The Maidenhead (Nicholsons Shopping Centre) CPO and stakeholder engagement requirements

Thank you for keeping up with “Compulsory Reading” and, in particular, our blogs on the Vicarage Field decision in October 2022. It’s a new year and there’s another refusal to confirm a CPO for us to talk about. If the decision on Vicarage Field was a surprise, the refusal of the Nicholsons CPO perhaps sounds the death knell for regeneration CPOs, at least in the absence of judicial or new Government guidance.

“A series of attractive, interconnected outdoor streets, small yards and squares…”

Introduction

On 3 January, planning Inspector John Felgate issued his delegated decision not to confirm the Royal Borough of Windsor & Maidenhead (Nicholsons Shopping Centre and Surrounding Area at High Street, Queen Street and King Street, Maidenhead) Compulsory Purchase Order 2022 (why are CPO naming conventions so unwieldy?). Regrettably, unlike Vicarage Field, there is no online document library but the CPO, maps and statement of reasons can be found here. You’ll even struggle to find a copy of the decision through an internet search. It really isn’t good enough that knowledge of important decisions like this are disseminated only through Linkedin or personal contacts. DLUHC are looking to set up an online database of CPO decisions – the sooner, the better.

In the Vicarage Field decision, the Inspector’s primary reason for refusal was that she could not be satisfied that the scheme was viable and would be delivered. She also considered that inadequate negotiations had taken place when measured against DLUHC’s guidance on compulsory purchase (“the CPO Guidance”) although it is unclear whether the Vicarage Field CPO would have failed solely on inadequate stakeholder engagement. The Nicholsons CPO by contrast had no viability issues and failed solely because of its potential effects on objectors Lee and Dean Page who own a nightclub called “Smokeys”. The Inspector considered that the compulsory purchase of Smokeys would disproportionately interfere with the Pages’ right to hold and enjoy property free of state interference. The Inspector also suggested this could have been avoided through adequate constructive engagement on options that could have met the Pages’ “reasonable requirements”.

We set out our views on the decision below but first some details on the scheme and the decision.

The good news

In March 2021, the Council resolved to grant hybrid planning permission for a comprehensive mixed-use redevelopment of the site – most of which comprises the Nicholsons Shopping Centre (an enclosed, indoor shopping mall developed mainly in the 1970s with some later additions). Following the completion of a section 106 agreement, planning permission was granted on 21 October 2022. The approved mixed-use scheme comprises a mixture of retail, leisure, residential, office/business uses and elderly care homes in Maidenhead town centre together with improvements to the public realm and open space.

The Inspector agreed with the Acquiring Authority that the existing, “somewhat mediocre” shopping centre and car park buildings have a negative effect on the town centre’s character, appearance, permeability and connectivity, and fail to offer the types of facilities required in today’s world. The Inspector was satisfied that the proposed redevelopment aligned with the planning framework for the area – it would contribute to improving the town centre’s vitality and bring clear benefits to Maidenhead, and the wider area, in terms of its social, economic and environmental well-being.

Based on the evidence put before the inquiry, the Inspector also concluded that there was no reason to doubt the development is financially viable, the necessary resources are available, and there are no material impediments to the scheme coming forward. In the Inspector’s words, “the scheme would have a good prospect of proceeding“. Cue (small) sighs of relief from the Acquiring Authority in light of the Vicarage Field decision.

A number of viability appraisals were carried out and in some cases these were subject to formal review on behalf of the Council. There were various criticisms of these by objectors. The Inspector noted, however, that the results showed differing levels of profit and return on costs but none of the assessments suggest that the development would be unviable. “There is no requirement for viability to be proven beyond all doubt“, the Inspector considered the matter of viability on the balance of probability.

So far, so good.

What went wrong for the Acquiring Authority?

A total of 14 objections to the CPO were made, three of which were withdrawn prior to or during the inquiry. The Inspector found that none of the other objections carried sufficient weight to justify him refusing to confirm the order but that the objection by the Pages carried enough weight on its own for him to refuse to confirm the CPO.

Introducing “Smokeys”.  A café, then a cabaret venue, and a nightclub since 1995

The CPO proposed to compulsorily acquire all interests in the nightclub’s premises. The Pages are partners in the Smokeys business. The Pages’ main grounds of objection were that no suitable relocation premises had been offered, and that consequently Smokeys faced a threat of extinguishment.

The factors that led the Inspector to conclude that a compelling case for the compulsory acquisition had not been shown were:

1. The role of Smokeys nightclub – A “notable” and “in many ways unique” leisure facility, “part of Maidenhead’s history”, “evidently valued by many” and “seen as an asset to the town”. Loss of Smokeys would have a “significant adverse impact” on the owners, customers, staff (and job opportunities in the youth sector) and performers advancing their careers.
2. Planning status – The nightclub in its current location is compliant with most relevant development plan policy. Another location within Maidenhead or Windsor town centres would equally comply but any premises outside of those town centres would be less preferable, and any location outside of a town, district or local centre would be non-compliant.
3. Personal circumstances – The Pages have worked in the family business for their whole working lives and as well as relying on it financially, it is a central part of their family life. One of the two brothers is a single parent, and the other is a sole breadwinner for a disabled son. Neither brother has any experience in any other industry. The overall impact of the compulsory acquisition on the Pages would be “severe”.
4. Human rights – Compulsory acquisition of the Pages’ existing lease would infringe their right to the peaceful enjoyment of their property. This right is qualified so must be weighed against the wider public interest, having regard to proportionality.
5. Negotiations and engagement – Over a period of three years, the Acquiring Authority and their partners failed to provide the Pages with any viable relocation options to keep their business alive. This, in the Inspector’s view demonstrated “a lack of genuinely constructive engagement”. Three possible off-site relocation sites were suggested but rejected by the Pages with no suggestion that their rejection was misplaced. A flexible unit within the development (“the Broadway unit”) was also put forward as a potential option but the Promoters repeatedly failed to provide plans with the level of detail reasonably requested by the Pages. There were also delays in exploring the issues and constraints relating to the need for the replacement premises to have “like-for-like capability” and include a smoking area.

   It was open to the development partners to consider making provision for Smokeys’ requirements elsewhere within the development by redesigning the Broadway unit to meet the club’s needs or by making provision in one of the other parts of the development. However, following the making of the CPO, the possibility of providing a smoking area for Smokeys at the Broadway unit was withdrawn, no alternative option was provided and instead a new offer was made to the Pages for a financial settlement. The Inspector noted it was not for him to judge the adequacy of the financial offer but he noted that as it was much higher than an earlier one in May 2020, which suggested the earlier one could not have been realistic or provide security for the future of the Pages’ business.

   The Inspector acknowledged that the Pages’ insistence on having a smoking area was beyond what some other operators might require but “the point of the exercise is to relocate the existing business, not simply make generic provision for any nightclub”. Smokeys currently has the benefit of an external terrace, which is evidently well-used. The Pages also could have engaged their own designer but they were not the instigators of the redevelopment and “the job of smoothing the path for [the] development” fell on the CPO’s promoters.

No smoke without fire?

The CPO Guidance makes clear that the Pages were entitled to be treated with respect and to expect a constructive approach, having due regard to their own aspirations for the future of their business.

The Inspector considered that the Pages had been treated in an unsatisfactory way throughout the CPO process with the compulsory acquisition of their interests appearing to be “inevitable from the start”, rather than the last resort required under the CPO Guidance. The CPO’s promoters showed “a lack of care for the Pages’ legitimate concerns”, “a lack of constructive or meaningful negotiation”, and “a failure to take opportunities to mitigate the impact on them”.

At the date of the inquiry, the club had no satisfactory alternative premises into which it could relocate and no apparent prospect of finding such premises prior to the date when vacant possession would be required (or even after that date). The most likely outcome would be that the nightclub would not reopen and be forced to cease trading. The Inspector also commented that there was no guarantee that compensation would leave them in a position equal to which they have now.

The Inspector concluded that it had not been demonstrated that the public benefits of the scheme could not be gained without the need for such a severe degree of harm on the Pages, and interference with the Pages’ human rights would be disproportionate to the public benefits in this case.

What next for regeneration CPOs?

Government policy is that local authorities should be more proactive in promoting CPOs to regenerate their areas. In combination the refusals of the Vicarage Field and Nicholsons Centre CPOs will not help, to put it mildly. Mary Cook and Raj Gupta of Town along with John Sayer of Ardent and Dan Knowles of Sawyer Fielding will be running through the implications of the decisions at a CPT event Why CPOs Fail on 2 February but here’s a few thoughts in the meantime.

• The guidance on what constitutes reasonable attempts to negotiate with owners and occupiers needs to be clearer. It’s obviously impossible to cater for every situation but as we noted in the context of the Vicarage Field decision, the CPO Guidance is unhelpfully vague in setting out what acquiring authorities should do in negotiating with stakeholders. The CPO Guidance goes no further than saying that authorities “should consider… offering advice and assistance to affected occupiers in respect of their relocation and providing details of available relocation properties where appropriate” (our emphasis). The Inspector in the Nicholsons Centre CPO considered that constructive engagement was a pass/fail test.
• Promoters of planning CPOs are really going to have to prioritise engagement. Dedicated case officers who proactively seek solutions. Transparency over timetabling. Offers of compensation that are genuinely reflective of the compensation code rather than a first shot at a negotiation.
• The disparity on the approach of decision-makers in determining whether to grant compulsory purchase powers in planning CPOs and in infrastructure consents is troubling. The detailed scrutiny that the Inspector gave to the negotiations with the Pages is set out in 12 pages of the report while petitioners against a hybrid Parliamentary Bill might get a couple of paragraphs.
• The Nicholsons Centre CPO might appear to be an example of where a conditional CPO would be a way out. But there’s nothing to stop authorities from giving undertakings not to implement a CPO until conditions are met. For example, agreement on relocation premises or on compensation with a dispute resolution process if it couldn’t be agreed.

A CPO is usually the last step in a time consuming and expensive consenting process. For big schemes like this, the authority will have to procure a development partner, negotiate a suite of agreements with the partner and secure a complex planning permission (amongst many other things). How many are going to risk time, money and reputation when there is no clear guidance as to what constitutes reasonable stakeholder engagement.