The ‘unviable’ luxury flats and missing community payments in Nidderdale

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The conversion of a 14th century flax mill near Pateley Bridge into 50 luxury flats has highlighted how residents lose out in the planning system.

The decade-long saga has seen community payments reset and raised questions about whether developers are being held to account.

Glasshouses 123, a subsidiary of Newby Homes, began a two-phase conversion of Glasshouses Mill in 2016.

The developer agreed to pay £264,000, including £135,960 to Glasshouses Community Primary School as part of a Section 106 legal agreement to compensate for the impact of development.

All 30 phase one flats were built and sold but the first two Section 106 instalments did not materialise.

North Yorkshire Council put the brakes on phase two and the project remained in limbo for years. But in April this year councillors reset the Section 106 payment schedule at the developer’s request.

How was this allowed to happen? 

Residents raise concerns

The Stray Ferret visited the former mill to speak with members of Glasshouses Mill Owners Association.

Flat owners set up the association to ensure developer commitments associated with what were marketed as ‘luxury’ flats were honoured.

Co-chair Bill Fraser describes “wading through” hundreds of planning documents “on a line-by-line basis” on issues such as railings, lighting, paving stones, walls and flood defences to resolve discrepancies.

Then, despite not knowing what it was, he came across the Section 106 agreement “buried in the detail”.

The document set out what the developers were expected to pay: besides the £135,960 for education there was £51,758 for open spaces and £63,170 for village halls.

Andy Totten, another association co-chair, said:

“People then started to realise that they hadn’t enforced the legal agreement, and they started asking questions of the developer, who responded by saying that he couldn’t afford it and that they were about to submit a revised planning application for the next phase of the development, which is when we will make some money and we’ll be able to afford to pay you the Section 106 money.”

‘A real mess’

Glasshouses 123 claimed soaring costs due to issues such as covid and Brexit had turned the scheme into a “money pit”.

A controversial power granted by the government in 2012 allowed it to reassess the commercial viability of the development.

Its viability assessment concluded the scheme would produce developer profit “within the 15-20% range”, which was still “technically viable”, according to North Yorkshire Council.

Yet the council’s Skipton and Ripon planning committee supported the “pragmatic” approach of resetting the Section 106 payments to break the deadlock.

Consent could hardly have been more grudgingly given. Green Party councillor Andy Brown told the meeting: “We’ll be left in a real mess if it doesn’t go forwards,” while Conservative Cllr Robert Heseltine said it was “disturbing” that planning conditions had not been enforced. He added: “It feels like we’ve been conned all the way down the line.”

The spectre of costly legal action also loomed above councillors. North Yorkshire’s lack of a local plan makes it difficult to resist development. A council officer’s report acknowledged “this weighs heavily in favour of the proposal”.

Developer profit, government policy and the threat of legal action led to the changes.

A report to councillors before the meeting said the new agreement would see Glasshouses 123 pay £139,359 towards education before the first house in the second phase of construction is occupied, £61,800 towards open spaces and £63,170 towards the village hall ‘prior to the occupation of the 42nd dwelling’.

The sums are similar to those in the original agreement but Glasshouses 123 was freed from its obligation to include a village shop in the development, and allowed to build two extra homes to make the scheme more profitable.

And it kicked the can down the road on the community payments by years.

‘I’m fed-up with it’

Chris Hawkesworth, who bought Glasshouses Mill in 1971, is a director of Glasshouses 123. The five-times former mayor of Pateley Bridge says he has not made any money from the project primarily because the mill is a listed building and the land was contaminated with asbestos:

Mr Hawkesworth also highlights how, although he “personally did not negotiate it”, Glasshouses 123 was allowed, in accord with government guidance, to postpone Section 106 payments during covid.

Flat owners think the system works against residents. Mr Fraser says the ‘pay later’ nature of Section 106 enables developers to avoid commitments.

“The bigger scandal,” asserts Mr Totton, is that North Yorkshire Council’s enforcement officer “has not enforced legal agreement and the council has been afraid to go to court to enforce it”.

‘It’s a cash-flow issue’

How rigorously councils enforce Section 106 agreements is a major concern in the context of the anticipated biggest spike in housebuilding in the post-war era.

Yet it’s virtually impossible for residents to hold them to account by tracking payments, let alone have a say, in a system almost devoid of transparency.

When we asked the council to confirm the Glasshouses Mill education sum, it said it was £83,320, not the £139,359 quoted in April’s council report. It added: “The figure of £139,359 is quoted in a subsequent application, which has not yet been approved.” The local councillor was unaware of this. Confusion reigns.

So does controversy: Pateley Bridge Town Council was told by Mr Hawkesworth in March that the first new Section 106 payment for education would be made “the minute the first spade hits the ground” on phase two of the development. But that now appears to be "prior to the occupation of the 33rd dwelling".

The town council has noted its “concern” at this discrepancy. Mr Totton was more forthright, describing the likely 15-year gap between the start of building work and Glasshouses Community Primary School receiving any money as a “national scandal”.

Simon Hepden, director of Newby Homes, said he couldn’t share details as he was in the midst of negotiating a legal agreement.

And although planning permission for phase two of the mill redevelopment was granted in April, listed building consent – required because the mill is a grade two listed building – has yet to be granted.

“I understand there’s one or two new conditions coming in,” says Mr Hawkesworth. “I don’t know what they are but if the new conditions are such that it costs more money, we will have no option but to renegotiate the Section 106. It’s a cash flow issue.”

So the long-running saga may not in fact be over.

Look for the final part of our Section 106 series this weekend.

Our investigation into Section 106 agreements is supported by the Public Interest News Foundation, which promotes the value of independent local news providers.