DD2076 Royal Albert Dock – Second Deed of Variation

Type of decision: 
Director's decision
Code: 
DD2076
Date signed: 
23 December 2016
Decision by: 
David Lunts, Executive Director Housing and Land

Executive summary

GLA Land & Property Limited (GLAP) entered a Development Agreement with ABP London Investment Ltd on 23 May 2013 for the regeneration of Royal Albert Dock. 

ABP submitted their Business Plan for Phase 1 of the scheme in October 2016. The plan sets out ABP’s proposed approach to the delivery of phase 1. These proposals require a minor variation to the Development Agreement to ensure the continued protection of GLA’s commercial interests.

 

Decision

The Executive Director of Housing & Land is asked to APPROVE the proposed changes to the Development Agreement and enter into a Deed of Variation to document the changes.

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    GLA Land and Property Ltd (GLAP) entered a Development Agreement (DA) with ABP London Investment Ltd (ABP) on 23 May 2013 for the regeneration of Royal Albert Dock. When complete, the site will be a new commercial business hub in the east of London, supported by substantial retail, leisure and community facilities and transport infrastructure upgrades.  The development is designed to attract investment from Chinese and Far Eastern companies seeking to establish a UK presence as well as London based companies seeking to relocate.  
1.2    Hybrid planning permission was granted for the scheme on 22nd December 2015 and provides consent for:
-    4.7m sqft GEA of development comprising;
-    3.29m sqft of office space
-    935,000 sqft of residential development (up to 845 homes)
-    165,824 sqft of retail/leisure floor space
1.3    The project has moved into its next phase and GLAP is working closely with ABP to enable a start on site in early 2017. Early enabling works have already been completed to prepare the site for construction.
1.4    Before it can draw down the head lease for phase 1, ABP must satisfy a range of Conditions Precedent. Good progress has been made in recent months to close out these conditions. In particular:
-    GLAP has approved ABP’s Annual Business Plan  
-    GLAP has approved the identity of the Building Contractor (CITIC and Multiplex)
-    ABP has entered the Building Contract for phase 1
-    An escrow account has been opened, ready for ABP to deposit GLA’s development security
-    The head lease for phase 1 has been drafted and is close to agreement
 

Objectives and expected outcomes

2.    Phase 1 Business Plan
2.1    ABP submitted its Business Plan for Phase 1 to GLAP in late October 2016. Under the terms of the DA, ABP must secure GLAP’s approval to this plan and this too is a Condition Precedent to the grant of the Phase 1 head lease.
2.2    GLAP has closely scrutinised the plan with input from its legal and property advisors. The plan includes ABP’s proposed corporate and development structure. As a result of this proposed structure, a minor amendment to the DA is required to protect GLAP’s commercial interests. Further details are in part 2 of this paper.
 

Equality comments

3.1    It is not anticipated that the recommended amendments to the Development Agreement will have a negative impact on any groups identified under the Equality Act 2010.

 

Financial comments

This paper is seeking approval for changes to the DA.

 

Planned delivery approach and next steps

Activity

Timeline

Complete deed of variation

23 December 2016

Relevant entities to sign a deed of adherence

23 December 2016

Start on site

Spring 2017