Process to find developer for multi-million pound housing project yields one bid

Ted Peskett, local democracy reporter

A council’s procurement process aimed at finding a developer to take on a multi-million pound project to build hundreds of new homes, has yielded just one bid.

The redevelopment of Channel View to provide more affordable housing in Grangetown, will see the 180 existing properties on the estate, including a 13-storey tower block, replaced with 320 new homes.

A report providing an update on Cardiff Council’s search for a partner to develop the project alongside was presented to members of the local authority’s community and adult services scrutiny committee on Monday, September 18.

Development and regeneration operational manager at Cardiff Council, David Jaques, said it was a concern to the council that it only had one bid back by the close of the tender returns deadline on August 24.

He added: “We are trying to understand why other bids did not come forward. 20 entered. We held an open day session online… we gave an overview of what Channel View was all about and we had some interest.”

The redevelopment of Channel View was approved in December 2021 and the the council began its search for a development partner after cabinet approved the start of a procurement exercise in March 2022.

The original plan was to appoint contractors to each phase of the development. However, this was later changed to an approach which will see one developer partner deliver the entire project.

Complexity

Mr Jaques said that the complexity of the development, which will require the construction of homes for sale as well as council homes, presented a level of risk that some potential bidders were not comfortable with.

He added: “I do think it is a reflection of the complexity of the project and the current market conditions.”

A report presented to scrutiny committee members also put the single bid down as a likely “reflection of current market conditions”.

The estimated cost of the project has risen from a projected £60m in 2020 to about £85m in 2022.

Cardiff Council’s report on the project added: “Whilst the tendered price is higher than anticipated, there are a number of factors that have impacted on overall costs.

“However, the project can still be delivered within the existing budget framework subject to post tender due diligence which may result in future projects being put on hold.”

The development of the project will commence with Phase 1, which will see 81 flats for older people replace the tower block at Channel View.

It is hoped that the development will help the council move a step closer to achieving its housing targets.

There are more than 7,600 households on the local authority’s combined housing waiting list and homelessness in the city continues to rise.

Cardiff Council’s Housing Development Programme aims to deliver 4,000 new homes to the city, 2,800 of which will be for council housing and 1,200 as homes for sale.

Milestone

Cardiff Council’s cabinet member for housing and communities, Cllr Lynda Thorne, said: “This is an important milestone in our exciting plans for Channel View and the next step in transforming this part of Grangetown into a greener, more sustainable and more attractive neighbourhood for the community.

“The scheme is a major part of our plans to increase the availability of good quality, affordable housing for the city by delivering more than 2,700 new council homes over the coming years.

“There are various due diligence processes that need to take place that will enable us to move to the delivery stage of the redevelopment.”

Cabinet members will be asked to approve the appointment of the bidder at a meeting on Thursday, September 21.