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"This report seeks approval for the deferment of historic costs owed to the Council from the Council’s developer partner for the regeneration of the Grahame Park Estate ‘Choices for Grahame Park (CfGP) Limited’, until 1st July 2012, in response to revised funding criteria imposed by the scheme’s principal funder.
"Deferring the payments would allow CfGP to fund these costs from receipts, rather than borrowing the money from their funder and CfGP’s parent company, Genesis Housing Association.
"The Grahame Park regeneration scheme has reached a critical point. Whilst the economy remains fragile, there are key risks associated with regeneration viability. By not enabling flexibility, and approving deferral of historic costs owed to the Council, continued project delivery is at risk.
"Deferring payment of the historic costs owed to the Council would allow CfGP to fund these costs from receipts, rather than borrowing the money from their funder and CfGP’s parent company, Genesis Housing Association. Under the deferment proposal, the Council will be repaid its costs on 1st July 2012, when all the new homes for sale currently under construction have been sold.
"The sales income is critical to the successful delivery of the project, one of the most critical factors in the viability of the project. Sales and marketing of the homes for sale is being delivered by Countryside Properties. Sales are currently progressing at a rate of five per month.
"In 2009, the Council and CfGP jointly appointed a Sales Valuer, who will certify to the Council that sales revenue, for each dwelling sold, represents proper value in the market conditions prevailing at the time of sale. However, CfGP has confirmed to the Council that payment will be made on 1st July 2012, irrespective of sales performance on Phase 1a."