How to Skin a Cat

North West Mull Community Woodland Company Ltd

RHS Oban04/04/2014

Outline

•Background and Structure•Key tasks•Housing Need•First Project•Funding Generally•Alternative approach - Woodland Crofts•NFLS

Background

•The woodlands which total some 700 hectares were purchased for £342K in 2006 under the National Forest Land Scheme from Forestry Commission Scotland, with the assistance of the Scottish Land Fund, Highlands and Islands Enterprise, The Robertson Trust, Hugh Fraser Foundation, significant local fundraising and an interest free loan.

Structure

• We are a Community Company, limited by Guarantee with charitable status.

• The Electoral Roll in our membership area is approximately 360.

• Our membership is 164 full voting members plus 62 associate and junior members.

• 11 Board members• 1.5 Staff

Key Tasks

• Create a link to the A848 Tobermory - Craignure Road via a dedicated Haul Route.

• Compile and agree a Long Term Forest Design Plan.

• Obtain UK Woodland Assurance Scheme certification.

• Pay for the Haul Route

Housing Need• There is an established need for affordable housing

in our catchment area but it appears to have changed markedly over the last 6 years

• Initial housing survey showed 20 families in housing need with a preference for rental but with some requirement for affordable self build sites

• 2 further surveys show a reducing demand, the latest summer 2012 produced only 5 responses 2 for rental and 3 for low cost sites• BUT WE KNOW THAT’S NOT

CORRECT

Available Land

• During the initial stages of the land purchase we negotiated the inclusion of 4.3 hectares (10 acres) of land in the Argyll and Bute Council (A&BC) Local Plan as a Permitted Development Area (PDA) with the following conditions:-

• 50% affordable• Mixed Density

Develop With an Existing Provider

• This was our initial approach in 2007 but the less than easy site worked against the project for the Developer.•We also had reservations about

allocation policy.• It was perhaps too early in the

overall project for us.

2009 Rural Homes For Rent

• A competitive bid project from Scottish Government at very short notice

• Fully costed bid required, overall cost to us £17,000 but significant grant aid from HIE and others reduced the cost to us to £9000.

• Unsuccessful – why? Because our above ground costs were too high – what impact did that have given that we were only requesting the same intervention per unit as others?

• I believe only about 3 of the 20+ schemes accepted were delivered.

Steading Type Housing

Enclosed by the landscape

2nd Version Fund and Build Independently

• Cash generation • Sales of affordable self build sites on PDA £150K• Sales of Open Market sites on PDA £250K• Borrowings £550K

• This was worth looking at but the costs didn’t really stack up due to the level of borrowing.

Version 3 Joint Venture• By undertaking a Joint venture to build

not only the affordable rental houses but also to develop and sell the retail plots as built houses, significant value could be added.• Scheme worked out using RHFR designs.• Joint Venture Structure agreed with HMRC

that would protect all capital gains and trading profits due to the Charity from taxation.• Housing Market tumbled

Caution

• The final output is a mix of restricted and unrestricted funds.

• What will and what will not be cleared by HMRC may vary case by case so obtain clearance first.

• Consult with Funders.• Work with the Local Authority.• Take advice from your legal and accounting

advisers.

Version 4 Our Island Home• Cash generation • Sales of 5 affordable sites on PDA £150K• Sales of 5 Open Market sites on PDA £250K• Borrowings £100K (very low but the interest rate tend is

up and we are looking to provide low rents and well maintained property).

• Other Funding £450K • This may work, subject to funding the gap. A major

contribution to this is the projected build cost per unit of less than £100K excluding infrastructure that should be possible using the winning design from the Our Island Home competition.

National Forest Land Scheme

• Established by Forestry Commission in 2005 to deal with:-– Community Acquisition– Land For Forest Crofts– Land For affordable Housing– Sale of Surplus land

• Guidance note available from FCS website• http://www.forestry.gov.uk/nfls

• The NFLS team is very approachable • If you’re successful you be like us Asset Rich and Cash Poor

Ongoing Projects• Forest Management• Forest School• Micro Hydro• Woodmizer• Woodland Burials• Access and Amenity Development• Wood Fuel Supply• Wood Chip Supply

Thanks for listening and if you have any questions - now is the time

If any questions arise after today you can contact me on :-

01688 400600 or on e-mail ian_nwmullwoodland@btconnect.com

www.nwmullwoodland.co.uk