Community Infrastructure Levy - Draft Charging Schedule (Nov 2014)

Comment

Representation ID: 1707

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

See attachment - submitted by Planning Potential Ltd on behalf of ALDI Stores Ltd

Comment

Representation ID: 1758

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

We note that the DCS has been derived following a Viability Study undertaken by BNP Paribas Real Estate, which we have reviewed accordingly. Our primary concern is that despite the recognition of the different types of convenience retail format being pursued - through the viability testing of three development scenarios of a 279 sq.m unit, 1,000sq.m unit and a 5,000 sq.m unit -this is subsequently not reflected in the draft charging schedule. While the smallest 'express' type convenience units are subject to a proposed charge rate of £10 per sq.m, all foodstores greater than 280 sq.m floorspace are subject to the same £70 per sq.m blanket charge rate.

Object

Representation ID: 1759

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

This blanket charge rate is unfair and would prejudice against LAD operators, such as ALDI, by subjecting them to a charge rate that is considered equally viable for larger supermarket developments, more typical of the Big 4 operators, which are based on entirely different operational formats.

Comment

Representation ID: 1760

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

While we support the use of a floorspace threshold to differentiate between large supermarket formats and the express formats, we believe that it would be appropriate to introduce an additional tier of differentiation within the charging schedule which would recognise LADs as operationally different to larger superstore formats.

Object

Representation ID: 1761

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

ALDI, as an LAD, operates on low profit margins, and their business model is based on high levels of efficiency and low overheads to enable cost savings to be passed on to their customers. There appears to be a perception that food retailers can afford to pay equal CIL charges, and that the viability of all convenience retail formats would not be jeopardised. Whilst this may be applicable for the larger 'supermarket' formats typical of the 'Big 4' operators, it is not the case for discounters.

Object

Representation ID: 1762

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

We consider that a 'like for like' comparison between convenience retail formats above 280 sq.m is not possible, and the generalisation of trading formats is a flaw when assessing viability. It is unreasonable for an LAD to pay a CIL charge that can be far more easily absorbed by a large format store or superstore. We remind the Council that at paragraph 37, the CIL Guidance (April 2013) states 11Charging schedules should not impact disproportionately on particular sectors or specialist forms of development. "Discount operators provide a valuable role in the convenience market, extending the local retail offer and delivering choice for those suffering from social exclusion: a key issue within the NPPF. In respect of viability, the high CIL rate may jeopardise the ability of discount convenience operators to deliver such benefits, in conflict with Paragraph 14 (1b) of the CIL Regulations 2010, which states that Councils should consider lithe potential effects (taken as a whole) of the imposition of the CIL on the economic viability
of development across its area".

Object

Representation ID: 1763

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

The creation of a physical retail destination can introduce a number of benefits, including enhancing retail choice, stimulating competition, creating employment opportunities, and generating spin-off trade through stimulating linked trips and increased footfall, in some cases facilitating other development nearby.
Essentially, we would encourage a more representative charging schedule which fully acknowledges the different types and format of convenience retail development. We would suggest that this subsequently leads to fairer representation for unique formats such as LADs in a revised charging schedule. Practically, the most effective method of differentiation would be to use an additional floorspace threshold, above and below which charge rates vary.

Comment

Representation ID: 1764

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

Given the NPPF sets a threshold of 2,500 sq m for new development requiring full retail assessments to be undertaken, it is considered that those developments that exceed the threshold are likely to have a greater impact on local shopping patterns than those below it. We therefore consider this to be a sensible threshold to differentiate between convenience retail formats in the context of CIL. The approach would take account of different levels of viability, with non-LAD formats typical of the 'Big 4' retailers, which have greater turnover potential, exceeding the threshold, and discount operators falling within it. Both formats could continue to be separated from the smaller express format, which is already made distinct in the draft charging schedule.

Comment

Representation ID: 1765

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

Furthermore, in considering the value that convenience retail development can have in ensuring the vitality and viability of town centres, the subsequent effect of deterring such development could be severe, with adverse impacts on the communities and neighbourhoods they serve possible. This argument was highlighted in the Examiner's report on Trafford Borough Council's Draft Charging Schedule, dated 31 January 2014. The report concluded that, in order to ensure that a CIL charge would not harm the vitality and viability of Sale Town Centre, by making a supermarket development proposal unviable, town centre supermarket developments should be exempt from the levy.

Object

Representation ID: 1766

Received: 01/12/2014

Respondent: ALDI Stores Ltd

Agent: Planning Potential Ltd

In summary, we would hope the Council will take on board these comments and consider the appropriateness of defining between the differing formats within the
convenience retail sector.

Introducing an additional floorspace threshold would help to quantify large convenience retail developments and allow LADs and smaller formats to be considered separately to larger supermarkets. Ultimately, larger foodstores would be liable for a higher levy rate, commensurate with their typical operation and average sales densities.

ALDI has an active interest in delivering new investment in the district and look forward to exploring further site-specific opportunities to do so. However, it is hoped that the Council ensures that a commercially realistic CIL charging schedule is pursued, to ensure that the appetite for beneficial investment in the district is not discouraged. We realise that the levy is at present only in draft form, with scope for review in light of the representations received. We would be grateful if you could keep us informed of CIL progress in the borough