Land Swap Agreement in respect of Bath Western Riverside Phase II

Description

This notice relates to an arrangement which includes a series of agreements, with the main object being a land transaction which the Council considers is exempted under paragraph 8, Schedule 2 of the Procurement Act 2023, (an agreement for the acquisition of land and buildings). Whilst there are a series of related ancillary agreements, the Land Swap Agreement will not meet the definition of public "works contract" as the supplier will not be obligated to complete any works pursuant to it. However, the Council also considers it has reasonable grounds for a direct award under Schedule 5 of the Procurement Act 2023 in the circumstances (as explained below) and this transparency notice is therefore published to ensure full transparency as to the Council's intentions. Bath Western Riverside is a major component of the Council's SHLAA and housing delivery trajectory. The project was committed in 2010 and has successfully delivered 854 new homes with 25% affordable housing within phase 1. Bath Western Riverside Phase 2 (the Site) is the former Bath gas works site. The Site is part owned by the Council (which owns 31.5%), and part owned by St William Homes LLP (part of the Berkeley Group) (Berkeley) (which owns 68.5%), The Council intervened to acquire its part of the Site in 2019 for regeneration purposes with the objective to maximise the provision of affordable housing delivered given the viability challenges faced from the former land uses and site conditions. To date, the Council has carried out a series of staged initial gas rationalisation and enabling works, funded predominately by Homes England (initially carried out between October 2020 and October 2023), with the most recent site wide remediation and enabling works (the Remediation Works) commencing in 2025, with Berkeley carrying out the works on a site wide basis. Homes England again provided significant funding for the required Remediation Works, and the Council passed on the proportional benefit of the Homes England grant to Berkeley (in line with Berkeley's ownership of the Site), who it entrusted to deliver the Remediation Works (including the works across the Council owned portion of the Site). In order to comply with both planning and strategic housing aims, the Council must obtain a minimum number of affordable housing units across the Site as a whole and therefore has the option to either: procure the construction of such units itself, being restricted to its own part of the Site; or to increase provision by acquiring units from Berkeley (additionality) which will be constructed on Berkeley's land. The total "land swap" transaction will be contracted for in phases as follows and this Notice covers all such Agreements: Primary Agreement: 1. Land Swap Agreement - Subject to achieving a satisfactory planning permission and Berkeley (at its own volition) building to a "golden brick" level on the part of the Site known as "Block G" (currently owned by Berkeley), Berkeley will transfer the freehold interest in Block G to the Council in return for the Council transferring its part of the Site to Berkeley. There will be additional balancing payments paid by each party to ensure the agreed price is received for each party's land. Ancillary Agreements 2. Licence to Complete Block G - Following completion of the land swap, Berkeley will obtain a permissive licence from the Council to continue to occupy Block G for the purposes of its completion with the relevant planning permission, being the planning permission with reference 22/03224/EFUL for the construction of 92 dwellings, being the "Block G Planning Permission"). Note that the Council do not consider that this arrangement meets the definition of a public works contract. 3. Fit out works - The Council will have an option (but not an obligation) to call for Berkeley to enter a contract to upgrade the specification for Block G at an additional cost. The Council considers that if it chooses to enter into such an agreement in the future it will be below the threshold for works under the Procurement Act 2023. 4. Conditional Purchase Agreement for Linear blocks - subject to completing the Land Swap Agreement, the site for the Linear Blocks will then be owned by Berkeley. Subject to funding and therefore at its option, the Council may agree to purchase c140 dwellings known as the "Linear Blocks" from Berkeley to golden brick should Berkeley choose to build them. The transfer will be conditional on the Berkeley reaching golden brick. Thereafter, the parties will also enter into a development agreement to deal with the development of the Linear blocks from golden brick level to practical completion. Due to ownership and access limitations only Berkely could complete the works. In order to achieve the outputs above Berkeley will undertake initial planning services to secure satisfactory planning permission over the whole Site, and specifically over the current Council land which does not have planning permission. To the extent Berkeley receives consideration for these services from the Council, such sums will be below the threshold for the services under the Procurement Act 2023. Subject to satisfaction of conditions linked to funding and planning consent the target date of the Land Swap will be March 2027 with construction of Block G completing in December 2029 and construction of the Linear Blocks completing in 2032. ## Contract award Title: Planning Services Agreement ## Contract award Title: Fit out works (Block G Land Swap) ## Contract award Title: Conditional Purchase Agreement for Linear blocks