New skyscrapers to regenerate rundown part of Preston could end up £35m in the red

Stoneygate Living Ltd have told Preston Council they would be unable to provide any affordable units in the scheme because they would make it financially unviable.

Yet council chiefs are still recommending the outline plans for the development should be given the green light by the planning committee on Thursday because of other benefits they could bring to the Manchester Road area of the city.

The project to build on the site of the former Dryden Mill is the latest in Preston recently to argue against having to meet the rules on providing affordable housing because of the effect it would have on the profitability of a scheme.

A report to be presented to the planning committee this week will say that the council's viability consultants CPV, examining the financial assessments by the developers, concluded that if 30 per cent of the apartments (141) had to be affordable units then the entire scheme could result in a "significant financial loss".

It will say that the viability consultants had raised "serious concerns" and had asked the applicant's agent "why a developer would even consider bringing forward such a scheme when it is clearly unviable, in their opinion".

The figures showed that if the developer took a 15 per cent profit from the project it could lose as much as £35.6m. Even if the developer did not take a profit then the scheme would still work out £21.5m in the red. The report says the development would operate at a "significant financial loss." It would be "massively unviable" and "unrealistic".

Councillors will be told that the developer is hoping that the scheme will attract grant funding to help with the viability issues, something council planning bosses are "dubious can be secured to cover this level of predicted loss".

Nevertheless council officers are to recommend outline planning permission be granted by the committee on Thursday providing a condition is attached guaranteeing the viability of the scheme can be reassessed at a later date.

The Dryden Mill development is for two buildings, each between three and 16 storeys tall. The buildings will be made up of six blocks, each with its own entrance. In between the buildings will be a landscaped courtyard area. The site is bounded by Manchester Road, Grimshaw Street and Queen Street and has been used as a temporary outdoor car park since old industrial buildings were demolished. In total the blocks would provide 469 "high quality" apartments, 261 one-bed, 204 two-bed and four three-bed.

Council support for the scheme stems from the fact it could be the first development to be built out in the area of the new Stoneygate Masterplan which seeks to redevelop a rundown part of the city centre. It is hoped the apartment blocks will act as a catalyst for the rebirth of that area south of Church Street.