Extra Care Housing Development - Edinburgh House

NB: The Councils' high level requirements are summarised below with further important details included within the Procurement Documents accessible via https://supplier.in-tend.co.uk/portsmouthcc/home. INTRODUCTION Portsmouth City Council - the 'Council' - will require the appointed provider to develop approx. 60 new extra care housing units on a design, build, finance and operate (DBFO) basis at the site of the now demolished Edinburgh House Care Home.

The site is located in located within Sundridge Close, Cosham, Portsmouth, Hampshire, PO6 3JL and is wholly owned by the Council. The intention is for the Council to retain the freehold (disposal not precluded at this point) and offer a long lease arrangement, which will include 100% nomination rights to the Council on a 100% affordable rent basis.

Rent and service charge will be eligible for housing benefit should residents be eligible. Residents will only be eligible if they are being supported by the Council.

KEY OBJECTIVES The aim of the project is to deliver affordable high-quality, sustainable accommodation that meets the needs of older people and vulnerable adults, promoting independence while ensuring access to care and support services as required. In undertaking this project, the Council is targeting achievement of the following key objectives: • To provide affordable, purpose-built extra care housing units that enable residents to live independently for as long as possible. • To ensure the design and operation of the scheme adhere to best practice, regulatory standards, and local planning requirements. • To deliver a financially sustainable model for both the provider and the local authority. • To offer a supportive environment with access to care services, communal spaces, and facilities that enhance quality of life. • To deliver a development that is as sustainable and efficient for both residents and the environment as possible.

CONTRACT TERM, KEY DATES & MILESTONES The Council is targeting to have completed the procurement process and secured a preferred provider by the end of May 2027. The Council will enter into a agreement for lease with the secured provider on an initial 12-month term and subject to a 30 month long stop timescale.

Development must formally commence within 4 months of planning permission being clear of judicial review proceedings and must be completed within 24 months. The Council will enter into a long lease arrangement with the Provider based upon the Heads of Terms set out within the following section.

The length of the lease and extension options will be determined through the procurement process but will be no less than 40 years in minimum duration and no more than 250 years in respect of maximum duration including for any extension options. The associated Nominations agreement will run co-terminus with the length of the lease or, if less than the duration of the lease, the operational life span of the developed affordable Extra Care properties including for major refurbishment / modernisation to extend lifespan.

COMMERCIAL ARRANGEMENTS & ESTIMATES The Council is not seeking to make significant rental income from the long lease arrangement which will be offered on a peppercorn basis. The Council will also consider proposals which require a level of underwriting for void properties.

The Provider will be responsible for securing all, or at the least, the vast majority of development funding. The Council will consider bids which require a level of capital contribution from the Council if viability is dependent upon this.

Based upon benchmarked average regional rent & service charge levels (1 bed £226 per week, 2 bed £255 per week), applying an average occupancy level of 90%, multiplying by the 60 no. properties development target and multiplying by 52 weeks the Council estimates that revenue generated through could be approximately £640,000 per year. With inflation applied at 2.5% estimate year on year compound basis, and also accounting for land value plus cost of enabling works already undertaken by the Council (total approx. £1.65M), the Council's business opportunity value estimate for a 40-year minimum lease term arrangement is approx. £45M.

Over a max lease term of 250 years the business opportunity grows exponentially to £12.2B when compound inflation is applied. Noting that the nominations agreement term will be linked to the operational lifespan of the developed properties, which even with significant modernisation is unlikely to exceed 80 - 100 years, the upper end value of the business opportunity is more likely to fall between £160M - £280M.

PLANNING & DEVELOPMENT STATUS In 2023, the Edinburgh House site secured detailed planning approval for 50 extra care housing units and was designated with a C3 planning classification. Although planning approval is in place for 50 units, a high-level massing study has been undertaken inhouse and it is believed that the site has capacity for at least 60 affordable units.

The Council will be looking to maximise the efficiency of the site, but at the same time, retain the benefits of a compliant extra care housing setting, which will achieve standards as set out within HAPPI and Housing LIN. In addition, the Council will be looking for adherence to TAPPI standards to enhance the use of technology where possible.

The appointed partner will be expected to undertake a design review of the existing planning approval and amend accordingly to meet the Council's aspirations of securing at least 60 units. This will require a new Planning application.

The Council has cleared the Edinburgh House site and constructed a new access road with all the appropriate rights required to ensure legal passage. However, it should be noted that the appointed DBFO partner will be required to meet certain obligations in relation to the access road.

SUMMARY SCOPE The appointed provider will be appointed on a DBFO basis and therefore will be required to design a building to accommodate at least 60 units, secure a new Planning approval consent with the required legal agreements, complete the detailed design, secure all or at least the very significant majority of necessary funding, construct the new setting and then operate landlord & housing management services for a period as set out in the future lease. The DBFO provider will be required to design, construct and provide property management of the extra care housing in accordance with the Council's summary requirements defined within the Specification and associated documentation which will be issued at the next stage of the procurement process to the shortlisted providers.

A summary of the providers specific Design, Build, Finance and Operate responsibilities are set out below: DESIGN • Develop architectural plans for the site, ensuring accessibility, safety, and comfort for residents. • Include a mix of unit sizes to accommodate diverse needs and preferences. Expected split of units 95% 1 bed & 5% 2 bed. • Incorporate communal areas, gardens, and activity spaces. • Secure detailed Planning permission for the development. • Ensure compliance with relevant building regulations, including fire safety and accessibility standards. • Ensure compliance with HAPPI and TAPPI Standards. • Consideration should be allowed for intergenerational living where possible. • Ensure that the design complies with a reasonable level of sustainability (BREEAM Excellent/Good) and considers the wider resident efficiencies.

BUILD • Construct the extra care housing scheme to the agreed design, using sustainable materials and building practices. • Deliver all site infrastructure, landscaping, and ancillary works. • Complete construction within agreed timescales and budget. • Please note the obligations for appointed partner in relation to the highway access to the site, which has been constructed, but has some liabilities for the DBFO partner. • The DBFO provider should look to generate local labour policies during construction and consider linking to the social value element of the tender. FINANCE • Provide a robust financial model, including capital investment, operational costs, and rental income projections. • Demonstrate capacity to secure and manage funding for both construction and ongoing operations. • Ensure affordability for residents in line with local authority guidelines. • Ensure sustainable and viable long-term delivery of the development and service.

OPERATE • Manage the day-to-day running of the scheme, including maintenance, resident services, resident tenancies, and staffing. • Ensure that residents costs are kept to a minimum and are deemed as affordable, including service charges. • Monitor and report on service quality, resident wellbeing, and scheme performance. • Self report against a set of high level KPI's as set by the Council which reflect those that Registered Providers are required to report to the Regulator of Social Housing (RSH) CARE PROVISION The provider will NOT be responsible for the provision of care and support to residents which will be procured separately. The Council's commissioning strategy is for the care & support to be delivered by a different provider to help preserve residents' independence and flexibility.

This approach will also enable the Council to make efficient use of existing commissioning models in respect of the provision of care services to vulnerable older persons and to align the care provided to the occupants of the extra care housing with that provided more widely. As such, the successful provider for the development and property management of the extra care housing secured via this procurement process will be barred from bidding for the future associated care and support contract.