DD2062 Newington Butts site access

Type of decision: 
Director's decision
Code: 
DD2062
Date signed: 
17 November 2016
Decision by: 
Jamie Ratcliff, Assistant Director of Policy, Programme and Services

Executive summary

This report recommends a financial settlement to resolve a site access issue affecting the Newington Butts development.

 

Decision

The Executive Director approves a reduction of £150,000 in the overall land receipt for disposal of Newington Butts.

 

Part 1: Non-confidential facts and advice

Introduction and background

    Newington Butts is a site that GLA Land and Property (GLAP) inherited from the Homes and Communities Agency (HCA) via the 01/04/2012 Localism Act transfer. The HCA had inherited the site from English Partnerships. The latter organisation purchased the site in 2004 and appointed a developer who obtained planning consent in 2008 but did not proceed to start on site. 
Following a restricted OJEU procurement process, GLAP appointed Newington Butts Developments Limited (NBDL) on 11/07/2013 (MD1240) to develop the site on the basis of the 2008 planning consent. In March 2014 there was exchange of contracts for an agreement for lease and on 04/02/2015 (with approval via MD1444) a building lease was signed allowing start on site, which happened the same month.

The 2008 planning consent assumed that vehicular traffic would enter the site via Dante Place and exit at the opposite end. Earlier in 2016, the developer became aware that L.B. Southwark owned Dante Place but it was not an adopted road. That meant that, unless L.B. Southwark was willing to adopt the road or agree an alternative access arrangement, the consented design was no longer viable. After protracted negotiations, L.B. Southwark has agreed to adopt Dante Place in exchange for £150,000 worth of roadway improvements. The recommendation is to cover this amount through a reduction in the purchase price.

GLAP staff involved in the tendering process were unaware of this access issue. This arrangement is recommended to prevent the development from failing to proceed.
 

Objectives and expected outcomes

2.1    The objectives are the following. 

a.    Maintain viability of the consented design.
If L.B. Southwark adopts Dante Place, this will resolve the access issue, maintaining viability. It would also maintain the momentum of this development, which includes a 46-storey tower. Construction activity has already gone beyond the 30th storey, so it would be disastrous if it stalled now.

b.    Minimise loss of income to the GLA.
Originally there was a danger that L.B. Southwark would treat Dante Place as a ransom strip requiring a payment of millions of pounds. Lengthy negotiations, have produced this more  reasonable settlement.
 
c.    Avoid any change that would risk undermining the previous OJEU competition.
In part 2 of this report, there is confirmation that reducing the land receipt by the amount proposed would not have changed scoring of the tenders, i.e. the same tenderer would have been successful. 
 

Equality comments

Those with protected characteristics are more likely to be in housing need, and this scheme will produce 457 homes, of which 179 will be affordable homes. People with disabilities will benefit since the planning consent requires that 10% of all the homes are capable of being converted to wheelchair standard.

 

Other considerations

To implement the recommended change there would need to be a deed of variation to the existing     building lease for Newington Butts. 

This disposal was completed with a deferred purchase arrangement, i.e. most of the GLAP receipt is due on completion. That means that GLAP can reduce the remaining land receipt by £150,000, which is the amount the developer has to pay to L.B. Southwark. 
 

Financial comments

See part 2 confidential section of the Decision