Archive for March, 2009

Finance matters

Author: Cyril Richert

Metro Shopping Fund is the joint venture between Delancey and Land Securities who submitted the proposal for Clapham Junction re-development (read about their latest brochure here)

In an article published last year, the Daily Telegraph wrote: “Cash is king… and Delancey’s got plenty“. Delancey is the property company Jamie Ritblat set up when he left British Land (then, managed by his father) in 1995. Father and son are now working in Jamie’s company. According to the Telegraph, “just weeks before the credit crunch effectively froze the commercial property market in August, Delancey completed the last of a tranche of deals that saw it sell £1.5bn of investment, largely office, property. Six months later, that sector of the market had fallen by between 10pc and 20pc. At the same time, the father and son team were out talking to investors to raise Delancey’s largest fund to date, the €1.5bn (£1.1bn) European evergreen fund. Add debt to that and the pair have firepower of anything up to €6bn. […] By creating a fund that has no fixed life, Delancey has a pool of cash it can tap into as and when the company chooses.“.

On the other hand, Land Securities does not seem that lucky. Land Securities is Britain’s largest property company and got the go-ahead for its project of building a huge redevelopment in London’s Victoria last month.  As you can read in our previous article on section 106 (also known as section 106 agreement), planning obligations can include the payment of cash to the council – to recompense, for example, the loss of public space – contributions towards infrastructure, or a minimal level of affordable housing on a site. But the Land Securities felt short in providing affordable housing (claiming it was outweighed with other benefits of the £1bn proposal) in a desperate move to save money.

The game in the current economic torment  is to increase the financial payback  from schemes at the expense of section 106 contributions. Last month, an independent report for the government warned that “there will be pressures to change and renegotiate section 106 agreements“. “Many developers do not feel there is sufficient profit in schemes now to deliver numbers agreed in more optimistic times,” said the report by Professor Michael Parkinson, director of the the European Institute of Urban Affairs, quoted by the Financial Times.

This is already what happens for Clapham Junction redevelopment as Metro Shopping Fund’s commitment is about £40m for CJ station improvement if they can build their two tower blocks (to be compared with about £40m that could be funded by the Government and Network Rail independently – and even £60m was asked by NR last year but turned down). For that, they cannot provide affordable accommodation, they told the Council. But the Valuation Office report does state that should permission be granted, the development would be unlikely to start in the near future and given the length of any build programme (here 3 years minimum – it won’t be achieved for the East London Line and the Olympic Games anyway), the economic conditions are likely to be different at the end of the programme.

Last but not least, there is not certainety (although as said above we are not talking about small players, but everyone has got issues) that the development will go ahead, should the permission be granted. By getting planning permission for a tower that would quadruple the amount of development on a site, the developer quadruples the site value without laying a brick. This additional value is then sold off for cash or simply sits in the developer’s portfolio, acting as a collateral acquisitions. This is apparently what was planned for the Battersea Power Station redevelopment where the developers did not intend to build anything at the Power Station and were just procrastinating while the condition of the building deteriorates (the Dyson tower was a good way of wasting 2 years in a public inquiry but it was so blatantly ridiculous, that they had to withdraw it).


March 5, 2009 at 2:30 pm

A better consultation

Author: Cyril Richert

In his letter to the developers, Wandsworth Council planning officer was asking for further and better consultation: Mr Hunter acknowledges the campaign for additional consultation including the provision of scale models at the station and requests Metro Shopping Fund to consider whether they would like to be involved in such an exercise.

I was talking recently with Jane Ellison about the consultation and was actually deploring the fact that instead of consulting ahead, presenting to the residents different solutions and requesting feedback, it seems that the preferred option is to push ahead only one solution, and wait until numerous effort is spent to oppose it (think about the Putney towers or the Battersea Power Station redevelopment).

However this approach can work. As Simon Jenkins was quoting the example of Paris in his recent article in the Evening Standard, we have over there a good example of major station/shopping mall redevelopment.

plan-de-metro-parisLes Halles, located at the heart of Paris, is a major transport hub (actually the largest subway hub in Europe) with a convergence of three lines of RER (a network of express underground lines) leading out of the city to the south, east and west, the completely automatic and newest metro line Meteor, and 3 lines of standard metro. You have currently 800,000 travellers a day, tens of thousands of neighbours, of visitors, of customers of the numerous businesses, in total 40 million people a year. Also, Les Halles is a large commercial centre in Paris. The budget (although certain to rise in the future) is at present £150-£200 millions.

I know we are focusing on Clapham Junction, and some will say it is not as important… or as romantic as Paris ( :-p ), but you certainly noted some similarities in term of transport importance and budget.

So, what happened? In 2005, the Mayor of Paris announced a vast new initiative: a complete change and reconstruction of Les Halles. The base line is a concept that will still be satisfactory in 25 years time.

In order to do so, a competition was organised, and exhibition available to visitors. The first architecture competition for a new Halles in 2004 failed to convince, and of the four finalists — the others were Jean Nouvel, Rem Koolhaas and Winy Maas — only Mr. Mangin’s conservative proposal for the gardens was retained. A new competition was organized, with Mr. Berger and Mr. Anziutti now chosen from among 10 finalists, including Massimiliano Fuksas, Toyo Ito and Paul Chemetov. So for the same budget as CJ redevelopment (even less apparently), the discussion and competition was much better!

The chosen design (press release here in French) will in effect reach 66 feet below the ground to the roof of the station, though the shopping areas will remain largely intact. The principal novelty will be a so-called patio, measuring roughly 215 feet by 150 feet, which will be open to ground level and protected from the elements by the canopy (the CJ proposal includes also a canopy).

Amazing, isn’t it? It does not have towers… French must be magicians, they don’t need to build tower blocks everywhere to restore and improve a major transport hub and town centre area!

Berger-Anziutti - Les Halles (Paris) - Canope 1 Berger-Anziutti - Les Halles (Paris) - Canope 2

Other designs (once again you will notice that nobody is proposing a tower block on top of the major transport hub!), not approved, were :
















March 4, 2009 at 3:55 pm 8 comments

Section 106 dictating our landscape

Author: Julia Matcham

First, trying to sum up what has been going on regarding Clapham Junction development plans, one has to go back a bit to really understand the Council’s motivations. It is fairly boring to read the extracts from the Council’s Core Strategy Doc. (see at the bottom of this article for further explanation), but only by getting the idea of the dynamics which affect all Councils can one appreciate the impact of Section 106. (Click here to see description of possible agreements under the act as spelled out by lawyers offering their services, but if you Google Section 106 it will bring up this famously useful section as top of a long list of items on the subject).

Briefly, Section 106 is part of Planning Law by which the side effects of a given planning consent are paid for by the developer. For example a large development may have peripheral effects re-, for example, road relocations, road signs, re-plantations of trees, etc, and the legality of recompense, financial or in terms of works, for such events is built into Section 106.

While it sounds rational, it is easy to see that this act is open to abuse, effectively facilitating bribery and extortion depending on the participants desires to get what they want. It is hard to imagine that Councils do not bargain necessary local works to be implemented against planning consents granted or that developers of large projects don’t foresee a percentage of notional profit going to the Council for ‘this and that’ !

This is exactly what seems to be happening where the Ram Brewery (Wandsworth Town Centre) development is concerned, where the developers propose to deal with the current road bottleneck system in return for 11 tall buildings, two of which are actual tower blocks. It is also what is happening in the current (I think) stalemate between the developers of the Power Station Site and the Council where they are trying to bargain a huge tower against restoring the Power Station. Otherwise no go! What is strictly legal regarding this Acts highly flexible possibilities must be a very difficult to determine.

Effectively something similar is happening at the Junction. According to Metro Shopping Fund they can’t afford to renovate the Junction (under Section 106) unless they can have two tower blocks, which also suits the Council who are bent on solving their housing targets. It certainly seems strange that the Councils ‘Core Strategy Document’ quoted below makes little or no reference to Network Rail whose job it truly is to make CJ fit for use, but instead happily talks about the development of the Junction as an oncoming fact. The impression one gets from the document is that, but for Mark Hunter calling the developers to account, and ourselves making a boring fuss about ugly tower blocks being inappropriate, the Council would have quietly achieved its ‘London Plan’ (see below) housing objective, together with ‘improving’ the Junction, in one happy bit of rewarding three-way bartering, achieved, thanks to Metro Shopping, and Network Rail (happy to be co-operative in return for getting its work, which it swears it couldn’t afford, done for it!).

Unfortunately, the Council cannot help but be a thick-skinned beast trying to fulfill objectives handed down to them by others. In their need to do this, ugly things like tower blocks become ‘taller buildings’ which become ‘interesting landmarks’ . They simply find justifications for what they want.

I have to say that to me, reading the Core Strategy document, it looks as though the Council have had this development in mind, together with its presumed Section 106 benefits, for long before we got to know anything about it.

If we allow Section 106 to dictate deal after deal where Councils get their work done in return for planning permission for Tower Blocks our local landscape will be transformed into an ugly, unsociable, inhuman-in-scale, boring, environment!

Councils must do better than this when considering major developments. We need to see more than one way of developing the Junction, more than one style of architecture to imagine in place and a general plan which includes the good of the current community living in the buildings affected.

The Core Strategy Document is the Council’s Bible and although they write it themselves they have to take into account Government protocols.
The following are just the most relevant passages.

Incorporated into it is this information:-

The London Plan:

  • Requires 7,450 new homes to be provided in Wandsworth over the period 2007/8 to 2016/17, with an annual target of 745. The Plan calls for 50% of all new homes in London to be affordable. Within this context, councils are to set their own targets to reflect local circumstances.
  • Designates Vauxhall/Nine Elms/Battersea as an Opportunity Area, where mixed development is promoted to accommodate both new jobs and new homes.
  • Identifies the town centres of Putney, Wandsworth, Clapham Junction and Tooting as Major Centres, and Balham as a District Centre, where retailing, services, employment, leisure and housing should be promoted along with opportunities for mixed development.

A bit further down is the line…

Seeks the promotion of tall buildings on suitable sites ….

So one gathers that the Council is doing what it is told …Again later it says:

There are redevelopment opportunities in Clapham Junction. The main issue here is how these opportunities could assist in providing the much needed redevelopment of the station.

No mention of Network Rails responsibilities!

Also from Core Strategy Doc.

Clapham Junction Station and adjoining sites

4.99 The station remains almost unchanged from its nineteenth century appearance.

Growing passenger numbers mean that its existing connections become cramped due to overcrowding. The increasing importance of Clapham Junction as an interchange warrants the creation of a station fit for the twenty-first century. It should have first class facilities for passengers, be inclusive in design, as well as being a quality civic building. The existing station approaches from the south and north offer a limited retail experience. The opportunity exists to re-structure the station approaches and provide an enhanced shopping area, together with a substantial residential and employment content. The good public transport connections to central London, Gatwick and Heathrow airports and south London and south-east England make the area a suitable location for high trip generating office development. Given the strategic importance of the station there may be justification for some taller buildings. These may help to reinforce and add visual significance to the town centre and a significant level of additional housing would make more efficient use of transport infrastructure, reducing dependency on car travel.

And then later …

The area may be suitable for taller buildings given the proximity to Clapham Junction Station. There is an opportunity to create a new urban public space of high quality. The Council considers there is potential for a Primary Care Centre to be located in Clapham Junction/north Battersea (see policy IS6 and supporting text).

And then later…

4.105 The Clapham Junction station proposals, as well as providing a modern accessible station, will offer potential to provide attractive modern shopping floorspace which should relieve pressure on the independent shops in Northcote Road, allowing this area to continue its specialist and complementary shopping role.

No mention of Network Rail. It is assumed that the developers will pay.

March 3, 2009 at 12:10 pm

Posters of the campaign

Poster credit: Julia Matcham

A few photos that you might have notice in February in the neighbourhood…

Stop the skyscrapers - shop window - credit: Julia Matcham Stop the skyscrapers - road - credit: Julia Matcham Stop the skyscrapers - road2 - credit: Julia Matcham

March 2, 2009 at 1:17 pm

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