Village will create six sustainable mixeduse developments and deliver a further 300,000sq ft of employment space
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Focus on the key messages and benefits to former coalfield areas News – a regular stream of news releases highlighting business success, planning submissions, launches and successful Photo opportunities – use photo caption stories. Surveys/research – any research undertaken by Network Space can create a new press opportunity Comment opportunities – proactively seek on topics such as brownfield redevelopment, legislation changes, sustainable buildings, accommodation for SMEs Forward feature opportunities – in target areas Media one-to-ones – interviews with key journalists Awards – submit schemes for awards in order to profile the success of the company and its future aims 10.3.5 Advertorials Place stories in regular magazines and newsletters of local authorities, Chambers of Commerce, Business Links and RDAs.
10.3.6 Literature
10.3.7 E-marketing
All literature is professionally designed incorporating the Network Space and Network Village branding:
The proposed use of e-marketing includes the following:
Network Village vision brochure – has been produced to showcase the vision for Network Villages E-Newsletter – a four-page newsletter is currently produced on an annual basis. It is proposed to produce this as an e-newsletter on a more frequent basis as this is a cost effective ways to reach an audience in a highly targeted, personalised manner. A personalised database of senior executives and decision-makers in the target areas has been created Factsheets – detailed case studies to demonstrate various elements and Network Space success such as BREEAM ratings and awards Commencement business plan – sets out the areas of operation and delivery plan for the period to 2015
Websites A new website www.networkvillage.co.uk has been created using the design and content of the Network Village vision document. It has been designed so that it can be updated with news features The website – www.networkspace.co.uk – has a full content management system and is constantly up-dated Analysis of the web traffic statistics reports will help us to improve website content, graphics and lay-out or add more links to other parts of the sites Search engine optimisation Search engine optimisation is an effective way to generate targeted website traffic through strategic selection of key phrases, and research shows 60-80% of site traffic originates from search engines. 10.3.8 Budget and Timing
DISTINCTIVE MIXED-USE DEVELOPMENT DELIVERY OF EMPLOYMENT SPACE IS AT THE FOREFRONT
PAGE 28/29 MARKETING & PR
A marketing and PR action plan and budget have been prepared. The action plan includes: Updated and expanded database of key players for mail shots and events Identify range of key events to attend and possible speak opportunities Presentation and meeting dates in the diary for EP, RDAs and regeneration contacts
11. RISK ASSESSMENT AND MANAGEMENT 11.1
GOVERNANCE
The development process is managed by Langtree on behalf of Network Space involving highly experienced external consultants and managed through four stages of reporting:
11.2 ACQUISITION
Initial site assessment – carried out to identify the risks on delivery, timescale, planning, funding and marketing
Through a combination of experience and advice from external consultants, during the acquisition process risk is managed through the reporting system with valuations prepared by external property agents and cost plans prepared by external consultants. Legal risk is managed by independent lawyers who draft and negotiate development agreements and prepare reports on title.
Outline project proposal – providing a more detailed assessment
11.3 CONSTRUCTION
Pre planning report – a detailed report prepared prior to submission of the planning application Post tender report – prepared following receipt of tenders and prior to letting construction contracts On an on-going basis the joint venture partners attend monthly Operations meetings dealing with asset management and reviewing individual development schemes. Board meetings are held quarterly. Network Space has a strong corporate governance regime following English Partnerships corporate guidance and subject to annual assessment by their internal auditors. Network Space has always received a good rating.
PAGE 30/31 RISK ASSESSMENT AND MANAGEMENT
Tender process – A minimum of four established regionally based contractors with a proven track record are invited to tender and normally three out of four are contractors who Network Space has used before. The tender process and assessment is managed by an experienced professional team familiar with Network Space developments. Post-contract – Contracts are normally awarded on a Design and Build basis and are managed by external project management consultants who liaise with the contractors on behalf of Network Space.
12. MONITORING AND EVALUATION 12.1 PERFORMANCE MANAGEMENT FRAMEWORK
12.2 EVALUATION
12.1.1 Introduction
12.1.3 Scheme monitoring
12.2.1 Overview
12.2.2 Interim evaluation
This section provides a framework for the systematic collection of information in order to measure the performance of the Network Villages project in terms of monitoring and its subsequent evaluation.
A clear and simple performance management system will be established to collect monitoring information for each of the schemes in line with Langtree’s standard reporting format for Network Space. This will mean assembling and updating information on each scheme.
Evaluation is the critical examination of projects and programmes in order to assess the extent to which the objectives of intervening have been achieved, additional impacts or changes that are attributable to the project or programme have resulted, to assess the extent to which changes were secured in an efficient and cost effective way, and to provide lessons for the future. Monitoring data will be one of the key inputs into any evaluation.
The evaluation will be undertaken in order to assess the added value of Network Villages. It is proposed that the evaluation will be based upon a review of monitoring data collected to date coupled with a structured interview programme of partners and other organisations.
12.1.2 Monitoring Monitoring is the process of checking actual progress and comparing this with the plans for a project when it was conceived or promoted. It can provide an early warning that things are not going to plan and an opportunity to take timely corrective action. Similarly, it can usefully highlight where performance is significantly better than expected. The partners therefore recognise the importance of giving time and effort to developing and implementing an effective monitoring system. Establishing an appropriate framework for the on-going monitoring of Network Villages will be essential in order to ensure that progress is in line with the objectives set by the partners. Accordingly, an approach composed of two elements is proposed: A bottom-up approach based upon the assessment of individual schemes; and An evaluation of the programme as a whole Each of the approaches has its advantages and disadvantages. For example, while the bottom-up approach can provide a detailed understanding of the effects of the key schemes within Network Villages and the communities within which it sits, it may be difficult to discern the wider, induced or less tangible impacts. On the other hand, a formal evaluation can provide an overall understanding of how Network Villages is performing, albeit that upto-date socio-economic indicators are often not available, and it may be difficult to attribute impacts to Network Villages or its elements as opposed to external factors. The proposed methodology for this Plan therefore seeks to use both approaches.
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This includes: Finance Report Lettings and Management Report – portfolio statistics, current deals, vacancy summary, enquiry tracking, space available Development Report PR and Marketing Report The following reporting arrangements are proposed:
It is proposed that the evaluation of Network Villages should comprise two components as follows: Interim evaluation – within the first year following the completion of the first few schemes – it is suggested that this would be after 2 years; and Full evaluation – an independent evaluation of Network Villages after the first 4 years of operation
12.2.3 Full evaluation A full evaluation of Network Villages will be commissioned after 4 years of operation. This evaluation would be undertaken by independent consultants. It would address a number of key questions, including: The impact of Network Villages; Causality and attribution; Additionality and value for money;
Monthly reports as part of the established Network Space accounting and reporting cycle for Operations and Board meetings, focusing on scheme performance; and
Change processes;
An Annual Report, for the joint venture partners – for use by both partners in line with their own external communications strategies
Key lessons
In addition, an annual Business Plan and budget will be prepared for consideration of the Network Space Board in its normal cycle for these in late spring of each year
Effectiveness; Sustainability and equality; and
13.WAY FORWARD This Business Plan has the backing of English Partnerships and Langtree and during the first twelve months we will aim to pass the following milestones: Spring 2008 A marketing and PR action plan to be in place including a programme of presentations and meetings with senior executives and decision makers involved in regeneration in the initial target areas Summer 2008 To have secured planning permission for Murton Network Village with a target for starting on site by December 2008
Autumn 2008 To have completed a programme of presentations and meetings with senior individuals, key stakeholders and delivery partners in the initial target areas December 2008 To have identified and agreed terms for two further Network Village schemes
By Spring 2009: The first Network Village scheme at Murton will have obtained planning permission and will be on site. During the process key issues will have been identified regarding masterplanning, consultation and costs Further opportunities for Network Village schemes will have been identified and will be under assessment and negotiation
PAGE 34/35 WAY FORWARD
A programme of presentations and meetings will be underway in the second phase of target areas Increased awareness of Network Space in the target areas and Network Villages is recognised by stakeholders as an innovative and sustainable mixed-use regeneration model
The Business Plan outlines the Network Space operational areas in the former English Coalfields regions and outlines the minimum size and type of sites to be considered. During the course of the business plan it may be necessary to review the business plan model based on ongoing experience of the planning and development for Network Villages. Property market conditions will be constantly monitored and factored into reviews. For further information on Network Village please contact: Network Space Ltd Centrix House Crow Lane East Newton-le-Willows WA12 9UY Tel: 0800 542 0402 Email: info@networkvillage.co.uk Website: www.networkvillage.co.uk