RUMOURS are rife around Dartmouth over the future of the old Dartmouth Hospital, including it being brought outright by a developer and turned into a ‘luxury boutique hotel’.

Torbay and South Devon NHS Trust, which owns the site, is looking to recoup £1million from the sale towards the town’s new £4.8million health and wellbeing centre. There’s a covenant on 16 per cent of the site for it to be used for the community in perpetuity.

A working group, headed up by the town council, has been negotiating for a deal on the riverside site for community use, including lower cost housing for key workers as requested in a public survey last winter. Negotiations have been held confidentially, due to financial sensitivities, with many council discussions held in ‘part two’ of full council meetings, which excludes the press and public.

Devon and South Hams Cllr Jonathan Hawkins said: “The town is full of rumour and we want the town council to let the residents know what they have chosen for the site. Why does the town council not come clean, why all the secrecy? Let the residents decide if they support who they’ve gone in with.” Why does the Town Council not tell its community what they have planned and keep running into closed session

After a request from this paper Dartmouth Town Council released details of the working group’s negotiations and promised further information to follow. In a statement they said the town council has opted for a partnership with a commercial developer, whereby the council is granted freehold of the site, an annual ground rent, and “significant initial sum of money” which they would give to a local charity to provide affordable housing. They said neither the council nor a local housing association could afford to purchase the site outright.

Town Clerk Charlie Pritchard-Williams added: “The council really hasn’t meant to keep anything secret, we just haven’t been allowed to release details of the developer as per the contracts with all parties.”

Dartmouthy Town Council said a working group was set up to gain maximum community value from the sale, after a joint Torbay and South Devon NHS Foundation Trust and Dartmouth Council survey last winter showed residents’ preference for affordable housing for young families and key workers.

However, at more than £2 million and additional redevelopment costs, the council “was not in a position to purchase and redevelop the property by itself”.

It added: “Many social housing providers were asked if they’d be interested in purchasing the site for affordable housing. None considered it viable due to the limited size, location and high site value. An innovative solution was to explore a commercial partnership between the town council and a developer to purchase the site for Dartmouth Town Council and develop it with Dartmouth receiving social value.”

The statement said developers presented the town council with two options - partnership with a developer or 16 per cent (the value of the covenant) of the sale price handed over as social value. Dartmouth Town Council said it voted to choose the first option of partnership as best value for the town.

It concluded: “Agreement has been reached between Dartmouth Town Council and South Devon NHS Foundation Trust. The town council acquires the freehold of the hospital. The developer provides the funding in exchange for a long lease and develops the site for a commercial venture. The benefits for Dartmouth are substantial employment will be generated; Dartmouth Town Council will receive a significant initial sum of money; and the town council receives annual ground rent

“Simultaneously, but separately, Dartmouth Town Council has reached agreement with a charity experienced in providing social housing. We will transfer funds and income from the sale to the charity which will use these funds to provide affordable housing in Dartmouth and hardship grants to Dartmothians in need in accordance with the charity’s governing rules. Dartmouth Town Council fulfils the wishes of our residents! The negotiations are now complete, and the Heads of Terms approved by all parties. Dartmouth Town Council will release more details when all transactions are complete.”

The town council said residents were “horrified” when the hospital was closed and put up for sale, especially as it was originally funded by the people of Dartmouth “hence a widespread sense of injustice”.

They added: “A covenant on the old hospital (approximately 16 per cent) requires the site be used in perpetuity for the benefit of the people of Dartmouth. Legal advice is this can be removed by the Secretary of State. The reality is the NHS Trust owns the property, the covenant would be lifted, and the Trust intended to sell. It was clear the sale could not be prevented.”

Devon and South Hams Cllr Jonathan Hawkins said: “We must remember there was overwhelming support for a development that included key worker accommodation with affordable homes. This is a valuable site and a once in a generation opportunity.” During a very public consultation last winter more than 600 residents filled in an online survey. A huge 85 per cent of respondents approved town council plans to acquire the site for community use, including the option of lower cost housing for key workers. The remaining 15 per cent expressed some concerns about whether the council had the required funding or expertise to deliver such a significant development project.