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C/o Lucy Kinrade, Murray House, Douglas.
By email
11.10.19
This document is in support of planning application 18/00747/C
The above application is for the change of use of 25 apartments at Cherry Orchard so that all 57 apartments at Cherry Orchard are approved for residential use all year round.
Car parking at Cherry Orchard, Bridson Street, Port Erin
The building consists of 57 apartments and at a frequency of 1 parking place per one bedroom unit and two spaces for apartments with more than one bedroom, the building should have 102 car parking spaces. (12 are one person units)
Cherry can, subject to the latest car park regulations support 90 car parking spaces. To achieve that total a number of new car spaces would be directly outside some ground floor windows which would be neither desirable nor necessary. The attached car parking plan has been drawn up according to a reasonable expectation of need, whilst attempting to reduce inconvenience to as many residents as possible.
The apartments were built for tourist use and are sized according to tourist board standards of 1978. Schedule One details the size of each apartment. There are only 9 apartments out of the 57 that are large enough to accommodate more than two people (whether adults or children). A family of two adults and one child, or one adult and two children cannot live in most of the apartments and eleven apartments can have only one permanent resident. A family of two adults and one child cannot be residents of any of the 25 apartments for which we are requesting change of use. Occupation by families with children is likely to need provision for two or more cars, but that is not our typical resident.
We have re-created car ownership records for the 22 leaseholder apartments since 2013 (Schedule Two). 18% of the leaseholder apartments are one bedroom ones as against 21% of the whole building being one bedroom apartments, so the sample is highly representative. Over the last 7 years on average those 22 apartments have parked 10 cars at Cherry. The year with the greatest number has been this year with 12 cars parked. If the whole building were to be sold to like people there would be an average of (10 * 57/22) ie 26 cars parked by residents. In addition, there needs to be an allowance for people visiting our residents. Our typical resident is well past middle age so the number of visitors is limited. In practice we would be surprised if there were ever 10% of our residents receiving a car parked visitor at the same time. Care staff tend to arrive during the day and visitors in the evening. 10% would suggest the need for a further 6 car spaces, making a realistic total for typical average use of about 32 car spaces. It would not be unreasonable to increase that average total by 50% to cover simultaneous multiple usage, thereby achieving a maximum potential total at any one time of 48 spaces.
We suggest increasing the number of required spaces to 57. That would allow a further 20% margin to insure against potential unseen future changes in car use and will coincide with our leases that grant each
leaseholder one car parking space. Cherry has for at least the last decade had 65 car parking spaces marked out in the car parking areas, plus the 11 spaces along Bridson Street. This has provided sufficient space for car parking in the past and we believe that the numbers above show that it will be more than sufficient for the anticipated reduced future use.
Our marketing will be towards older people, just as in 2001 when the vast majority of apartments were sold to older people. The Cherry Orchard is close to the shops, the bank, the post office, the station, the bus terminal, 5 churches, the library, several cafes and three pubs. All these are close and on the level. Many of our existing residents came to live at Cherry precisely because they did not wish to have a car. Few locations are as suitable for older people who chose to no longer have their own transport, using free public transport, voluntary organisations such as Southern Befrienders and taxis.
The 22 leases presently in place recognize that reality and allow each leaseholder the right to park one car.
There are two large public car parks each within 100 metres of the front doors of the building. These areas are less busy in the evenings so may well be available for the most likely time that friends may visit. Our rates contribute to those parks and we should be able to claim some availability. Furthermore, we sold the public part of the park beside Shoprite to the Commissioners for a peppercorn. It is only fair that this should be taken into account if there is any concern about the provision of car parking.
Again, we were persuaded by the Department of Transport in 1985 to include the car parking along the frontage with Bridson Street as part of the adopted road, so that the public could use it all year round. It would be unreasonable to deny the use of those spaces as part of our allocation simply because of our public-spiritedness.
For many years the hotel and later the self-catering operation, had ancillary activities available. We have allowed those activities to continue taking place in this building, as they add to the amenities of the village whilst we are not needing that space. The pool has been a particularly important facility for the village and it would be a pity to lose it, which also applies to the two gyms operating from the premises. There has been little difference in the usage of these facilities over the years. We are not aware that there were problems with car parking in the past, so do not see why there should be a problem when we will have less users. In the highly unlikely circumstance where residents find difficulty in parking at Cherry, then those operators will be told that meeting requirements concerning the provision of car parking is their responsibility.
We have recently allowed Ken Quine’s shop to be re-located at Cherry. This is a temporary use and we expect it will have ceased by the time we have anything approaching 35 apartments sold/rented.
Presently, the vast majority of the car parking spaces are not being used by residents. The greatest use is by people visiting Port Erin who have nothing to do with Cherry, but as we have so little demand of our own it would be churlish to deny use to others. Otherwise the gyms average four or five cars between them, Ken Quine’s one or two and the pool some half dozen or so.
We have operated for several decades with 22 residential all year-round apartments and 35 off-season residential apartments with swimming pool, two gyms, restaurant, bars (licensed for 200) and for a period a launderette. Throughout that period, we are unaware of an approach regarding our having car parking problems. It is far from obvious why our proposed reduced level of future activity should give rise to any car parking difficulties.
Finally, is it possible that society today is at peak car? Much is talked about car sharing, the increasing importance of public transport, the use of bicycles, the impact of the existing use of cars on climate change, restricting the availability of city centres to cars etc. A majority of our residents qualify for free public transport. That is what we should be concentrating on if looking ahead, not expanding the use of private cars.
As detailed above we believe this planning application demonstrates 57 spaces, all set out following the latest regulations for all 57 apartments.
The pool, the shop and the gyms can use the 11 spaces alongside Bridson Street marked in blue and the 9 spaces which we believe are surplus. (57 provided, less the 48 we believe are actually needed).
The plan shows the position of car parking spaces when the tourist operation was busy, say 2016.
The 8 spaces marked in green were close to ground floor windows and as we now need less spaces it would beneficial for those apartments if we were to release those particular spaces.
The 8 spaces marked in red are to be held in reserve.
We have re-arranged the spaces at the Station Road entrance as this entrance is very popular for residents’ use to provide two disabled spaces.
No apartment has a car parking space outside the apartment that did not do so when the leaseholder purchased their apartment.
The Area Plan for the South, 2013 states “…redevelopment or re-use will not be permitted unless it can be shown that hotel use is no longer commercially viable”. The tourist board have written to the department stating that they accept that the “hotel” is no longer commercially viable.
The hotel was given approval in 2000 to re-develop all 32 hotel bedrooms into 11 permanent flats. This followed discussion with the Tourist Board who accepted that a hotel of our size was no longer viable.
The “hotel” in 2013 had not been a hotel for over a decade. Technically the statement “…redevelopment or re-use will not be permitted unless it can be shown that hotel use is no longer commercially viable” is logically meaningless, as the building was not a hotel, so it is difficult to understand why anyone would believe that the planning restriction applies to Cherry.
Recently the bars and function room have been converted into a shop, without opposition. That has clearly been done in the belief that this is not a hotel, because no hotel in Port Erin could exist without those facilities.
We have provided extensive financial details to the department and to the tourist board demonstrating our failure to operate profitably at Cherry Orchard. In many ways that is not the most important issue as it could be argued that another operator might have performed better. The defining factor is that the Rent & Rates Appeal Tribunal (the Tribunal) has set cost allocations designed to prevent operation of the building for a joint residential/tourist use, that apply to the operator whoever that might be. We appealed those determinations through a Petition for Doleance and having lost at that point, understand that there is no way that those determinations can be changed.
We were asked by the Tribunal whether we were prepared to repurchase the residential apartments. We stated that we were unwilling/unable to do so. After all we had sold them primarily because we believed
that 57 self-catering units were too many in one location given the declining state of Manx tourism. Equally, we did not know whether all 22 leaseholders were prepared to sell and if so for what price, bearing in mind that almost one half of leaseholders had purchased from previous leaseholders at prices far above what we had originally charged for their apartments.
The determinations to prevent viable use of Cherry as a mixed tourist/residential property were;
The self-catering operation (COA) has to provide the swimming pool free of charge to leaseholders but must accept 39% of the cost of energy in the building as a cost for having a pool available to tourists. Apart from the unfairness of that, the pool was shown by meters to use 12% of the total energy. As the energy cost for the whole building was approximately £110,000 per annum the 27% overallocation results in a penalty of some £30,000 pa.
The heating system is a communal one, so identification of individual apartment cost is not available. The court determined that the cost should be divided equally between all apartments. It is obvious that tourist apartments have seasonal use, which effectively means that many are empty during the winter when heat demand is at its greatest. Even when let, tourists are out and about for most of the day, whereas residential apartments are occupied for most of the year and much of the day, especially so for retired people who represent the typical leaseholder. Similarly, electrical costs are to be shared equally, unless in some cases where metered. It is not possible to exactly state the negative impact of this determination, but we estimate that a tourist apartment uses one half as much energy over the whole year as a residential unit. The average cost of £78,000 pa results therefore in a further penalty of £15,000 pa
A 24 hour reception/security service was available for the use and protection of all persons in the building. The 35 self-catering units represent 61.5% of the units in the building. Whilst it could be argued that COA should accept a somewhat greater percentage than that, the tribunal determined that it should accept 85%. Moreover, the role of head receptionist, the most expensive item in that department was not to be included in the total to be apportioned to leaseholders “because she was management”. As the self-catering units were only occupied for 70% of the time it could be argued that 61.5% would have been fair. The cost of this department averaged some £115,000 per annum; the difference between 38.5% of £115,000 (£44,275) and 15% of £95,000 (£14,250) would be £30,025 pa.
Management was to be costed at £9,000 pa for purposes of calculating leaseholders’ service charges, (ie 38.5% of the building paid a total of £3,465 pa). Management staff include a manager, an under manager a book-keeper 4 days a week and the head receptionist (although I have included her in the reception/security department as that is more realistic). We established that a leading provider of those services in the IOM charges £28 per unit per month. That would be £7,392 pa, leaving an undercharge of £3,927 pa.
The result of the Tribunal’s determinations therefore is that COA is unable to charge some £79,000 pa of expenses incurred in the proper furtherance of its duties. (£30,000 + £15,000 + £30,000 + £3,927). In other words, if COA really breaks even it would actually incur a loss of £79,000 pa.
Clauses 6.8 and 6.9 of the Recommendation of Refusal consider the definition of “viability” in planning terms. This is a mis-understanding as the term used in The Area Plan for the South 2013 is “commercially viable” and any assessment of viability should surely be only in terms of commercial viability. Can this property earn a reasonable rate of return as a hotel (not self catering) development of 25 apartments? should be the only question. I have been a chartered accountant for over 50 years and believe it not to be commercially viable; the operator is convinced that it is cheaper to remain closed than to operate as tourist apartments, never mind as a hotel: the Tourist Board has stated that it does not believe the
operation to be commercially viable; the Tribunal set cost allocations intended to prevent it being commercially viable, so it is something of a surprise that the department has evidence that a hotel operation of 25/35 units here could be commercially viable.
We were told that it was the Tourist Board that had the responsibility of judging whether the operation at Cherry was commercially viable. They have done so, regretfully yes, but unequivocally. We note that a separate study regarding viability submitted to the department (PA18/00637/GB) suggested a rate of return of a minimum of 8%. If you assume a building cost of £2,222 per square metres (affordable housing's criteria) and an average apartment size of 48 metres the base cost would be £2,666,400 giving a minimum required return of £213,312 at 8%. If you add the Tribunal annual penalty of £79,000 that means earning a profit of almost £300,000 a year to satisfy that definition of commercial viability.
No hotel operation, indeed no self-catering business in Port Erin can possibly achieve such a figure, however wonderful a new operator might be. Every professional who has looked at the situation in any details knows that. A multitude of figures have been provided to the department and to the Tourist Board to show that we have not been able to achieve breakeven despite 70% occupancy, never mind a profit.
It has been suggested that as the 25 apartments have not been put up for sale we have not tested whether someone-else might find the property commercially viable as a hotel. That has not been done because
We are aware that Housing Policy 5 requires a contribution to affordable housing for schemes of 8 or more units being granted planning permission. We accept that as we are requesting planning permission for 25 units we are subject to this requirement.
We note the comments that there is a recommendation that a commuted sum should not be sought as our intended selling prices are below the affordable housing price levels. However, we attended a meeting with planners and Brett Wood from the affordable housing department where hands were shaken on an proposal for payment under certain circumstances. That meeting was several months ago and we would be pleased to receive a written copy.
We are aware that Recreation Policy 3 requires the provision of recreational or amenity space. However, it very clearly states on more than one occasion that this applies to new developments. Para 10.3.9 “Open space in new developments should be provided within the site…” It clearly refers to the situation where a developer planning a new site needs to take these issues into consideration. This is a planning application for a change of use it is in not new development. These apartments have not changed in any significant way for over 30 years.
Whilst we are unable to provide an open space we are doing our best to keep the pool open as an amenity for the village which is a recreational activity, if not an open space one.
The 25 units have been in residential use for the unseasonal half of the year for several decades. The only change that is being requested is for the residential use to be allowed all year. That is not new development and it is clear that the policy was not created for an existing development like this one.
The finances of this building are most precarious. As a result of the Tribunal hearings and decisions we have been through a very difficult six year period financially, the hotel operator has ceased trading and the building is working on an emergency budget. The management company is insolvent unless the landlord introduces some £70,000, which can only be justified if planning approval for these 25 units can be obtained. Indeed, the management company is only surviving because of contributions made by the applicant in the hope that planning approval will be obtained. We are trying to keep all the balls in the air, but it is increasingly difficult. The very last thing we want to do is to stop this support and ask all the residents many of whom are no longer young to leave the building, but we cannot continue supporting everybody-else indefinitely. We and all of them need this resolving.
We do not understand why the planning department would recommend a course of action that will perpetuate the present position where much of the building is empty. There can be no long term future for a building of this size where half of the building is empty.
We have been placed in this position through the decision of the Tribunal. They have effectively prevented the building being used for tourist purposes. We heard some time ago a good deal of criticism about government and “silo thinking”. Is there a better example than one arm of government requiring a building to be changed to residential and another rejecting it being changed to residential?
The 25 tourist units have been empty throughout the summer period for the last two years. Statements such as they “account for approximately 16% of the self-catering spaces in Port Erin and the South” are misleading as whilst empty they represent nil % of the available spaces. Similarly, comments regarding the “loss” of these tourist apartments as a result of this application are simply untrue, as the tourist apartments were lost once the Tribunal made its decision. It cannot be said too often that government decisions have rendered these 25 apartments empty of tourists. What are we supposed to do with them if this proposal is rejected?
We understand that it is government policy to develop brownfield sites in preference to agricultural land. Sterilizing 25 apartments and continuing to build new residential property would appear to be in contravention of that policy. Again, the government has a policy of reducing our carbon footprint where reasonable. Sterilizing these 25 apartments and replacing the available accommodation by building elsewhere would appear to be in direct conflict with that policy. Why are we today building new apartments in Port Erin and at the same time sterilizing these, if we are taking our carbon footprint
seriously?
We built Cherry Orchard in 1979/81 only after Chief Minister Percy Radcliffe cornered my father asking him what did he need to do for Fuchsia Homes (our building company) to build some new tourist premises, as nobody was taking up the government scheme. Father offered to build Cherry on the undertaking that he would put his best efforts into making a success of it for 20 years, but if it proved not to be a success, then we would be allowed to turn it into residential apartments. After all we were builders with no experience of hotel management and Manx bed numbers were crumbling at the time. All we are asking, is for government to honour its commitments.
Yours truly,
Ian Gillings
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