A property developer whose York apartment building turned into a “nightmare” has been allowed to slash the amount he contributes to affordable housing in the city by more than £1 million.
Councillors reluctantly agreed to allow Marc Black and his company Modernistiq Developments off paying half of the section 106 agreement money on the block of 62 apartments off Eboracum Way.
Mr Black bought the site after planning permission was granted in 2020 and originally intended to turn it into a student housing block.
But construction has stalled after what he described as a string “bad luck”, including the Covid pandemic, partners and contractors either pulling out or going bust and unforeseen site costs – as well as spiralling inflation increasing the build cost.
“I’ve been doing this for 25 years,” he said. “I got through the 2008-2009 crash, just. I’ve never had anything like this in my life.”
Section 106 agreements, signed between planning authorities and applicants, try to ensure that developments also benefit the local community.
Mr Black was obliged to pay £1.9m in affordable housing contributions, but said the project would not be viable unless this could be decreased to just over £880,000. The calculation has been supported by an independent review.
Mr Black said he just wanted to make the money back he had put in and claimed the building would likely be turned into a hotel if he couldn’t finance the project.
“I’m not here begging,” he said, adding that he was having issues on sites across his portfolio due to construction inflation.
“We’re not thinking we want to be greedy and get some more money out of the council or make more profit,” he said. “Out there it’s the most horrendous time I’ve experienced in years.”
He claimed sales were poor due to fears of a housing crash, and said young people now preferred to live “in the sticks” over the city centre.
‘Smattering of blackmail’
Mr Black’s case drew little sympathy from councillors, though most agreed it was better to have some affordable housing cash rather than none. The council will also be able to claw back money if the developer makes more profit than expected.
But Cllr Michael Pavlovic said: “It’s the nature of capitalism – you make bad business decisions, you lose money. It is not the council’s job to bail bad business decisions out to the tune of a million quid.”
Cllr Janet Looker said they were given “a sob story” with “a smattering of blackmail”.
“We’ve been hearing at the Conservative Party conference that if we don’t enjoy and take the risks of market capitalism, we all turn into terribly difficult people and make England a terribly bad place,” she added.
“Where do we finish? Do we end up giving everybody a couple of million just to say ‘oh, please, please get on and build’?”
Both said they did not believe claims the only viable alternative was a hotel or student block, and questioned whether a social housing provider could take over.
Cllr Nigel Ayre said he believed Mr Black was not making money off the scheme, adding that a bank repossessing the site would not be a good outcome.
He said: “It is the people of York and the council who lose out, but that is the nature of capitalism. The capitalist will always gain from that system and we will lose – we can’t change that overnight.”