A FLAGSHIP housing development promising to deliver 450 homes is on the brink of collapse.

Council officers have recommended the termination of the New Homes Project, previously known as the 49 Sites, at a cost feared to be as much as £1 million to the taxpayer.

Restrictions on building high density housing on key sites in Seaford have left the scheme unviable, according to a report to Lewes District Council's cabinet.

Details of the project were first revealed in The Argus in February 2015 as a partnership between Lewes District Council, Karis Developments and Southern Housing Group.

It was set to deliver homes and commercial space across the the district including Newhaven, Peacehaven, Seaford and Lewes, with 40 per cent affordable homes.

But it became mired in controversy after residents complained about council secrecy and a lack of consultation as public sites were sold off in preparation for the project.

Josh Arghiros, managing director of Karis, blamed political reasons for the decision, and pledged to take legal action with the council over its wasted four years' work and hundreds of thousands of pounds of expenditure.

A key figure in the scheme was Lewes District Council chief executive Jenny Rowlands who is due to leave her post after her role was amalgamated with Eastbourne Borough Council.

She previously worked with Karis Developments while at Brighton and Hove City Council on the failed Frank Gehry wonky towers scheme for the King Alfred in Hove.

Another key figure was former council leader Rob Blackman who resigned in September 2015 after accusing a Seaford resident of “victim mentality” over the project.

Former leader James Page, who stepped down in 2013, originally helped shape the scheme.

The U-turn came after Andy Smith - who served as deputy leader and finance chief under Cllr Blackman and Cllr Page - became acting leader.

Lewes said it had spent £570,000 on the project – but Josh Arghiros believes the loss to the taxpayer will be closer to £1 million.

Mr Arghiros said: “This was a brilliant scheme which was going to make lots of money for the council and produce lots of beautiful affordable homes.

“The project had been fully audited by lawyers and signed it off by Capita.

“But for political reasons the current leader has come in and decided to shut it down.

“We’ve not been given a good reason.

“All the councillors had a chance to look at it and sign it off. Then new councillors were elected in May and wanted to have a look at it.

“A working group was set up, but before they were given an opportunity, this leader decides to close it down.”

A specially cabinet meeting will be asked to make a final decision on Wednesday, February 17.

 

Why has Lewes District Council recommended terminating the contract?

The reasons for the recommended termination of the New Homes Project were “non-satisfaction of the title and ground conditions on key sites”.

Two key sites – the Buckle and Normansel Park Avenue in Seaford – were expected to yield the most in capital receipts, which will be used to fund social housing.

But council investigations found difficulties with the Buckle because of a covenant restricting building height and high density housing. Similar difficulties were found at Normansel Park Avenue.

Karis proposed amend the agreement and continue without those sites but the council said this would not allow it to receive the capital expected for council homes.