MD1609 Haringey Heartlands Disposal

Type of decision: 
Mayoral decision
Code: 
MD1609
Date signed: 
12 February 2016
Decision by: 
Boris Johnson MP (past staff), Mayor of London

Executive summary

The disposal of the GLA’s interest in Haringey Heartlands to St William Homes was endorsed at HIG in November 2015, along with the accompanying financial commitment. 

This paper seeks mayoral approval for GLAP to dispose of its long leasehold interest (which will be disposed alongside London Borough of Haringey’s (LBH) freehold interest) in the Olympia Trading Estate (OTE) directly to St William Homes LLP, (the joint venture between National Grid and Berkeley Homes). This paper also seeks approval for the associated expenditure required to fulfil our statutory and planning obligations in order to dispose of the site.
 

Decision

The Mayor approves:
 
1)    disposal cost of £750,000 which includes the payment of c. £70,000 historical project costs to National Grid; and
2)    disposal of the land and buildings at Olympia Trading Estate on the terms set out in the Part 2 confidential section.

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    Previous approvals relating to this matter include DD1121 seeking expenditure for site investigation works and disposal costs.

1.2    The London Development Agency (LDA) acquired the 125 year long lease of the Olympia Trading Estate (OTE) in March 2004 (now held by GLAP) to secure a land interest to facilitate the future comprehensive regeneration of the site now known as Haringey Heartlands (HH). 

1.3    OTE is an industrial estate comprising five warehouse units, all tenanted on short leases contracted out of the 1954 Landlord and Tenant Act, with the exception of one unit. Further details can be found in Part 2 (reserved).

1.4    The HH project commenced in 2006 when the LDA, LBH and National Grid (NG) agreed to combine their land assets to facilitate the comprehensive regeneration of a larger 4.6 hectare (11.2 acres) site known as Haringey Heartlands. 

1.5    The HH site is located approximately 600m to the southwest of Wood Green town centre, to the southeast of Alexandra Park and 200 metres north of Hornsey Railway Station, within the administrative boundary of LBH. It comprises significant areas of vacant and non-operational utilities land (including two gasholders), in addition to OTE to the north.  In 2008 LBH constructed and opened a new spine road running north south through the centre of the NG land.  A plan is included at Appendix 2.

1.6    The three partner land interests cover two distinct plots as follows:

•    GLAP: Olympia Trading Estate long lease - 2.08 acres (0.84 ha) equating to 19% of HH site by area;
•    LBH: Olympia Trading Estate freehold - 2.08 acres (0.84 ha) equating to 19% of HH site by area; and
•    NG:   Gasholder site freehold – 9.04 acres (3.55 ha) equating to 81% of the HH site by area.

1.7    A detailed explanation of the long lease acquisition, existing tenancy position, rental income and statutory protected tenancy relocation compensation issue can be found in  part 2 (reserved).

1.8    In November 2014 NG announced their intention to form a joint venture with Berkeley Homes called St William LLP with the objective of bringing forward residential and mixed use schemes on surplus NG sites including the site at HH. This has removed the uncertainty surrounding the identity of the eventual developer of NG’s land interest and necessitated a re-evaluation of the optimum route to market for GLAP.

1.9    GLAP requires Mayoral approval to dispose of its interest to St William by way of a straightforward land disposal, subject to restrictions on the use of the site to residential.  St William endorses this approach and has made an offer to GLAP for our part of the site.  LBH are also supportive of this position and have cabinet approval to dispose of their freehold interest to St William.  

1.10    A sale agreement has been drafted which includes a buyback option in the event of non-delivery, and a restriction on the use of the site to residential-led.  The offer has been signed off by our valuation advisors as being at market value (further details in Part 2)

 

Objectives and expected outcomes

2.1    As endorsed by HIG GLAP intends to dispose of its interest in OTE for market value and in order that SWH can deliver homes in accordance with the planning permission and receive a capital receipt.

 

Equality comments

3.1    The GLA’s public sector equality duty has been considered in relation to this recommendation and no specific issues have been identified as a result.

 

Other considerations

a)    This course of action is considered low risk as it is a straightforward disposal with appropriate measures to ensure residential delivery.

b)    This disposal will accelerate the delivery of housing on site as St William have obligations regarding starting on site.

c)    The site has an existing planning permission which was subject to the statutory public consultation.

Financial comments

See Part 2

 

Investment and Performance Board

7.1    HIG public minutes noted the following from 10th November 2015:
That the disposal of the GLAP-owned part of the site directly to St William subject to achieving best consideration, including a buyback option and restriction on the use of the site to residential-led be endorsed;

7.2    That the recommendations set out in the private minutes be agreed.

Planned delivery approach and next steps

 

 

Activity

Timeline

Exchange of Sale Agreement

Jan 16

Completion of Sale Agreement

May 16

Start on Site

Q1 17

Indicative finish on site

2024

 

 

 

Appendices and supporting papers

Site Plan