Major regeneration of a hospital site will cost £15.9m – and a house builder can expect sales to top £25m.

But questions have been raised about the viability of developing the former St Luke’s site in Crosland Moor.

And it will be up to a Kirklees Council planning committee to rule on whether so-called affordable housing should be included in the regeneration of the site which may make it ‘unviable’ despite the staggering figures.

Calderdale and Huddersfield NHS Foundation Trust, which owns the site, is seeking outline consent for up to 200 houses, a supermarket, shops, pub and petrol station off Blackmoorfoot Road.

A viability report shows that once costs of £12.6m are taken out, the developers may be left with a £2m profit, and with planning obligations potentially topping £1m it could prove unviable.

But the hospital trust will not build the site themselves and will instead sell the land to builders as the planning consent will give them a higher return.

Documents submitted with the application show the developer thinks there is a fine line between the plan being viable and it being unviable.

A viability report shows construction costs will be £15.9m. A house-builder can expect private sales of housing to top £24m with a further £1.4m of affordable housing included in the plans. However, there is potential for the developer to ask the council to remove or reduce the affordable housing element of the plan.

The application says: “The Trust is committed to securing the best possible value for the St Luke’s site, as a public sector body, and the importance of supporting the redevelopment of the St Luke’s site and securing the best possible value cannot be underestimated as significant redevelopment costs have already been incurred by the Trust which has been financed through a repayable loan (£2m) from the Homes and Communities Agency (HCA).

 

“The repayment of this loan is required over the next two years and the costs of refurbishment and provision of new clinical accommodation within the Huddersfield Royal Infirmary (HRI) and Acre Mill, which are in excess of £5m, need to be recovered.”

It adds that “there are issues” where viability is concerned: “It has been demonstrated that the planning obligations being placed on the residential elements of the scheme are having an adverse impact on scheme viability and preventing the landowner (the Trust) from receiving a competitive land value.

“The biggest influence on viability is affordable housing and if this is excluded from the scheme the residential development is able to sustain the POS (Public Open Space) and education contributions in full.

“However, if an element of affordable housing is required from the scheme a maximum contribution of 5% could be sustained but this would mean the scheme is unable to sustain any POS contributions.”

It adds they hope to work with Kirklees Council to agree Section 106 contributions to allow the scheme to proceed.

The application is open to public comments at Kirklees Council.