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Council demands talks over £1.5m Edgbaston planning bill

Council demands talks over £1.5m Edgbaston planning bill

🕔21.Jun 2012

The development company behind the £32 million refurbishment of Warwickshire County Cricket Club’s Edgbaston stadium will have to give fresh guarantees that it can pay Birmingham City Council £1.5 million in planning gain money.

MCD Regeneration is asking for extra time to deliver an agreement on Section 106 cash, which the firm promised to hand over in return for obtaining planning permission for a housing scheme on land next to the Test match stadium.

But the council’s new Labour-led administration has made it clear that a deferral of payments is unlikely to be approved unless MCD demonstrates that it has the financial resources to eventually meet its commitments.

One Labour councillor on the Planning Committee said it was wrong for the council to provide “liquidity” to MCD and the firm should obtain a bank loan if it did not have cash up-front to pay the Section 106 contributions.

Coun John Clancy added: “The city council is being asked to do a job that a bank should be doing. But we have no guarantee that we will get any of the money we are owed.

“Life is tough for developers, but it is equally tough for the council and we are cutting public services.”

Fellow Planning Committee member Barry Henley suggested MCD be tied into a performance bond which the council could then call upon to secure payment.

Under the deal signed by MCD, a total of just under £1.5 million is payable to the council to be used to improve public transport and provide social housing as soon as work begins on a mixed-use development on land off the Pershore Road.

The mixed-used scheme, consisting of houses, flats, offices, a multi-storey car park, hotel, bars and restaurants, is a vital ingredient required to raise income for the cricket club and pay for the refurbishment and expansion of the Edgbaston stadium which was completed last year.

Birmingham City Council has already agreed to lend the club £20 million to help fund the development.

MCD says that a fragile housing market and the speculative nature of the scheme means that it is impossible to pay any more than £600,000 Section 106 money as soon as work begins on the mixed-use scheme.

Although a council report by planning officers backed MCD’s application to defer payments, the committee deferred a decision for further negotiations to be held with the developer.

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