A HOUSEBUILDING firm has backed out of funding a new arts venue in Yate amid increasing losses on the Sea Stores site.

Taylor Wimpey has told South Gloucestershire Council the former Royal Navy storage site, on Kennedy Way, will be financially ‘unviable’ if the company is forced to pay more than £1.1million in community contributions.

Under what is known as a Section 106 agreement with the council, Taylor Wimpey had agreed to contribute £150,000 towards a community building as part of its planning permission to build 228 homes in a development which will be known as Elswick Park.

But national partnering manager Simon Lovell said the land his firm bought for £14million in 2007 was now only worth £7million.

"Taylor Wimpey purchased the site when the economy was buoyant," said Mr Lovell.

The company is applying to reduce its contributions to open spaces by more than £200,000, scrap the community building money and reduce the number of affordable homes it builds. Mr Lovell said he hoped some of the money saved, along with government grants, could fund the 33 per cent of affordable housing required by the council.

Said Mr Lovell: "It is obviously regrettable that we cannot deliver more affordable housing, but as an alternative, if the council can consider a reduction in the S106 contributions, this will obviously facilitate the delivery of more affordable dwellings."

Cllr Ruth Davis (Lib Dem, Yate Central) said the community would lose out.

"I understand the problems developers have but I am really concerned about the long-term effect of reducing these requirements," she said.

"The community will lose out. There will be more cars on the roads, more people in the town but fewer facilities to mop that up.

"We have spent years trying to get things right for Yate and recently there have been some big improvements like the new health centre, refurbished library and leisure centre. We need to make sure there is enough for everybody.

"There is already a stream of developers doing this and I can see lots more of this happening in the next few years."

Council planning officer Robert Nicholson said the community building would have required additional funding but the site was ‘strategically’ important for future development.

In a report to the authority’s planning committee which is due to meet today, Mr Nicholson said: "Members will be aware of the strategic importance of maintaining development on this site and its contribution towards the council’s five-year land support position.

"On this basis, officers considered it necessary to reconsider the current S106 obligations whilst ensuring the Sea Stores site remains a sustainable development with a mixed and balanced community."