Developers seeking to halt works on the former Peterborough District Hospital site due to money difficulties have been granted a reprieve worth hundreds of thousands of pounds.
Lands Improvement Holdings will now pay £219,000 less on their Section 106 agreement with Peterborough City Council to build 350 homes on the site, and 15 per cent of the properties no longer have to be affordable homes.
Councillors begrudingly agreed on Tuesday to change the Deed of Variation for the S106, but not before they criticised the developers who had received permission to build the homes in Thorpe Road 14 months ago.
Councillor Nigel North said: “I feel like a gun is being held against our head a little bit. Why should people who come in speculatively to make money not pay for their own mistakes?”
Cllr David Harrington said: “The ethics of it I think stink. They are trying to pull the wool over our eyes.”
Lands Improvement said S106 relief was needed after the costs of demolishing the former hospital had increased by £1.4 million, in part due to an unforeseen asbestos risk and added security as the site has been targeted by vandals.
It also claims that offers to buy the homes are £3 million less than the valuation they had been given by property consultants Bidwells.
Cllr Ann Sylvester asked how homes not far from London and near a railway station, bus centre, school, supermarket and shops were now less in demand. She said her cat could flog a house in those conditions.
Cllr Wayne Fitzgerald defended Lands Improvement which he said were brave to develop the site. He added: “The market has changed. This is not some fat cat developer taking advantage of the council. Planning officers have looked at the books.”
Kevin Moriarty, managing director of Lands Improvement, which bought the site for £7.7 million, said: “This site was stagnant for many many years. Despite the huge challenges we have made significant progress.”
Cllr Ed Murphy, opposing the change, questioned whether house prices had actually reduced and called on the council to see if there were alternative uses for the site.
Under the new terms, the £1 million off-site S106 payment will now only be paid after occupation of the 300th home, with councillors kept updated on the situation.
Cllrs Harrington, Sylvester and Stephen Lane opposed the S106 change. A new school, which will take over from West Town Primary, will be situated next to the homes.
A Lands Improvement spokesman said: “We can now look forward to completing the demolition and remediation of the site.”