Draft Charging Schedule

Object

Representation ID: 68044

Received: 10/04/2015

Respondent: Warwick Castle

Agent: Nathaniel Lichfield and Partners

Hotel charging rate:
Continue to have concerns with the proposed figure of £80 per square metre. The Council's response to the representation provided in Appendix 7 to the Council meeting on the 28th January 2015 stated "Not all scenarios can be specifically modelled. The viability study seeks to ensure that overall viability will not be undermined
through CIL. Flexibility has therefore been brought into the Draft Charging Schedule by setting rates substantially below the maximum potential".
The CIL rate appears to have been arbitrarily reduced from £100 to £80 per sq. m. Given that only one example has been examined,the CIL Schedule could set a threshold of a minimum number of rooms to which the charge applies. The example hotel has 130 rooms and this could be the threshold. This would avoid the cost burden on smaller schemes that could make them unviable. If a blanket charge is to apply, appropriate evidence needs to be produced to support the proposed charge.
On this basis, our comments submitted on the document previously still stand i.e.
"The 'evidence' used to arrive at this figure appears to be based on one project (The Waterways, in Stratford). Using one example is inadequate as a basis to assess CIL.
There are further reasons to question whether this is an adequate "benchmark".
1 The Waterways hotel has been developed adjacent to a canal, but in the midst of a relatively low quality environment,dominated by single-storey industrial and retail units. Whilst the hotel is relatively 'attractive', the materials, detailing and uniformity are relatively simple. An hotel in the towns of Warwick or Leamington may need to be of substantially higher quality, especially if the site is within a Conservation Area or the setting of listed buildings. This will add to the costs, potentially both the base construction and external works percentage. These would increase in comparison with those set out in the para. 4.40.1 of BNP Paribas Real Estate Report Viability Study, June 2013.
2 Scale, the single example quoted has 130 rooms. Constructing a building of this size will benefit from 'economies of scale'.
However, many sites in Warwick and Leamington are relatively small and may not be able to accommodate a development with that number of rooms. Accordingly, the costs, per room, can increase and therefore, affect viability.
3 The worked example makes an assumption that some floorspace is existing. The refurbishment cost is given as £50 per square foot. It is unclear what scope of refurbishment is assumed and whether this would be adequate if a listed building is the subject of the refurbishment. Given the substantial number of listed buildings in Warwick the extraordinary costs of such projects should be considered.
4 Allied to point 3 is the issue of 'enabling development'. An hotel development may be necessary to generate funds for the refurbishment/maintenance of 'heritage assets'. The CIL as currently proposed may undermine a project's viability and, if it fails to materialise, the funds will not become available to spend on maintaining a heritage asset(s)."
We consider a more detailed analysis is required before setting any CIL charge for hotels. We would welcome the opportunity to discuss the situation associated with hotel development with you.