Wales' largest building society, Principality and Welsh Government have created a social enterprise to realise the potential of the 53 acre former Paper Mill site at Ely Bridge with a view to creating a sustainable financial model for delivering affordable and open market housing in the area.
Supported by an initial £6m commercial loan from Welsh Government, the new enterprise will oversee the development of approximately 700 new homes. There will be a high emphasis on creating affordable homes, with over 50% quality mixed tenure affordable houses planned and the remaining available for open market sale.
Helping to address the acute housing shortage facing Cardiff, the project aims to provide a mix of housing incorporating family homes with gardens. It will also include a small district centre that will be closely linked to the proposed primary school, existing health centre and community hospital. This will ensure that the community will continue to develop naturally.
Additional benefits include the provision of a new riverside park; completion of the Ely Trail cycle path; links to convenient and frequent public service transport and the decontamination of a large vacant site in central Cardiff.
It is expected that the project will create £100m of investment in the site and over 200 jobs per year will be delivered. It is planned that Principality Building Society will take a lead role in the arrangement of debt finance.
Principality's Group Chief Executive Peter Griffiths said:
"This is a very exciting and innovative initiative which will aim to access new forms of Capital Markets funding. I have said before that a home is about safety, security and a sense of well- being and it is important that all stakeholders work together to address the challenges and deliver this essential social need to the people of Wales.
"This project visibly demonstrates our role in driving the Welsh housing agenda to ensure that the market continues to deliver homes of differing tenures for families struggling to step onto the housing ladder and importantly to also help boost local employment.
"We firmly believe that the successful delivery of this type of institutional rental model could be replicated on sites elsewhere in Wales to help address some of the dysfunctional aspects of the current housing market."
The £6million funding is allocated from the Welsh Government's £38million economic stimulus package announced last year to help generate immediate benefits for the Welsh economy.
Minister for Business, Enterprise, Technology and Science, Edwina Hart, said:
"The Ely Mill project will provide an important boost for the Welsh construction industry, creating a significant number of jobs in the Cardiff area over the next five to six years, whilst also providing further business opportunities for construction sector supply chains in Wales.
"This innovative project will also help deliver social and economic benefits as set out in our Programme for Government.
"The £6million funding from the Welsh Government will be a vital catalyst to enable this innovative project to go ahead as early as is practically possible. The loan will be repaid to the Welsh Government, with interest, at the end of the development and then recycled to support future projects in Wales."
Minister for Welsh Housing, Regeneration and Heritage, Huw Lewis, said:
"Utilising public sector land to increase the amount of affordable housing is key to meeting increasing housing need and I am delighted that Welsh Government has been able to work with the Principality in achieving this innovative model, which not only will provide much needed housing, but huge community benefits too."
David Ward, Head of Planning and Urban Design, Arup, has been appointed as interim Chief Executive of the new organisation, along with John Lovell of Lovell Project Management, who will take on the role of Chairman.
David will be responsible for delivering the early stages of the project that will result in the delivery of the stakeholders' vision for the site over the next 4 to 5 years. With over 20 years' experience of working in the built environment David is highly skilled in leading projects which require the effective integration of planning, design, infrastructure and construction disciplines.
He said:
"This is a truly innovative project that places Wales at the cutting edge of housing delivery. Good quality, well managed, affordable housing is a key component of our economy's infrastructure, providing direct jobs through construction and the conditions for stable labour markets that are so critical in supporting growth.
"Equally important is the creation of a sustainable urban community and to this end we are committed to engaging with the local community in the design and implementation of the project."
Subject to planning permission from Cardiff City Council remediation works at the Paper Mill site will commence in October 2012 and will complete in May 2013. House building will start in the second quarter of 2013 with the entire development being complete by the end of 2017.
It is envisaged that the affordable homes will be offered at intermediate rents which will be at or below Local Housing Allowance rates. Some homes may also be offered for Assisted Home Ownership which should help younger families to step onto the housing ladder.
