Oxford City Council’s proposed fivefold increase in chargeable community infrastructure levy for offices and research and development facilities will render schemes financially unviable, developers and investors including Stanhope, L&G and Brookfield have warned.
CIL rates were originally set in Oxford in 2013 as a key source of funding for local infrastructure. Late last year, the council proposed changing the charges, seeking to lift the levy rate of £33.74 per sq m for offices and R&D space to £168.74 per sq m. The proposals were lodged for examination with the secretary of state last month.
A spokesperson from the council’s planning team said: “This is the first review of the charges beyond index-based increases. In that time the values for development in the city have changed. The most significant of these has been the values for commercial development, especially those relating to office and R&D developments, with significant development of this type coming forward at a rate not seen before and, in many cases, out-performing other use types.
“The charges proposed are based on viability evidence in line with national policy and guidance. This evidence indicates that this level of change is needed and justified.”
But concerns have been raised during the consultation process that some sites in the city would be unviable at the proposed increased rates. These include new developments across the West End, Oxford North and ARC Oxford.
The city’s West End has a long-term pipeline of more than 2m sq ft of commercial and academic buildings, including the future redevelopment of the 44-acre Osney Mead site proposed by Oxford University Development, a joint venture between Oxford University and Legal & General. The partners have a vision to design and deliver the mix-used scheme featuring innovation and academic space alongside student, affordable and market housing.
During the consultation process, DP9, on behalf of the jv, raised concerns that the draft charging schedule will have an “adverse” impact on the deliverability of the Osney Mead site amid its substantial infrastructure challenges.
The overarching concern has also been raised by Savills, representing Oxford North Ventures, a jv between Thomas White Oxford, the development company of St John’s College, Stanhope and Ontario Teachers’ Pension Plan. The partnership is delivering the £700m Oxford North scheme, featuring 1m sq ft of labs and offices, 480 homes, a hotel, nursery, cafes, bars, and three public parks.
Oxford North’s phase one A, comprising the Red Hall, and two lab and office buildings totalling 188,626 sq ft, is targeting practical completion in mid-2025 (pictured). Meanwhile, phase two, comprising a further three lab and office buildings, measuring 458,489 sq ft, secured planning approval last year.
The jv’s representation submitted to the council has warned that draft amendments to the charging schedule are “fundamentally detrimental” to both scheme viability and the potential deliverability of the remaining 350,000 sq ft of science-related space within the scheme.
Elsewhere, Carter Jonas has brought forward concerns raised by Brookfield life sciences spin-off ARC, which also stressed that a 400% increase in the chargeable levy for office and R&D schemes will lead to widespread unviability of development proposals, particularly in more peripheral locations.
ARC Oxford, which was previously known as Oxford Business Park, is a former car factory that has been transformed into a science and innovation hub. The company has committed to invest over £1bn in Oxfordshire, with plans to double the existing 600,000 sq ft Oxford City space through the construction of new labs, offices, amenities, and R&D facilities at the campus.
According to its statement, if the increased city-wide rate was to be enforced, it would render ARC’s ambitions unviable amid the park’s out-of-town location where rents are lower and major employment sites are typically designated.
Picture © Fletcher Priest Architects
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