Weymouth and Portland Borough Council is extremely disappointed that it has had to end its contract with the prospective purchaser of North Quay, a subsidiary of Acorn South. This follows a number of attempts to complete the sale in accordance with the contract.
Acorn recently issued a press release which contained a number of inaccuracies which the Council wishes to correct.
Background
The Council offered North Quay for sale on an unconditional basis. This means the sale was not subject to any particular planning consent being secured. Acorn submitted the highest unconditional bid, and as such was selected as the purchaser for the site. Contracts were exchanged in September 2016, binding both the Council and Acorn into a sale which had no planning conditions.
Acorn has sought to use permitted development rights to facilitate redevelopment of the existing building. The Council – as the planning authority, having taken advice – has concluded that change of use of North Quay requires a planning application. Acorn have appealed to the Planning Inspectorate about that conclusion.
The Council would expect any developer to carry out due diligence and establish key details such as planning status if that is an essential element of its strategy for the site. This would be expected prior to exchanging contracts.
Planning Status
Council records show that Acorn was advised of the planning status at the bidding stage. It is clear however that Acorn did not engage in further discussions with the Council on planning matters before exchange of contracts.
At no time did any officer from the council offer any verbal or written assurances to Acorn that the existing building could be converted to residential use without specific planning consent. Any such assurances simply would not feature in contract negotiations with a developer.
Missed completion dates and lack of planning applications
The Council and Acorn exchanged contracts in September 2016. The agreed completion date was 31 July 2017. In this time, Acorn had 10 months to engage with the community and elected members and communicate its vision for the site. It also gave them time to apply for planning permission for their proposed development. Acorn failed to do any of this. Only in August – a month after completion was meant to take place – did Acorn commence the process of seeking change of use consent.
Failure to complete
Having failed to complete the purchase on 31 July, the Council gave Acorn another deadline of the 15 September to allow them to complete. This deadline was again missed.
As a result of Acorn’s failure to complete despite additional time – and its lack of progress with planning – the council has lost all confidence in Acorn’s commitment to the sale, and their ability to complete.
Council will counter claim
It is regrettable that Acorn has commenced legal proceedings against the Council for misrepresentation of the sale. The Council is extremely disappointed with Acorn’s handling of the matter and will be vigorously defending its claim. The Council is confident of our position. In addition, the Council will be counter claiming to recover earlier and ongoing costs associated with Acorn’s failure to complete on the property.
The Council is now in a legal process and it would be inappropriate to comment further. The Council’s goal remains to secure development for the site to support the town and local economy and work will continue to do that.
Acorn’s submission was the highest unconditional offer in line with our agreed procurement framework at that time. Our members will now review the options for moving forward and we will communicate this in due course.
