A LEAKED report reveals the Royal Borough Council could lose out on millions of pounds as the land value of the former Magnet Leisure Centre plummets within two years.
The Local Democracy Reporting Service has seen a confidential report that suggests the value of the site, known as St Cloud Way and is earmarked for 434 homes, has sunk by £11m within the last two years.
An independent valuer, Carter Jonas and Johnson Associates, reviewed the site and found due to Brexit, Covid-19, and inflation, the land near Maidenhead town centre is only worth about £15.75m.
The council, which owns the freehold of the site, was warned the value may sink by a further £6.5m if development does not start by mid-September.
In 2020, the construction cost was estimated to be £93.7m, but the surveyors found that this has shot up by £14.8m.
The plans, which are a joint venture between the Royal Borough and developer Countryside, were approved by a Maidenhead planning panel last year despite a 1,700 strong petition and being described as a “prison village”.
In 2017, St Cloud Way was valued at £38m, but reduced to £28.2m three years later. In 2021, the land value dropped by a further £2m.
The council was planning to sell the site to Countryside once everything was signed off for the huge housing development to begin.
St Cloud Way is expected to be developed in early September and plans to finish construction by spring 2025 with initial sale of the homes commencing in late summer of 2024.
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Split into two phases, Countryside planned to build 264 private homes and 87 affordable homes, which include 33 social rent and 54 shared ownerships, during the first wave and a further 83 flats during the last stage.
The land value is split between the two phases. The first phase of land payment for the Magnet Leisure Centre is £8.2m and the second phase for the now demolished Ten-Pin Bowling site is £7.55m.
Within the report, Carter Jonas states it does not think the value reduction is “reasonable,” as some of the costs, such as the developer contribution fund (S106), were “clearly anticipated.
It added: “Other areas such as general build cost inflation may be considered by the council to be less acceptable.”
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Despite the decreased value, officers still recommended that senior councillors approve the sale of the land for £15.75m in order to enable the regeneration of Maidenhead and deliver affordable homes.
A council spokesperson said: “The council cannot comment on commercially confidential matters. In terms of the capital programme, the council holds a wide portfolio of capital investment and borrowing to support public priorities, which is managed in the best interests of public finances over the long- to medium-terms, as market and economic conditions fluctuate. This is separate to the annual revenue budget that supports day-to-day services.”
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