DD1461 Manor Road Retail Park Legal and Valuation Costs

Type of decision: 
Director's decision
Code: 
DD1461
Date signed: 
23 February 2016
Decision by: 
David Lunts, Executive Director Housing and Land

Executive summary

On 9th December 2015, Housing Investment Group (HIG) endorsed expenditure of up to £70,000 to cover the necessary professional fees  (legal and property valuation) to facilitate work relating to tenancy regulation,  land valuation and legal fees relating to the  disposal for development of the Manor Road Site. 

This Director Decision seeks approval of such expenditure of up to £70,000 to appoint:
•    Eversheds LLP (legal advisors) through TfL’s Legal Framework arrangements to undertake work to regularise tenancies and complete the land sale arrangements; and 
•    Property advisors through TfL’s Framework arrangements to undertake a valuation of the site. 

 

Decision

Executive Director approves expenditure of up to £70,000 to undertake the required valuation and legal work to regularise the tenancies and complete the land sale of the site in Manor Road, Canning Town.

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    In February 2015 Gort Scott was commissioned from the Mayor’s Architecture, Design and Urbanism Panel, through a competitive process, to provide a development capacity study for the site in Manor Road in order to understand the potential for residential development. This capacity was also considered in respect of the other land surrounding the site.

1.2    Discussions are underway with adjacent landowners (LB Newham and the English Cities Fund) regarding potential packaging of the Manor Road site with these wider site, in line with the preferred policy option set out in the Canning Town and Custom House SPD.

1.3    GLAP is keen to ensure that Site development comes forward, not just in order to deliver much needed new housing in Newham, but also in order to provide a receipt to the GLA, which in turn will help to fund the operation of the GLA and delivery of the Mayors strategies and policies.

1.4    An open market valuation will be undertaken to establish the value of the site to ensure that Best Consideration is achieved in any arrangements to dispose of the site. This valuation will be undertaken to Red Book standard by a RICS accredited valuer, appointed using the GLA’s property framework.

1.5    Should a disposal be agreed, a paper will proceed to HIG and for Mayoral Decision to approve the terms and structure of any arrangement. However, before that can take place, GLAP needs to be confident that the proposed agreement ensures that its interests remain suitably protected and that returns are maximised.

1.6    Eversheds LLP will provide legal advice on all matters including the regularisation of existing tenancies on the site and the drafting of any option/disposal contracts. 

 

Objectives and expected outcomes

2.1    Following endorsement from HIG for the long term disposal route of the site; the valuation of the site and the appointment of Eversheds will ensure in the short term, the cost and liabilities are minimised for the site, alongside the long term ambition to deliver a comprehensive residential development. 

2.2    This ultimately will lead to a land payment to the GLA, alongside the delivery of new homes on GLA land in London Borough of Newham. 

 

Equality comments

3.1    The proposed disposal of Manor Road Retail Park as a housing led scheme is aimed at implementing the Mayor’s policies set out in the Mayor’s London Housing Strategy. In January 2014 the GLA published an integrated impact assessment (“IIA”), including an equalities impact assessment, of that strategy. The policies related to increasing housing supply, of which this paper relates, were covered by the Integrated Impact Assessment (IIA) for the Further Alterations to the London Plan. 

3.2    The IIA concluded that updating housing projections and targets would support the delivery of sufficient housing and may help stabilise housing prices, supporting equal opportunities throughout communities. Furthermore, the provision of housing, including maximising the delivery of affordable housing would be in line with other policies of the Plan (e.g. Policy 3.5), ensuring that the needs of different groups are taken into account in the housing design.

3.3    The delivery of new and additional homes at Manor Road will help to implement Objectives 1, 2, 3 and 4 of the Mayor’s Equalities Framework “Equal Life Chances for All” (June 2014) through the creation of new homes, housing products and well-designed housing schemes.

3.4    Pursuing a residential-led scheme will meet the objectives of LB Newham as set out in its Core Strategy to provide affordable, lifetime homes for its residents, with exemplary urban design and sustainable development.

 

Other considerations

4.1    There are no further considerations for this report.

 

Financial comments

5.1 This decision requests spend on Legal and Valuation costs up-to £70k, which will be funded from the revenue Land and Property programme budget allocated to Manor Road in the first instance (around £60k), with additional £10k  to be funded from the forecast underspend within the overall Housing and Land budget.

5.2 Any additional expenditure exceeding the requested amount of £70k should be accompanied by a separate decision to establish the source of that funding.

 

Planned delivery approach and next steps

Activity

Timeline

Procurement of Eversheds LLP

Feb 2016

Redbook valuation of site

Feb 2016

New leases agreed

Q4 2015/16

Confirmation of disposal route

Q4 2015/16

HIG / MD approval

March 2016