Agents acting on behalf of a prominent development on Tenby's South Beach have seen a request turned down by the Pembrokeshire Coast National Park Authority to alter an obligation to provide off-site affordable housing, which they believe is hindering the completion of the scheme

Property management and consultancy experts GVA, acting on behalf of insolvency practitioners Opus Restructuring LLP, who were appointed administrators back in June of last year for the developers of the South Beach project, made an informal request to the National Park Authority, seeking a modification of the Section 106 obligation imposed on planning permission in relation to the provision of affordable housing.

In correspondence to Vicki Hirst, the authority's head of development management, Owain Griffiths, of GVA, admitted that the next phase of the development, which has been on hold since Cardiff-based developers for the project, Opco Construction, entered into administration last June, would see the site on the South Beach, remain a "liability and an eyesore" until a purchaser could be found.

Planning permission was granted in 2008 for the scheme which was known as the Water's Edge development, comprising of 19 holiday apartments, associated car parking spaces, beach retail and restaurant facilities.

This application was subsequently amended in 2010 to remove the holiday use restriction in favour of open market units with a requirement to provide five off-site affordable housing units within the Tenby area.

In a report which went to the authority's development management committee on Wednesday, Ms Hirst stated: "The current request seeks a modification of the Section 106 obligation to amend the need to provide off-site affordable housing, and to replace it with a financial contribution of £150,000 to the authority.

"Officers have met with the agent and were appraised of the situation. In brief, the developer is in financial difficulties and it is therefore necessary to sell the site (the part still under construction).

"The agent confirmed that there were creditors, while officers pointed out that the authority's affordable housing could only be considered as a creditor to the scheme," she explained.

The report which concerned only the second phase of the scheme, stated that officers had also asked that proof be provided that there were no interested purchasers to the site.

Phase 2 of the scheme which comprises of 10 apartments over two floors with under croft parking below, remains incomplete, with only ground works and a metal frame in place.

In a letter to the authority's head of development management, Mr. Griffiths, of GVA, said: "It is our opinion that the Section 106 currently hinders the site's development as it makes it unattractive to the market by creating uncertainties over cost and development timescales.

"This will at best result in very low offers being made for the development site and at worst it will result in the site not being sold and remaining a liability and an eyesore in this prominent location on South Beach.

"We have undertaken an examination of the viability issues affecting the site and it is clear that the continued development of the site is not viable as things currently stand.

"It is on this basis that we are seeking agreement to modify the Section 106 agreement in order to bring forward the development of this important and prominent site in a manner that is commercially viable.

"The development benefits from a spectacular and prominent position at the foot of the cliffs on South Beach itself with excellent views of the beach and out to sea.

"However, as things stand, this part-built development site is an eyesore both for existing residents of Phase 1 and members of the public using the beach and visiting the South Beach Bar and Grill or the South Beach Shack," added Mr. Griffiths.

Ms Hirst reported to the committee that, whilst there was sympathy with the current difficulties of the administrator, officers were of the view that the Section 106 should only be amended if there was substantial evidence to demonstrate that the viability of the scheme was negative, and that there was no buyer for the site as it stands.

"It is considered that the request for a modification has not been justified and the original obligation should remain," she concluded, with the request being refused.