Council to seek Tweedbank development partner...next year

by LESTER CROSS

The quest to identify a development partner for the £108 million expansion of Tweedbank will begin in earnest during 2024, more than five years after Scottish Borders Council acquired the 110-acres of land for the project by paying the landowners £9.6 million. 

A land audit produced by the local authority in 2019 included a housebuilding timetable for the site on Lowood estate, alongside Tweedbank village. The first 30 houses from a total of around 300 would be delivered in 2023, according to the audit. But the building programme is already well behind that particular schedule.

Last Friday, SBC published a so-called PIN [Prior Information Notice] on the Scottish Public Contracts website. It revealed that the council would be "inviting interested parties to participate in a market research exercise which will inform the development of the procurement approach to appoint a Development Partner to work with the Council to deliver its Tweedbank project."

The notice explained the Tweedbank project consisted of the development of 34 hectares of land adjacent to the existing settlement of Tweedbank over a 10–15-year period.

According to the PIN it is anticipated that the project will deliver: Infrastructure - road access with active travel links Energy - a heat and energy network with renewable generation. Homes - approx. 300-400 homes of varied size and tenure. Care facilities - a 60 bed care village. Community facilities - including a community centre and play park. Business - business and innovation space to support local economic development.

The notice adds: "This market consultation exercise is an exciting opportunity for potential bidders to participate in shaping the Council’s procurement strategy and gain insight into the proposed development strategy. Estimated date of publication of contract notice: 26/02/2024."

But the entire project will have to rely on extensive external investment.

And Borders councillors were told in March that since a report prepared by estate agents Savills, the economic climate had continued to remain uncertain. 

"There has been continued and significant inflationary increases on construction costs, alongside rising interest rates, making borrowing and servicing debt more challenging", warned a document drawn up by council officers. "Both factors have consequentially impacted the housing market hampering action to accommodate increasing demand for homes across the Scottish Borders and in particular in the Central Borders."

 Alongside Savills advice, site soft market testing was undertaken with three established developers in August 2022. They agreed that the Lowood estate was a unique development opportunity but up-front funding and delivery of key infrastructure (access road, power and drainage) would be critical to success. 

Those unnamed developers had agreed that development should be phased to reflect the market conditions and highlighted a number of opportunities to improve the zoning and delivery of the Tweedbank scheme.

"All three developers expressed interest in providing further development advice potentially as a development partner. It is recognised that to enable development to progress, Scottish Borders Council need to take action with public sector partners to de-risk development by forward investing in key infrastructure. On greenfield development sites, the logistics and costs of enabling infrastructure is a significant factor in development appraisals, typically accounting for 15- 25% of the overall development cost."

Based on the total estimated cost of £108 million, the council could be faced with infrastructure costs ranging from £16 million to £27 million.

SBC's Delivery Plan for the Tweedbank expansion involves the development of a procurement strategy in order to secure a development partner. 

"This is likely to be a two-stage procurement. During the first stage, they would work with the Council through the pre-development period to progress the design and further technical work as well as exploring a range of commercial and delivery options.

"The first stage is likely to include a detailed access and transport assessment, site investigations, utilities and servicing strategy and will lead to development project plan and phasing strategy, cost plan and finally a revised business case."

The recent report to council explained: "The revised business case is necessary due to the change in market conditions and to support any future funding bids given the significant funding shortfall. Following approval by Scottish Borders Council, the revised business case will be submitted the Edinburgh & South East Scotland City Region Deal and is likely to seek funding support towards business and housing infrastructure.

"Following completion of the business case, subject to securing appropriate and affordable funding, and on agreement of both parties, stage two of the development partner procurement would move to a phased development and delivery stage, beginning with the construction of primary roads and services infrastructure as part of the ‘Infrastructure First’ approach proposed."