A development agreement between a council and St Modwen Developments, intended to bring forward decade-old plans for mixed-use regeneration of a Newbury industrial estate, is under challenge at the Planning Court.Rival developer Faraday Developments, which itself has planning permission to redevelop the London Road Industrial Estate (LRIE), is asking a judge to quash the development agreement entered into by West Berkshire District Council last September.
Faraday says that the council has failed to have regard to its duty to obtain “best value” for the disposal of its land interests, and has granted impermissible state aid to St Modwen.
It alleges that the council “moved the goalposts” in accepting a bid from St Modwen that did not comply with an important requirement of the tendering process, namely to provide for a 250-year ground lease of the whole LRIE.
And it says that the council failed to undertake a process of public procurement as required by the Public Contracts Regulations 2015.
Lawyers for the council and St Modwen argue that the agreement is lawful and should be upheld. They say that Faraday’s challenge is a commercial tactic brought by a disappointed rival.
The council, which is freehold owner of plots 1-26 of the LRIE, has been looking to redevelop and regenerate the 25-acre site since 2003.
Faraday, which holds long leasehold interests in three plots, secured planning permission in 2009 for a mixed-use development, including offices, retail, a hotel, motor dealership and residential apartments.
However, following a strategic feasibility study, the council ceased lease negotiations with Faraday and began the tendering process for a single development partner to bring forward phased redevelopment of the LRIE. Faraday submitted a bid, but St Modwen’s was preferred.
Mr Justice Holgate is expected to reserve judgment.
