The Essex local authority said it is committed to delivering the project and is working with Homes England and other investors to find “alternative delivery options” after funding difficulties
Thurrock Council has insisted it has not abandoned its £1.4bn Purfleet-on-Thames regeneration plan despite terminating a development agreement for the project.
The Essex authority has confirmed it has ended a development agreement with Purfleet Centre Regeneration Limited (PCRL), a joint venture between Sanctuary Housing and Urban Catalyst, to deliver the project.
This follows PCRL finding it difficult to secure additional funding for the scheme.
In September last year, Homes England warned that it was set to withdraw £75m for the project due to PCRL’s funding delays.
The local authority agreed to mutually withdraw from the grant agreement with Homes England, meaning it avoided having to pay back the £25m in grant funding already spent on the Purfleet-on-Thames scheme.
Ben Maney, cabinet member for regeneration and highways at Thurrock Council, said: “Despite efforts by PCRL to secure funding it was clear that this could not be achieved on terms that were satisfactory to PCRL shareholders or Thurrock Council so we have now, with the agreement of the PCRL Board, terminated the development agreement.
“The project has not been abandoned, the council remains committed to delivering high quality regeneration in Purfleet-on- Thames with the supporting infrastructure, town centre and station improvements, and this decision now allows us to move forward and consider alternative delivery options. We are working closely with Homes England and potential funding partners and intend to bring options before Cabinet soon.”
In a Thurrock council report dated 28 September, it said that “PCRL has consistently struggled to obtain funding (debt and additional equity) for the project and this has been its main obstacle to unlocking delivery.”
The report said it was probable that only 34 homes on the site would be completed by the end December 2023.
The council’s “large-scale” redevelopment of Purfleet-on-Thames has the potential to deliver 2,850 new homes.
Work started on phase 1a of the scheme in March 2021. Sanctuary became involved in the Purfleet regeneration project when it took over original developer Swan, and has confirmed that it will develop phase 1a of the regeneration scheme, which will deliver 61 homes.
It is understood that another business will need to be found to replace Urban Catalyst to deliver this phase.
>> See also: What happens to housing development plans when a council goes ‘bankrupt’?
>> See also: Sanctuary and Johnnie Johnson boards approve merger
In December 2022, Thurrock council issued a s114 notice as it faced a budget shortfall of £470m. At the time, the council said that spending controls would “need to remain in place for the foreseeable future and at least for the remainder of 2022-23 and 2023-24”.
A spokesperson for Sanctuary said: “We can confirm that the development agreement between Thurrock Council and Purfleet Centre Regeneration Limited (PCRL) has been terminated.
“Sanctuary has committed to the completion of the active phase of the development, which will deliver much needed shared ownership and affordable housing for the people of Purfleet.”
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