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Developers 'would shun town over tax'

By Cornish Guardian  |  Posted: April 03, 2013

By Hollie Bone

OUTRAGEOUS TAX:   Tom Carr and Richard Pearce from The Verto Group.

OUTRAGEOUS TAX: Tom Carr and Richard Pearce from The Verto Group.

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A NEWQUAY developer has said he will not invest in the resort again if a new development tax is introduced.

The Government is providing the Community Infrastructure Levy (CIL) to help local authorities offset the impact of development.

It is intended to eventually replace Section 106 agreements – money given by developers to build infrastructure.

A draft map shows developers in Newquay could be forced to fork out up to £100 per square metre. This compares to some areas such as the Clay Country region where it costs nothing.

However, Richard Pearce, 29, director of the Verto Group – behind Newquay's Cedars Hotel redevelopment and previous successful developments at both Mount Wise and of the old Penhallow Hotel – said the charge, which is currently in consultation, was "outrageous".

He said developers would look elsewhere to build because they would not make any profit in Newquay.

"At £100 per square metre we certainly would not be doing anything else in Newquay," he said.

"I have spoken to some of the other guys building in the town and they all say the same thing. It is difficult enough there as it is.

"If you think the average two-bedroomed flat is 75sq m, that's £7,500 per flat, so if you have ten flats, that's £75,000; there's not the money there. At the Mount Wise development we paid £60,000 in Section 106 money for 14 flats. Add another £75,000 on top of that and we would make a loss. There is that little money in it as it is.

"People will simply look elsewhere. Developers are going bankrupt left, right and centre. Doing something like this is purely going to deter developers and the council is going to fall flat on its face. It is the locals that will suffer."

However, John Fitter, Cornwall councillor for St Mawgan & Colan, said, unlike previously with Section 106 money, only around 25 per cent of the CIL will stay within the town where it is generated, while the rest will be put into a CIL central pot.

He said it means neglected areas in Cornwall will also be able to benefit from developments in the county, even if that development was not in that particular area.

"I think in the year 2013 we are one Cornwall and we have got to think about what is good for one Cornwall," he said. "It does not help anyone if we have areas of decay or neglect."

For more on the proposed CIL, see page 27.

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  • gc111  |  April 05 2013, 4:19PM

    Why is a newspaper being the PR company for developers? The funds raised will be used to improve roads, schools, sports facilities etc that extra development puts more pressure on. The developers will negotiate a lower land price to take account of CIL. Various govs for 60 years have been seeking a mechanism to capture a small proportion of the the uplift in land value that takes place when the community grants planning permission.

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