Bexley College Tower campus wishes to relocate to a more centrally located site, maximising revenue from the sale of the existing site. This feasibility study aims to explore the possible solutions and identify the most feasible option for redevelopment, maximising the revenue raised by the sale of the land and existing structures.
The site occupies 3.11 Ha and there are three interconnecting structures, along with small car parking facilities.
The site is in a residential area, next door to a school.
Project alternatives
The possible solutions of this project are evaluated and compared by the following criteria a) potentials to maximise revenue for the sale of the site for the college; b) benefits to the local community c) timescales for redevelopment
Solution 1 – Tesco Extra Store
The development of a superstore providing a supermarket, opticians, petrol station,
Pros:
- Creates local jobs in the community.
- Provides a range of local services under one roof.
- Good bus and train service from surrounding area are already in existence.
Cons:
- Access to the site limited.
- Noise pollution to the school.
Solution 2 – Big Yellow Storage
Pros:
- Creates local jobs in the community.
- Provides local storage
Cons:
- Unsightly to locals
- Access to the site limited.
- Noise pollution to the school.
Solution 3 – soft play centre
Pros:
- Creates local jobs in the community.
- Local age group
- Close to schools
Cons:
- Area main road
- Noise pollution to the school.
Solution 4 – Leisure Park
Pros:
- Creates local jobs in the community.
- Brings entertainment to the area.
Cons:
- Bluewater shopping centre not that far away
Conclusion
Whichever solution is considered, the current structures would need to be demolished. These buildings are not only unsightly, but they are uneconomical to run. The building has concrete cancer, which means in a few years it will start to erode.
The two solutions which are most feasible are the redevelopment of the site to create a either a Tesco Extra Store or a Big Yellow Storage facility. There is already considerable housing with few facilities within the local area. A leisure park would be relatively small in comparison to accessible developments such Bluewater. There is a risk that a small local retail park would be underused, as consultation shows that residents tend to already use the larger facilities at Bluewater.
Big Yellow Storage facilities are an option because there is no such facility within 15 miles. Construction is simple and quick to install witch would be more cost effective than Tesco extra.
The development of Tesco Extra would bring considerable benefits to the local community. A typical retail development of this size would create 400 jobs for local people, and given the high levels of unemployment of local residents it would make a considerable contribution to the local economy. The site is already well served by public transport and good road links. Consultation with local residents demonstrates that this is the preferred option. This means that there is less likely to be opposition to obtaining planning permission.
In conclusion, Tesco Extra is the most feasible solution for the project.
Legal
The build will be subject to Planning Permission (Category A) from the London Borough of Bexley under the Town & Country Planning Act 1990 (as amended).
It is important to seek early advice on planning, as the project can not legally go ahead without appropriate planning consent. The access road is currently very narrow, and this could have implications for gaining planning consent. As Millington (2000):p60 points out, it will also be important to find out at an early stage what restrictions or conditions may be placed on consent, as this can have a significant impact on the project. For example, the consent may restrict the size of the proposed build which in turn would affect the value of the completed development. It is also possible that conditions relating to the quality of materials may be attached, which affects costs. Equally, the requirement to make contributions to the local authority, such as improved roads, drainage or other amenities may be enforced. This is commonly called ‘planning gain’. Obviously, this all has an impact on the eventual profitability and financial viability of the project. In addition, local residents will have an opportunity to express their views on the
development as part of the planning process. Any local opposition can make the planning process more prolonged, thus creating sometimes unexpected time delays and financial implications.
However, this project already makes a contribution in the form of 73 low cost housing units. Early consultation shows that local residents are generally in favour of such a local amenity, and these factors are likely to improve chances of obtaining planning permission swiftly.
Office of the Deputy Prime Minister (2003) highlights that fact that, in addition to planning permission, the build will also be subject to Building Regulations under the powers provided in the Building Act 1984. The Building Regulations ensure that the building is constructed to a minimum standard, therefore ensuring the health and safety of everyone concerned. The Local Authority Building Control is completely separate from Planning, and will need to be notified. They will ensure building regulations are implemented. Requirements can vary depending on local conditions, and again, any specific requirements can have implications for the cost of the build.
Finally, the project is notifiable to the Health and Safety Executive (HSE) under the Construction, Design and Management Regulations (CDM) 2007. This applies to construction projects lasting more than 30 days or involving more than 500 person days of construction. CDM regulations aim to embed health and safety consciousness into the whole project, and to reduce the risk of harm to those who build, use and maintain buildings. A CDM co-ordinator would need to be appointed, and the design team would need to ensure their design is as safe as possible, and any outstanding risks are identified.
Financial
The options for financing the project are through the use of either ‘equity’ or ‘debt’ funding, as explained by Millington, A (2000): p79. Basically,’ equity’ is the developers own money, and ‘debt’ funding is a loan from a bank or other financial institutions. There are advantages and disadvantages of both, and in reality the project is most likely to be funded from a combination of the two methods.
If the developer has sufficient funding and remains solvent, then ‘equity’ funding will allow the developer to maintain sole control over the project and they will not be dependant on another organisation. The cost of the project will be known throughout the scheme, bringing about more security. However, this also ‘ties up’ capital, which then restricts the number of other projects the developer can be engaged in at any one time.
With ‘debt’ funding the developer often loses some control of the project to the lender, and there might not be as much certainty about funding in relation to length of time available etc. This can have implications if the project does not achieve timescales, and in these cases where unplanned extensions are needed, they may be offered at a much higher rate of interest, thus affecting profitability.
The decision over ‘equity’ or ‘debt’ funding will largely depend on the financial status of the developer, and in practice a mixture of both is likely to be used.
Another consideration which will need to be decided will be whether only ‘short term finance’ is required, or whether ‘long term finance is also going to be needed as finance is going to be needed for longer than the time to design and construct. In relation to this project the funding will most likely be ‘long term’, because the build will not be sold on completion. However, a smaller proportion could be short term funded, as it is intended that a proportion of the residential units would be offered for sale, and therefore, funding would only be needed for the period of design and build.
Example of how much the flats would go for:
Studio flats
20
85,741 sale value
1,714,820
1 bedroom flats
30
94,445 sale value
2,833,350
2 bedroom flats
22
124,082 sale value
2,729,804
Total
72
7,277,974
Project Brief
Tesco extra Bexley College Tower Rd
Objectives and scope of the project
The project will take 2 years to build it will include 5900 sqm of retail space on two floors which will include supermarket, opticians, phone store, clothing, and electrical goods.
There will need to be secure underground car parking for approximately 200 cars.
There will need to be 73 one and two bedroom flats over not more than a further four floors.
Project team
The project team will consist of project manager, lawyers, financial advisors planning consultants, architects, engineers, surveyors, quantity surveyors, CDM co-ordinator and skilled contractors.
Materials
- Light weight steel
- Glass
- Timber
- Concrete
- Ash felt
- Plaster
Legal and Polices
The design will need to meet the requirements of London Borough of Bexley planning department, Building Regulations 1984 and Construction, Design and Management Regulations (CDM) 2007.
