Contact: Chris Walton, ext 6906

1. Summary

1.1 The following decision is sought:

That approval be given for the Chief Executive to conclude a Legal Agreement with Gazeley and Eastleigh Borough Council in relation to the construction of part of the Chickenhall Lane Link Road and the making of financial contributions towards the remainder.

2. Reason

2.1 To replace and supersede a previous Agreement between the same parties in order to reflect a change in practical and policy objectives and remove undeliverable financial obligations and actions on the County Council.

3. Other Options Considered and Rejected

3.1 Invoke the existing Agreement. This would commit the County Council to payments and actions which are now considered to be unacceptable.

4. Conflicts of Interest Declared by the Decision Maker or a Member or Officer consulted - None.

5. Dispensation granted by the Standards Committee - Not applicable.

6. Reason(s) for the Matter being dealt with if Urgent - Not applicable.

Approved by: Date:

Councillor K B Estlin

7. Introduction

7.1 In 1992 Eastleigh Borough Council granted outline planning permission for development of land for B1 (office) use both north and south of Eastleigh Airport, and also for the construction of a new local distributor road to access the site and accommodate the additional development traffic. These proposals are referred to as the Northern Business Park (NBP), Southern Business Park (SBP) and Chickenhall Lane Link Road (CLLR) (see attached plan).

7.2 A Legal Agreement was entered into between the developer Gazeley, Eastleigh Borough Council and the County Council. The aim was to ensure that CLLR be constructed and funded in a phased arrangement related to progression of development on the two sites.

7.3 The Agreement was drawn up by Gazeley and is extremely lengthy and complex. It contained some serious flaws which committed the County Council to both funding and actions which it is not, and never was, in a position to guarantee. Nonetheless, the Agreement was signed by all parties and is a binding contract.

7.4 No development had taken place by 1996 and a planning application by Gazeley to allow B8 (warehousing) use on the SBP was approved. Construction on the Royal Mail building (the largest on the SBP) commenced in 1997. Development on the rest of the site has progressed on a piecemeal basis via reserved matters and detailed planning applications to a point in early 2001 where only two sites on the SBP remained vacant.

7.5 The Legal Agreement contained a clause which requires the developer to construct Phases 1 and 2 of the CLLR and make a contribution of £350,000 to Phase 3 upon completion of the development of the SBP.

7.6 In May 2001 Eastleigh Borough Council and the County Council were approached by Gazeley with a request to vary the terms of the Agreement to allow the two vacant sites on the SBP to be developed without any off-site works or contributions, and for these obligations to be transferred to the NBP. The incentive offered to the County Council was a revision of the current Agreement to release it from the obligation referred to in paragraphs 7.3 and 7.9 of this report.

7.7 In order to justify the request, Gazeley commissioned a Traffic Assessment which showed that the traffic generated by the completed SBP can be satisfactorily accommodated on the existing highway network. This is accepted and is due mainly to the change of development uses on the site from that which was originally envisaged in 1992. Warehouses generate significantly less traffic than offices and the Royal Mail building in particular operates 24 hour shifts, thereby spreading its impact over that period.

7.8 It is also considered that if the road was being designed today greater emphasis would be placed on pedestrian and cycle provision and less on capacity improvements. Gazeley has therefore agreed in principle to make a financial contribution of £200,000 towards improvements to pedestrian and cycle facilities in the area, in particular the provision of a new footbridge over the railway on Wide Lane. This would be in lieu of its obligations under the current Agreement which would be transferred to the NBP.

7.9 Gazeley has also agreed in principle to fund stages 1-5 of the CLLR in association with the development of the NBP and to make a contribution equivalent to approximately half the cost of stages 6 and 7. The company has also agreed to release the County Council from its current obligation to fund 50% of the cost of stages 6 and 7 (£2-£3 million) and a requirement to use "best endeavours" to collect contributions from other development in the area which would benefit from the road to offset Gazeley's 50% contribution.

8. Future of Chickenhall Lane Link Road and Northern Business Park

8.1 In view of the recent High Court Judgement which quashes the Secretary of State's decision to grant detailed permission for the road, the future is somewhat unclear. It is understood that Gazeley is to seek leave to appeal to the House of Lords, but this is likely to be a lengthy procedure which even if successful will set the programme back over a year. If unsuccessful the future is even less clear and another Public Inquiry is likely if the scheme is to be progressed. This could take approximately two to three years.

9. Conclusion

9.1 It is accepted that the previous need to provide stages 1 and 2 of the CLLR and contribute to stage 3 can no longer be justified on the basis of traffic capacity need related to the SBP. A contribution of £200,000 in lieu towards pedestrian and cycle improvements in the area is likely to be more deliverable and in line with current sustainable policies and objectives.

9.2 Stages 1-5 of the CLLR are required to gain access to the NBP and can fairly be imposed as an obligation on this development when and if it comes forward.

9.3 Stages 6 and 7 of the CLLR are not required to access the NBP but are necessary to complete the road as originally envisaged and included in the Local Plan. Gazeley will make a contribution towards these stages and the County Council and Eastleigh Borough Council will take responsibility for its implementation at a time when funds are available. If an unreasonable amount of time passes before the scheme can be implemented, say five years from payment, then the contribution will be returned to Gazeley.

9.4 It is considered that a new Agreement with Heads of Terms as described above will be in the County Council's best interests in terms of future actions and financial commitments.

7326/CJW