Scottish Government

CHAPTER 4
DELIVERING THE EXPO PROJECT

"It was thought that in the highly competitive Scottish housing market, architects and developers would leap at the chance to compete to build a house for exhibition to the public."

In August 2005, Highland Housing Alliance ( HHA) was invited to join an Advisory Board set up by The Highland Council to promote a Finnish style 'Housing Fair'. A key player in the project was the Forestry Commission Scotland, because of a desire to see increased use of Scottish Timber in Scottish construction.

The HHA is a relatively new organisation, founded in 2005 to buy land and build houses in the Highlands. It is a unique development company dedicated to building a wide variety of homes at several sites around the Highlands, it is owned by five housing associations working in the Highlands, two housing trusts and The Highland Council.

As described in previous chapters, a number of delegations had visited Finland, with The Scottish Government, to see first hand the impact of annual Housing Fairs on the aspirations of the public, and on private housing developers in terms of improving design quality. All of those who had taken part in the visits had been inspired by the concept and it was thought that in the highly competitive Scottish housing market, architects and developers would leap at the chance to show off their design and construction skills by competing to build a house for exhibition to the public. The intention was that the costs would be recouped by sale of the houses at the end of the exhibition.

THE SITE

The Highland Council and the Forestry Commission Scotland had trawled their land banks, but found nothing suitable, as many of the obvious possible sites already had planning permission for other housing projects or were inappropriate.

The Fair's Advisory Board had minimum requirements for the site, it had to:

• be easily accessible for large numbers of visitors;
• be commercially attractive to developers if they were to fund the building of the houses and to have some guarantee that they would get their money back with a successful sale;
• have guaranteed services in place, with capacity for water, sewerage and electricity;
• be reasonable to build on - no major contamination or earthworks issues;
• be zoned for housing in the Local Plan;
• and lastly, it had to be in Inverness.

A comprehensive examination of all zoned housing sites in the Inverness area resulted in a short list of four potential locations. Feasibility studies were carried out on all four options, none of which proved suitable. There was also the hurdle of the fact that any landowner in 2006 with a fully serviced zoned site would be looking for upwards of £400,000 an acre. Two developers, Robertson Homes and Tullochs were approached, but the housing boom at that time meant that they were both reluctant to part with sites at a reasonable price.

A site was finally identified at Balvonie, adjacent to the Milton of Leys Masterplan area. The site was owned by Tulloch, but was not zoned for housing in the current local plan. The Reporter in 2005 had specifically mentioned it as possible for future zoning, given that it was a natural extension to the existing Milton of Leys housing developments. The site was landlocked, and Tulloch also owned the area of land that linked it to the adopted road. They had also invested substantially in bringing all services adjacent to the site. It fitted every criteria with the exception of the zoning, but was further out of Inverness than had been the original intention.

In 2006, Milton of Leys had around 450 houses, but no community facilities. A site had been zoned for a neighbourhood shopping centre and school, but neither had yet materialised. The area was also cut off from the other South Western suburbs of Wester Inshes and Raigmore by the lack of a link road, forcing traffic to go on to the main A9 trunk road to go anywhere from Milton of Leys.

The addition of the Housing Fair development could potentially increase the number of houses at Milton of Leys to a level that would necessitate the completion of the Link Road. The HHA therefore agreed to contribute to the Link Road as part of the development costs of the Fair. However, the purchase was contingent on obtaining an outline planning consent and confirmation that the site was able to be developed.

The outline planning application was made for the development of the site, and while all notice periods were observed, and meetings held with the local Community Councils, the idea of the Fair became tangled in existing community concerns about the lack of facilities at Milton of Leys. Further, because the site had not yet been designed, the community expressed concern about what it would actually look like, and at that point no one was in a position to respond with the details. While outline consent was granted, it came with a full list of detailed conditions, the major one of which was the formation of a masterplan for the site.

THE COMPETITION

Two appointments were made at this time - a Project Co-ordinator, Fiona Porteous, an architect, and, after a tender process, the masterplanner Johnny Cadell of Cadell2 and his team. However, before anything else could move on, decisions had to be made about how to develop the site, what financial model would be used, and also how best to run the competition. The first decision was to appoint the Royal Incorporation of Architects in Scotland ( RIAS) to organise the competition on the basis of a masterplan developed by Cadell2 around an agreed mix of houses, tenures and sizes: 23 affordable, rented and low cost home ownership and 32 private houses for sale.

There were plots assigned to flats, terraces and semi-detached dwellings as well as large detached houses resulting in a design competition for 27 plots. A detailed site plan and design brief were drawn up, showing building lines, eaves heights, an indication of preferred materials, technologies, orientation and relationships between buildings: all of which were dependent on site location. Some plots specified live-work units, either within the house or within the plot curtilage. Financial information was also provided, particularly in relation to the affordable units, which had to meet the budgets set by The Scottish Government.

The funding model invited architects to team up with a developer to submit an entry, and the winning teams would then work up the designs and buy the land from the HHA as a fully serviced plot on which to build their houses. HHA would use the plot price to refund the purchase price of the land, the infrastructure contract and the masterplan and planning fees. The amount of land acquired was sufficient to enable a Phase 2 development after the event.

The competition was run in early 2007 and resulted in 88 entries from which the winners were selected in May 2007. At this stage in was envisaged that the event would run in August 2009 and a two-year build period seemed reasonable.

It became apparent over 2007 that some architects had not yet identified a developer and that some designs while architecturally iconic, would struggle to meet cost constraints. The most dramatic example was the NORD Plot 2 terrace of 4, clad in Caithness Stone and submitted as an affordable design, another being the house selected for Plot 10. This was designated as an 'affordable' plot for rental via a housing association, but the selected design was originally designed as a private house for sale. And there were other similar issues relating to houses that had been designed for one plot having been selected as winners but on a different plot.

Given that there was no up front finance, the HHA in some instances had to front-fund the cost of working up detailed planning and building warrant drawings for some practices. There was also the issue of conflicts between developers and architects on the value engineering issues and the viability of some designs (this is further discussed in Chapter 8). Convincing major developers not used to working in the Highlands about the realities of local price values and revenues was also challenging.

At the end of 2007, the HHA commissioned site preparation and infrastructure works, from its own resources. The infrastructure contractor was awarded a series of small contracts which enabled the pace of works to be varied dependent on progress elsewhere.

By 2008, detailed planning consent had been obtained for all the houses and for the masterplan and the majority of building warrants were programmed for submission.

The HHA was attempting to complete plot purchases, but by now, the effects of the banking crisis were beginning to affect the programme. Developers were beginning to withdraw from the project and unless a new finance model could be found, was put in place, the project was in danger of collapsing.

In the meantime, Councillor Jean Urquhart had replaced Councillor Iain Ross as Chairman of the Advisory Board, which was transformed into a legal company. The Board decided that, given the extended timescale, there was an opportunity to raise the profile of the event nationally. They decided on a change of name and so the Fair was rebranded - Scotland's Housing Expo - at which point it was also agreed that the event would be postponed until August 2010.

Alex Neil, MSP, the Minister for Housing and Communities, was approached, to explore funding options. The proposal was that the 23 houses for rent/low cost home ownership would be financed by Housing Association Grant ( HAG). Given the problem of securing developers due to the financial crisis, the build contracts for all the houses were split between 5 major house builders who already operated in the Highlands and who each already had declared an interest in a plot - Tulloch Homes Express, Robertson Highland, O'Brien Properties, Morrison Homes and William Gray Construction - in return for them proceeding to finance their original plots. Plot 17 had been funded up-front. This left 24 houses to be financed. The HHA took out a bank loan which was underwritten by a guarantee from The Scottish Government.

" At the end of 2007, the HHA commissioned site preparation and infrastructure works, from its own resources."

The decision was also made to proceed on a design and build basis, which was controversial with the architects and some members of the Expo Board, but which was deemed necessary for cost control. WSD were appointed as cost consultants and had to negotiate with each architect and developer to deliver each plot within a target budget - which in most cases still exceeded the then projected revenue from the house sales. The architects had to absorb the fact that there was no additional grant support available for innovation and no value attributed in mortgage valuations for whole life cost savings or carbon footprint reduction - despite these being driving forces for the competition.

Although there was backing from The Scottish Government, no finance was made available by the bank until April 2010. In the meantime, the HHA had agreed to pay 70% of the fees for the 24 houses it was funding. Given the enormous financial pressures most practices were under at this time, compounded by the excessively hard winter of 2009, there was no option but to front fund these.

The contractors in some instances were able to get on site in December 2009, but the main build work did not really commence until February 2010 for an opening in August 2010.

Good site organisation was imperative, and new legal structures - the Highland Contractors Consortium - were put in place to cover insurance issues and common compounds and cabin areas worked well. There was also a special arrangement made to allow a sixth contractor on site - James MacQueen from the Isle of Skye on Plot 17 with Rural Design Architects, who had shown extreme faith in the project from the outset having been the only developer who paid up-front for this Plot in 2008.

The infrastructure contractor, GF Job was still on site to complete the masterplanned street scape alongside the other builders. And, the landscaping company, Tillhill, had to complete gardens while the weather continued to make life difficult for everyone.

Snow, ice, floods and fire were added difficulties on site from January 2010 onwards. However, slowly but surely some amazing buildings started to appear from the ground as progress was being made.

The event also lost Fiona Porteous in May 2010, but found a replacement in Fiona Hampton to help bring the event to fruition by August. The amount of organisation involved was significant, and several omissions had to be overcome, such as no budget for floor coverings or the children's play area - which was finally realised through the expertise of Wayne and Geraldine Hemmingway, who had supported the project from the outset in 2007.

July was a hectic month. Meeting after meeting saw items ironed out and resolved, with the added spice of the event organisers arriving to sort out the logistics of staging a month long event. Meanwhile the contractors pulled out every stop to ensure all requirements for the event were met - toilets, café, ramps, etc.

The Saturday before the opening and the Sunday morning of the first of August were a sight to behold, with people running everywhere. There was a skip in the middle of the main street, which was so full, it could hardly be moved - but it was finally removed - and the site was as tidy as we could make it in the pouring rain. From 10am onwards, people began to arrive and kept on coming and were in the main, amazed.

We had dealt with scepticism from the local press from the outset in 2006, and despite reports of a slow start the reputation and achievement of Scotland's (first) Housing Expo was gaining ground, and the tide eventually turned in its favour. The completion of the Link Road and the building of the new Milton of Leys primary school helped change local opinion and while the traffic generated by the 33,000 people who visited the event was at times an issue, in the main it has been welcomed.

THE RESULT

50 out of the original 55 houses were completed on time. Plot 10, a terrace of 3, was not built in the end because of cost issues (see Chapter 6). Plots 16 and 21 were to be constructed of massive timber imported from Austria, and were not built in time for the event, although Plot 16 had its frame erected, and so the only empty Plot was 21, which has since been completed.

Finally, at the start of 2011, people are beginning to move into the houses, turning Scotland's first Housing Expo into the Braes of Balvonie - a community in what Wayne Hemmingway has described as the best housing development in the UK.

The HHA has 24 private houses to sell in order to repay the bank and release The Scottish Government guarantee - no small feat in the financial climate of 2011, but huge lessons have been learned:

• we need to find ways to fund innovation and to encourage use of local materials which may be more expensive, but local manufacturers also need to undertake product development to compete with continental imports;
• the same message is true for the promotion and use of Scottish timber, a cause which in some ways prompted the Expo, but which needs concentrated research and development work;
• the financial equation does not add up at the moment and developers are being asked to fund higher than current building regulation requirements with no added value for a post 2010 Building Standard Regulations house.

However, we have established what it means to deliver an Expo and the level of interest amongst the general public exceeded expectation. Undoubtedly, an Expo in a more central location should attract significantly higher visitor numbers - one difference between Scotland and Finland that should be considered is that in Finland, municipalities compete and donate the site, which was a significant cost factor in our case.

Susan Torrance
Chief Executive HHA

" We have established what it means to deliver an Expo and the level of interest amongst the general public exceeded expectation."