Rotherham Council asked to give up future income from scheme for Westgate chambers project completion
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Rotherham Council sold Westgate Chambers to the current developer at a discount rate five years ago, in a bid to support the regeneration of the area.
A condition in the contract stipulated that the council must buy back the property if the plans became un-viable, which was later removed so the developer could secure finance for the project.
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Hide AdNow, a report states that the developer is ‘having difficulty in securing further funding against the part completed scheme’, which is causing ‘serious financial issues’.
The developer has approached the council to ask for the removal of the overage provisions to allow the funding to be secured.
What is an overage clause?
Overage clauses are often used by the sellers to ensure they receive additional funds after the sale is completed, usually when a ‘trigger event’ takes place.
The original building was built by architect John Platt in 1794 as a private residence and includes a Georgian façade which is Grade Two listed.
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The first phase of the development, is now complete, with ten new apartments and four commercial units
Phase II is currently ongoing and demolition of 2-26 Domine Lane is now completed, this phase will bring about a further 19 apartments to the market.
The final and third phase will be the new build part of the project and a new four-storey building will deliver a further 32 apartments.
Officers say, in a report to cabinet: “Funding cannot now be secured and the development will not be completed unless the situation is resolved.
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Hide Ad“The lenders require full unencumbered title to the development.
“The overall scheme would remain unfinished (until funding restrictions are lifted by lenders) and this part completed scheme would blight the landscape of an important area of the town centre that is in much need of regeneration.
“The total removal of the overage provisions will allow the developer to secure the much needed funding to complete the project.”
The report is recommended for approval at the next cabinet meeting on December 20.