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Princes Parade - Report to Cabinet

You will probably be aware that the Leader of the District Council (FHDC) “paused” the development scheme at Princes Parade on 1 November because of the current economic uncertainty; significantly increased project costs (now estimated to be between £47m and £49m); significant and unforeseen increases in borrowing costs from 2% to nearly 5%; and, substantial increases in utility costs affecting the running costs of the leisure centre. The pause decision required a report from Officers on future options in light of the current economic climate. This report will be discussed at a Cabinet meeting next Wednesday – 14 December. The full report, some 30 pages, can be found at Cabinet Report It is the last item on the Cabinet agenda.

This development scheme is probably the largest development scheme in Hythe for many years and HCS believes that it should make comments to the Council – particularly as the scheme is not universally welcomed in Hythe and that there is an increasing large financial cost to council tax payers.

Officers are suggesting that there are 3 options as follows:

1 Continue with the project, noting the changed financial package. This would see the delivery of the new road, new leisure centre, housing and public space improvements. The scheme needs to be affordable to FHDC by reducing the overall cost of the project either by reducing build costs, increasing land sale receipts or reducing FHDC borrowing requirements, or a combination of all 3 elements. More information is contained in section 4 of the Cabinet report.

2 Do just the necessary works to implement permission. This would require all outstanding pre-commencement planning conditions to be satisfied and the planning permission implemented. More information is contained in section 5 of the Cabinet report.

3 Stop the project while future land uses are considered. An immediate stop to the project while more detailed work on future land use options was undertaken. There would be an immediate financial cost to FHDC in cancelling the scheme. There would also need to be an assessment of any legal requirement to remediate the known land contamination. Further information can be found in section 6 of the Cabinet report.

The Cabinet report concludes that “the Princes Parade Project is a complex project that has been developed over many years and it is now facing numerous risk areas triggered by external economic pressures. Specifically, in this financial year alone, the project has needed to contend with significant inflationary pressures on project costs and supply chains, the rapid rise in utility tariffs, and increased cost of borrowings. At the same time these factors have also greatly impacted on the council’s own budgets and its ability and resilience to absorb any financial risk within its general Fund”.

This is a huge decision for FHDC to make in light of the current economic and financial climate which is not yet stable. The financial viability of the proposed development will impact on council tax payers for however long the period of the borrowed capital. Yet the proposed development will bring to Hythe a much needed and modern leisure centre; some 45 “affordable” houses and some 105 open market houses at Princes Parade; the re-development of the existing pool site in South Road for housing; plus some commercial development – hotel and restaurant/café at Princes Parade.

This is clearly a summary of the Cabinet report which you are recommended to read in full to obtain the complete picture.

Please feel free to comment to any Cabinet member (contact via ) by last thing on Tuesday 13 December. Please also comment to HCS at by last thing on Monday 12 December so that HCS has the time to combine your responses into an HCS response to FHDC.

Crispin Davies


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