Officials urge councillors to pull the plug on King Alfred deal

Councillors are being advised to pull the plug on a £228 million scheme to redevelop the King Alfred Leisure Centre and build hundreds of flats.

The move comes after the housebuilder Crest Nicholson said in August that it would not be going ahead with the project.

But the other half of the consortium – the Hove-based Starr Trust – wants to bring Legal and General on board as a new partner.

L&G is one of the biggest employers in the area and one of the biggest backers in the growing build-to-rent market.

The company, which has offices in Hove, is already working with Brighton and Hove City Council on a build-to-rent scheme in Brighton.

Starr Trust boss Rob Starr said: “The bid document was a consortium. Crest Nicholson walked away. We’ve got a new partner.”

Now councillors are faced with a crunch decision on Thursday 10 October when the council’s Policy and Resources Committee has to decide what happens next.

A report to the committee published today (Wednesday 2 October) said: “The procurement should be closed (and) the current project should be ended.

“A modern Sports Centre in the west of the city remains a council priority and … new plans should be formulated.

“The council appointed Crest as preferred developer in January 2016. Initial progress was made but within months of appointment Crest alerted the council to significant additional financial viability challenges. This led to a prolonged period of negotiation.

“On (Thursday) 8 August Crest Nicholson advised the council of its withdrawal from the project.

“The Starr Trust, a local based charity supporting young people through sports, arts and education, was part of the consortium of which Crest Nicholson was nominated lead bidder.

“Consideration has been given as to whether it might be possible to engage with another developer working alongside the Starr Trust.

“However, the city council is not able to award the contract to an organisation which was not successful following the procurement process.

“While acknowledging the Starr Trust’s role in establishing its relationship with Crest and that the Starr Trust was a member of the Crest consortium, it was not the organisation with whom the council would have entered into a contract.

“The nominated lead bidder was Crest who made clear as part of their bid that they would take 100 per cent of the responsibility for the planning, development and construction aspects of the project.

“The selection criteria were met on the basis of the economic and financial standing and the technical and professional ability of Crest.

“Crest’s financial covenant and construction experience were key.

“It would therefore be unlawful to award a contract to any party other than Crest.”

Mr Starr said that his legal advice was different and a 30-day standstill period would give any serious alternative potential challengers time to show their hand.

He understood why councillors had become disillusioned with Crest and he was pleased to be able to take the project forward with a local business which was better funded and had a longer-term outlook.

The change of consortium partner would allow for a much higher percentage of affordable housing available for local families because L&G looked for a return over a much longer timeframe than Crest Nicholson.

Mr Starr said that the council was losing millions of pounds on the King Alfred currently as well as the business rates and council tax revenues that would come from a timely completion of the Starr Trust proposal.

If the council pulled the plug, it could well be 10 years before it was back in the position that it found itself in now.

He added: “The  council should be saying, what can we do to achieve our aims, not what can we do to stop this scheme.”

The council’s Policy and Resources Committee is due to meet at Hove Town Hall next Thursday (10 October). The meeting is due to start at 4pm and should be open to the public.