MD2456 Excel Centre (Plots WE4A and WE4B)

Type of decision: 
Mayoral decision
Code: 
MD2456
Date signed: 
11 June 2019
Decision by: 
Sadiq Khan, Mayor of London

Executive summary

In February 2017, Mayoral Decision (MD) 2073 agreed the redevelopment of three plots on the Excel estate in the Royal Docks, which together will include 901 homes. One of the three plots already had planning permission (for 105 homes), and the agreement set out the need for 35 per cent affordable housing on the remaining two plots (WE4A and WE4B) in accordance with the planning policy requirements for ‘fast track’ consideration for private land. Although GLA Land & Property Limited (GLAP) is the freeholder of the land, a 200-year lease was granted to London International Exhibition Centre Plc (Excel) in 2001 meaning the site is de facto private sector. MD2073 included a commitment that the GLA would, nonetheless, work to increase the level of affordable housing. Following extensive negotiations with the developer and the London Borough of Newham, this MD seeks approval for GLAP to adjust the commercial terms of the agreement authorised by MD2073 to increase the level of affordable housing across the two undeveloped plots to 40 per cent on the 796 homes (by habitable room).

Decision

That the Mayor approves:

1. An increase in the level of affordable housing on two plots (WE4A and WE4B) on the Excel estate from 35 to 40 per cent; and

2. A consequent adjustment in the terms of the commercial agreement with Excel, and their Joint Venture (JV) with Mount Anvil, regarding the development of these plots (as set out in Part 2 of this MD).

Part 1: Non-confidential facts and advice

Introduction and background

In 2001 the London Development Agency (LDA) signed a 200-year lease with London International Exhibition Centre Plc (Excel) as part of the development of the centre and surrounding estate. Since then, the Excel centre has become very successful and attracts over four million visitors each year. It makes a significant contribution to the regeneration of the Royal Docks, which is London’s only Enterprise Zone and a major focus of investment for the Mayor of London and the Mayor of Newham.

The 2001 lease was primarily focused on the construction of the main exhibition centre but also laid out other development plots which have gradually been developed, largely around the western end of the estate. The lease contains mechanisms for GLA Land & Property Limited (GLAP), as the current freeholder, to receive a capital sum from the development of these plots.

Through Mayoral Decision (MD) 2073 of 10 February 2017, GLAP agreed to Excel proceeding with three of these plots (WE4A, WE4B, and WE5B), which Excel wished to redevelop for residential use with its development partner, Mount Anvil. The development across the three plots will deliver 901 homes, and under the Excel lease GLA approval was required to proceed. The WE5B plot already had planning permission so only the arrangements relating to the redevelopment of plots WE4A and WE4B were detailed. The arrangements for these two plots were documented in an agreement with Excel on 26 April 2017 called the Umbrella Agreement.

MD2073 noted that the proportion of affordable housing on these two plots was 35 per cent in line with ‘fast track’ planning requirements for private land. The MD highlighted the commitment to seek to increase the level of affordable housing. This MD seeks approval to vary the terms of the commercial arrangements to secure an increase in the affordable housing from 35 to 40 per cent.

Objectives and expected outcomes

The plots concerned are within the Excel estate in the Royal Docks and they are owned by Excel (LIEC Limited) via a long leasehold interest granted in 2001, with GLAP being the current freeholder. As the lease was granted for 200 years, the sites are considered privately owned for the purposes of the Mayor’s Affordable Housing and Viability Supplementary Planning Guidance (2017).

The proposal is to adjust the commercial terms of the Umbrella Agreement in exchange for an increase in the level of affordable homes on plots WE4A and WE4B from 35 to 40 per cent. This increase will help to support the Mayor’s housing policy and the aspirations of the draft London Plan.

Equality comments

Under section 149 of the Equality Act 2010 (the “Equality Act”), as a public authority, the GLA must have ‘due regard’ to the need to eliminate unlawful discrimination, harassment and victimisation, and to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. Protected characteristics under the Equality Act comprise age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation and marriage or civil partnership status.

When considering the needs of the existing community and those that will be affected by the proposed development (both currently and in the future development scheme), any development activity will look to minimise disadvantages to all protected characteristic groups within society. This decision is therefore expected to have positive impacts on persons with a protected characteristic under the Equality Act, as increasing the supply of housing in London will help to address problems such as overcrowding and homelessness, which evidence indicates disproportionately affect specific groups, including those with protected characteristics.

London Borough of Newham has recently refreshed its Local Plan and this has highlighted the need for additional affordable housing.

Other considerations

Risk comments are set out in Part 2.

Financial comments

This decision seek approval to increase the affordable housing on three plots of land at the Excel Centre. There will be a reduction in the GLAP land receipt from the development of the land to compensate the developer. The payment to GLAP will also be delayed.

Activity table

Activity

Timeline

Planning decision by London Borough of Newham

April 2019

Mayoral Decision

June 2019

Revised legal agreement

July 2019

Start on site

Early 2020

Completion

2022/23