Property developer Lugano has sued Northumberland County Council £13 million over its delayed 2,000 homes plan.
Lugano is behind the controversial Dissington Garden Village housing scheme in the north of England.
Initial permission to build 2,000 homes was granted under the council’s previous Labour administration, but when the Conservatives took control in May last year the county’s planning framework was scrapped, putting the Dissington project under review.
Lugano claimed the move cost it vast sums of money and has alleged “a number of serious issues of misconduct” in how the case was handled by the council, its leader Coun Peter Jackson, Coun John Riddle, the cabinet member for planning and housing, and chief executive Daljit Lally.
All deny any wrongdoing and the council said it “acted lawfully and reasonably”, according to the Evening Chronicle.
A leaked letter highlights an alleged loss of £13,305,403 as a result of delays to the expected obtaining planning permission.
Lugano claimed it reasonably anticipated that it would have secured full permission by January 2018 after receiving an initial “minded to approve” decision in July 2017.
It said it had to use expensive finance methods until it could secure full planning permission, but was expecting to re-finance more cheaply after this point, and that it had to spend far more on interest than it otherwise would have.
It claimed it was also required by lenders to make a “significant capital payment” and was hit with a number of fees.
In another letter, Lugano alleges that Jackson and Riddle improperly put pressure on former head of planning Mark Ketley to find a way to refuse permission for the development.
A spokesperson for Northumberland County Council said: “We have received further correspondence from the Lugano Group and are taking legal advice in this regard. As previously advised, we believe that the council has acted lawfully and reasonably throughout this process.”