Developers could axe plans for new Bucksburn flats on the site of Aberdeen’s demolished Chalmers Bakery unless the council surrenders a £200,000 deal.
Cater was given the go-ahead to build 17 apartments just off the A96 on Auchmill Road about four years ago.
Despite tearing down the bakery and fencing off the land, construction work has never begun.
Now, bosses have lifted the lid on their battle to commence building – and pleaded with the council to waive a staggering £214,000 due to be paid into the public purse as part of the project.
What were the plans?
In 2021, Cater said the 17 planned Auchmill Road flats would “provide much-needed, high quality residential stock to Aberdeen”.
The complex would be built across three storeys, with a garden to the front and its own rooftop terrace.
Building documents previously indicated the flats would cost £1.4 million to erect.
Why might axe fall on Bucksburn flats plan?
Four years on, a lot has changed, with rising construction costs throwing various projects into turmoil.
And Cater has now submitted a “viability report” to the council, explaining the firm’s current dilemma.
That initial £1.4m construction cost estimated in 2021 has risen to around £1.9m.
Experts reckon that each flat would be worth between £155,000 and £210,000, noting that the location off the A96 means “lower prices are inevitable”.
If they were all sold, that would net the developer £2.835m.
But the costs of carrying out the work would be so high that the money recouped would not be worth it, surveyors say.
One particular stumbling block, they add, is the £214,000 owed to the council as part of the developer contributions deal when planning permission was granted.
What are developer contributions?
This sum is a requirement of all major projects.
The money is typically injected into things like GP surgeries, roads and schools to help them cope with the added population in any given area.
In the case of these Bucksburn flats, the money was agreed to go towards Bucksburn Academy, a planned health centre at Newhills, path improvements and Northfield Community Centre.
And under rules on affordable housing, the developers would be sacrificing £148,750.
Altogether, this would leave Cater paying out £213,979…
Where does the council come into it?
Emails reveal that Cater boss Steve Choi got in touch with the council’s senior housing strategy officer Mel Booth in February in a bid to keep the plans alive as costs spiralled.
Mr Choi admitted: “To be honest, the site has remained dormant since the demolition over two years ago.
“Despite my efforts, the significant rise in construction costs, coupled with over £200k in developer contributions, has rendered the project financially unviable.”
Despite being “eager to move forward”, Mr Choi said he has “struggled to secure lender support over the past two years due to these challenges”.
He added: “I was wondering if this is something Aberdeen City Council might consider supporting as part of a social housing initiative.
“I’d greatly appreciate your insights on this matter.”
‘Sorry!’
A week later, the housing boss replied to say this is “not something ACC would be interested in”.
The official explained that the local authority had just completed around 100 council houses elsewhere on Auchmill Road.
She added: “Flatted developments are not what we are looking for at the moment and is unlikely to get much interest – sorry!”
Do Bucksburn flats face the axe?
The documents Cater has submitted to the council following this rebuff indicate that the plans are now on a shoogly peg.
Allied Surveyors Scotland say: “Given the actual cost of the site, this renders this scheme unviable even with a lower than standard developers profit.
“The scheme cannot be developed.”
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However, they say it “may be possible, with careful cost management” to proceed if developer contributions are waived.
They add: “At the level negotiated, this scheme is unlikely ever to attract the necessary development finance.”
The local authority is yet to advise on whether this is something that could happen.
You can see the application on the Aberdeen City Council website. It comes as plans to expand Bucksburn with 435 new homes move forward.
Abandoned Aberdeen
The Bucksburn site has been listed as just one of many among a growing epidemic of vacant and derelict spots across Aberdeen.
As things stand, it looks like it will still be on the register this year too.
We had a look at how the amount of abandoned land in Aberdeen has grown over the past eight years.
There are 32 more recorded derelict or vacant spaces than in 2016.
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