Quintain award Sisk £211m Wembley Park 'build to rent' contract

I reproduce below a press release from Quintain and will note only that the homes will be 'no more than 80% of market rent' - 80% is not of course affordable for those on the Council waiting list and it would be useful to know how many, if any, will be let at a significantly lower rent.

--> Quintain, the developer behind the transformation of Wembley Park, has awarded its largest ever construction contract to Sisk. The £211m contract will deliver Canada Gardens, which comprises 743 new Build to Rent homes across seven buildings and will be Sisk’s ninth project at Wembley Park.

Canada Gardens is Quintain’s latest scheme at Wembley Park and is entirely designed and purpose built for rent. Of the 743 new homes delivered, 303 of these will be London Housing Bank equivalent units and will be rented at no more than 80% of market value, including service charges, which is consistent with the London Plan thresholds for intermediate affordable housing.

These new homes – which will all be managed by Quintain’s build to rent business, Tipi – will widen Wembley Park’s family appeal with over 300 of the homes provided as two and three bed units. Shared facilities include a podium level play area and a spectacular new park with a number of activities for children. Meanwhile pet owners will be well catered for with a special dog walking area and pet garden.

The shared roof terrace will provide views of London and Wembley Stadium and residents will also have access to a club house, BBQ area, allotments and a one acre podium garden. Access to all the homes will provided via a super lobby which will also be home to a new centralised Tipi HQ and marketing suite.

This will be Sisk’s ninth project at Wembley Park in a productive 12 year history of working with Quintain in transforming the area.  During this period they have successfully delivered the 475 home Emerald Garden development, London Designer Outlet, the Hilton London Wembley Hotel and the reconfiguration and refurbishment of the Grade 2 listed Wembley Arena now the SSE Arena, Wembley.  

Angus Dodd, Chief Executive of Quintain commented:

“Sisk has delivered eight successful projects to date at Wembley Park and has been a trusted partner for 12 years. I am delighted to continue our partnership with Sisk by awarding them our biggest ever construction contract. All contractors on Quintain’s main framework are valued partners and members of a team working together to bring London property and places to life.

“The Canada Gardens development will be a fantastic new collection of purpose built rental homes which will appeal to families, couples, sharers and single people both young and old, demonstrating that Wembley Park really is a place for everyone.”

Stephen Bowcott, CEO of John Sisk & Son said:

 “At Sisk we are very proud to celebrate another milestone in the important relationship between ourselves and Quintain, who are an immensely valued client for us. We have used our previous experience over the last 12 years working with the design teams to drive efficiencies in to the project. We always look to add value to the design process with our early input and we will continue to work closely with Quintain as our trusted partner on this latest phase of the development at Wembley Park.

“It is important to us that we maintain the highest standards of project delivery and quality with a health & safety record that makes both organisations proud. We also look forward to maintaining our excellent relationship with the design team and with the community here in Brent.  Our recent “Pride of Brent” Award recognised that we are contributing to the local community by employing 40% of local labour on site.  We are delighted to give back to the local economy in this, and many other ways, with our joint engagement programmes.”

Sisk is a member of Quintain’s main contractor framework and based on its experience and long standing relationship with Quintain it was selected as the preferred main contractor to deliver Canada Gardens.  Quintain’s other contractors on site are Wates, McAleer & Rushe, McLaren and O’Keefe.

Cabinet warned over 'dealing with a convicted fraudster' in Bridge Park development

Cllr Dan Filson, Chair of Scrutiny,  made a dramatic intervention in the discussion of the Bridge Park redevelopment at last night's Cabinet meeting.

He drew attention to a paragraph in the report about the Council's development partners:

General Mediterranean Holdings SA and Harborough Invest Inc are both in overseas ownership and not registered at Companies House, As such the process for carrying out financial checks on these companies cannot be completed in the normal manner and the required financial information in an appropriate format is awaited. Finalisation of negotiations and entering into Heads of Terms with these companies will be subject to confirmation of satisfactory financial standing.

 Filson pointed out that the companies were not registered at Companies House but instead were overseas registered, a Luxembourg Holding Company and the British Virgin islands. This meant that the usual financial checks could not be carried out.

The founder and chairman of General Mediterranean Holdings is Sir Nadhmi Shakir Auchi. In 2003 LINK Auchi was convicted of fraud following his involvement in a $504 million corruption scandal centred on the French oil company Elf Aquitaine which Wikipedia says was described as 'the biggest political and corporate sleaze scandal to hit a western democracy since the second world war.'

Auchi was given a $2.8 million fine and a 15 month suspended jail sentence. Filson warned that the council is dealing with a 'convicted fraudster'.

Earlier Philip Grant had posted this comment on an earlier blog LINK:

As Martin suggests, this article did attract my interest.

When offshore companies are involved, that will always raise suspicions about who is really behind them, and whether tax avoidance may be involved, although in this case you can read a little about GMH on Wikipedia:-

'The General Mediterranean Holding (GMH) is a financial holding company established in 1979 in Luxembourg City, in southern Luxembourg, founded by Anglo-Iraqi businessman Nadhmi Auchi.

GMH is a diverse business group with activities in Banking & Finance, Real Estate & Construction, Hotel & Leisure, Industrial, Trading & Pharmaceuticals, Communications & IT and Aviation.'

The (publicly available) details do not say in which overseas territory Harborough Invest Inc. is incorporated, or resident for tax purposes.

By chance, I have come across GMH's "agent", Nick Shattock, before, when I was an Inspector of Taxes, and he was a director of Quintain Estates and Developments Plc (having previously been a partner in a firm of City solicitors). That information is on public record, and (of course) I cannot disclose anything which happened when I was responsible for dealing with the Quintain group's company tax affairs, because of Civil Service confidentiality.

As a (past) director of Quintain (the developer behind Wembley Park), it is likely that Mr Shattock has already had dealings with Brent's Strategic Director of Regeneration and Growth, Andy Donald. The report to Cabinet proposes that negotiations over the "deal" between Brent and GMH should be left in the hands of Mr Donald (as the "deal" with Galliford Try over the Willesden Green Library Centre redevelopment was).

I have written before about Andy Donald's philosophy LINK but it is worth bearing in mind this particular comment of his:

The decision makers are never going to read all that text. There is a massive disconnect between the decision makers and the officers.

Andy Donald was unwell yesterday but the decision makers, the Cabinet, went ahead and approved the Bridge Park report.

I had pointed out in my earlier posting that the Officer's report made the Appendix on the sliding scale of affordable housing restricted so that the public are unable to see it. Cllr Margaret McClennan said that the developers had offered 10%  (50 homess out of the 500 planned) against the Council's target of 50%. She said that Brent Council wanted at least 30%. Cllr Pavey said the despite the gain of a leisure centre and swimming pool officers should be pushing for a greater amount of affordable housing.

Cllr Mashari said that the Cabinet should not get so caught up in the detail of affordable housing that 'we forget the marvellous facility that Brent would get through the development.'

Questioned about the fear that the housing would be sold abroad as had  happened at the Willesden Green Library development Cllr McClennan said that the Council would demand that the homes be first marketed locally.

The Recommendations adopted by the Cabinet 'delegate authority to the Strategic Director of Regeneration and Growth (Andy Donald) in consulation with the Chief Finance Officer and Chief Operarating Officer to enter into negotiations, finalise and enter into a land sale agreement with General Meditteranean Holdings SA and Harborough Invest Inc.'

Asked about how any issues that might arise from the negotiations and financial checks would be dealt with the Cabinet were told that the lead member, Margaret McClennan, would be consulted.

The fear that several members of the public were left with was that, given the overseas status of the companies involved,  Brent might be able to do little to persuade them on the proportion of affordable housing and marketing front.

Last days of the Palace of Industry, Wembley

Mark Cummins, Lib Dem councillor for Brondesbury Park, is reported in today's Wembley Observer as calling on Quintain Estates to 'rethink their plans to destroy one of the last remnants of the Wembley Empire Exhibition'. As you can see from the video, which was taken today, the destruction is almost complete and Cllr Cummins is too late.

Quintain estates turned down an appeal from local historian Philip Grant to at least leave one wall of the historic building, one of the first to extensively use reinforced concrete,  in time for celebrations of the 90th anniversary of the British Empire Exhibition which takes place next year.

Brent's lack of respect for our local heritage continues...

A photographic tour of the new Wembley

Many years ago I went to a sparsely attended exhibition at the now demolished Wembley Conference Centre about plans for the development of the area around Wembley Stadium.

When I commented that the artist's impressions made it look like Croydon a Labour councillor retorted, 'So what's wrong with Croydon'.

Recently I showed a colleague from the south of Brent around the new developments, including the Civic Centre and he was quite astonished.  He remarked that he seldom had need to come to Wembley except to visit the Town Hall so had  really little idea of the redevelopment taking place and the scale of investment involved.

There are probably many in Brent and further afield who have not registered the extent of the changes in what the Brent and Kilburn Times this week as 'glittering redevelopments transforming Wembley'.

There have been changes in Quintain's plans since those early days, not least the fact that family housing seems to have been put on the back burner despite thj shortage of such housing in Brent. Instead there are 2,500 student apartments in the pipeline and countless hotels. Perhaps the great risk is the dependence on retail with the set piece 'London Designer Outlet' at the centre of the strategy. The claim (hope) is that as the only such outlet within the M25 it will attract visitors from across London. Some big names have signed up and with the Outlet opening in Autumn 2013 we shall soon see if it successful.

Brent Council's aim is to retain visitors to the stadium so that they stay in Brent to celebrate rather than going up West but also to attract locals and visitors on non-event days.  A multi-screen cinema is planned and there is talk of an FA sponsored National Football Museum.  The Brent Civic Centre has been fully booked for hard-hat tours next Friday and Saturday but questions remain about its accessibility, including the library, on event days.

Locals have commented on the 'spoiling' of  the view of Wembley Stadium by some of the new development as well as what appears to be a muddle of new buildings and sume sunless 'canyons'  rather than the careful cityscape that was promised.

Watch the video and make up your own minds.

It's YOUR Wembley - Have your YOUR say

Trees on the famous  processional Olympic Way may be removed

By the time I visited on the afternoon of the last day only 120-150 people had visited last month's exhibition about the next phase of the Wembley Regeneration. This is a very small number when you think that this is the most important regeneration project taking place in Wembley and one of the biggest and most expensive in whole of London. However it was enough for Quintain, the developers, to conclude that 'a good number of people visited the exhibition over the course of six days and that the overwhelming majority of people welcomed the plans'. They will be submitting a planning application to Brent Council later this summer.

Quintain have recovered from a shaky period in  2008 when they reduced their Wembley project staff from 28 to 13. They recently agreed the sale of Pier Walk, the Transport for London building on the Greenwich Peninsula for £97m.

The exhibition was full of the pastel/line drawing artist's impressions we have seen before and it was hard to really envisage what is intended.  However I did dig out a few facts:

• Section 106 (funds from the developer to Brent Council ) trigger points in the development have not yet been reached despite the fact that Wembley City is up and running
• £9m towards schools in Wembley is listed as a future commitment - with a school places shortage we need the money now . £3.5m for road and junction improvements, £2.5m for education and training and nearly £2m for improved bus services are also some time in the 'future'
• The mature trees along Olympic Way on the Curry's Superstore side will have to be removed as the new buildings will abut the roadway. Quintain said said they would be replaced by trees of similar size in Arena Square.
• There are plans to run buses along the currently mainly pedestrian Olympic Way for the first time
• Despite earlier emphasis on a relatively traffic free development there are plans for 800 parking spaces in a multi-storey car park for the new shopping street and another 500 for the new homes
• The much heralded 'London Designer Outlet' will, according to staff at the exhibition, specialise in end of range and end of season bargains - not quite the high quality shopping experience first mooted
• Quintain did not take into account, and appeared to know little about, the proposed North West London Light Railway  which suggest a link to Wembley Stadium

To be fair there are plans for affordable new homes and  they will be built to Code for Sustainable Homes Level 4. Completed commercial properties will be built to BREEAM Excellent standard and Combined Heat and Power is 'planned in linked clusters with the ability to link into a district wide energy centre in the future'. Policy on renewables even vaguer, 'Solar panels or other renewables could be included on some buildings and green and brown roofs will encourage diversity'. Quintain argue that local people will use Wembley shops in the new development and this will reduce car use as presently drive outside the area to shop. They claim that their designs will favour pedestrians over cars.

Throughout Quintain and Brent Council have argued that the redevelopment will bring benefits to local people and that the stadium area will become a local resources as well as something for visitors. The low numbers attending the exhibition doesn't suggest crowds of Brent citizens are leaping around with enthusiasm. So let's ask, "What's in it for Brent?'

Quintain would argue:

• 2,500 new jobs in the new hotels, shops and restaurants and 400 during construction
• Up to(my emphasis) 1,300 new private and affordable homes with a range of 1,2 and 3 bedroom apartments (we will need details of the proportion that will be 'affordable')
• A new Civic Centre (Brent Greens remain sceptical of its benefits)
• A new local open space around the Civic Centre 'green, accessible for all, and planted with trees..'
• A new shopping street with around 30 new shops with a large 'anchor' store
• A range of new cafes, coffee shops and restaurants
• Affordable work spaces, including some suitable for the creative industries
• Nine Screen cinema to be opened by September 2013
• A new community pool and leisure facility on the site of Dexion House

Quintain's planning  application to Brent Council will be an 'Outline' application which will establish uses, layouts, heights and access principles, with 'Reserved Matters' applications to follow with the detailed designs before construction begins. There will be consultation on this and it is important that residents respond.  Too often the public respond on general principles at the detail stage, only to be told 'that has already been dealt within the 'Outline' application'.

Quintain will be circulating 60,000 homes and businesses with a Newsletter about the scheme.You can see an on-line version of the exhibition and booklet HERE and you can e-mail your view to info@yourwembley.com or ring Quintain's Wembley team on 020 7478 9277

THE WEMBLEY MASTERPLAN AND THE RECESSION

“The Masterplan is a long term plan that should reach far further than the current economic down turn. A wide range of studies have been conducted that provide confidence that the proposals within the document can be delivered.”
Brent Council response to concerns about the Wembley Masterplan, December 2008

Brent Green Party and other objectors to the Wembley Masterplan called for Brent Council to put the Plan on hold until a full analysis of the impact of the recession on the local economy had been carried out and the Council’s Climate Change Strategy was in place.

A report entitled ‘The Local Impact of the Recession’ was tabled at the Council Executive on 16th March 2009. The Climate Strategy is long overdue and there appear to be concerns over the adequacy of the Consultant’s report. It is essential that a long-term project should be based on such a strategy. Despite this vital missing ingredient the Executive is due to make a a decision on the Masterplan at its meeting on Monday April 6th.

RECESSION OVERVIEW
The Recession Report resists engaging in detailed economic forecasting but states, “In short we face possible deflation, continuing low interest rates, a continued lull in property and housing markets and unemployment rising and possibly peaking in 2011-12…….At the same time, the government borrowing to defend the economy and provide fiscal stimulus will put huge pressure on public finances.” (4.5)

The Council faced with challenges on the financial viability of the Masterplan had earlier said that funds would be available from the government or the GLA in the event that Section 106 funding was not available.

RETAIL
The Wembley Masterplan envisages 47,000m2 of retail, restaurants and bars and a ribbon of retail running from Wembley High Road to Wembley Park. The Recession Report reveals that employment in wholesale and retail in Brent stands at 22%, a greater proportion than the British average (5.5.2) which ‘therefore may be an area of concern’. Brent has a greater proportion of firms involved in wholesale and retail than the British average: “This may be an area of concern, as the retail-related industry is predicted to be one of the sectors most severely hit by the recession.” (6.1.2)

So retail is already disproportionate, is likely to be hit most severely by the recession, but forms the backbone of the Wembley Masterplan. The Masterplan stated that further retail development was dependent on the successful completion of Quintain’s Phase 1 Wembley Boulevard development. A ‘success’ that looks unlikely in the present economic climate and the competing attractions of Westfield and a refurbished Brent Cross.

HOUSING
The Report suggests that with the fall in house prices and sales at a 30-year low, there may be an increase in demand for temporary and social accommodation. “A consequence of this could be that more people will turn to renting or seeking council housing. Brent already has one of the highest levels of demand for housing in the country, where we are unable to meet even a small proportion of the existing demand.” (8.2.1)

The Wembley Masterplan envisaged the provision of 3,727 new homes of which 1,400 were to be affordable. Much of this would be financed by Section 106 receipts (money paid by developers to the local authority towards infrastructure improvements). However the Recession report notes, “A quarter of the local authorities surveyed by the Audit Commission state that they have seen falls in Section 106 receipts of more than 5%, which is of particular concern because about half of the affordable housing supply in recent years has been provided under Section 106 agreements.” After noting that school building improvement plans will also be affected the Report states, “Opportunities to generate improvements in public sector infrastructure through regeneration projects will also be affected. (10.5.4)

The Report notes that the current forecast is that, “Brent will struggle to achieve the LAA target to deliver 458 affordable homes annually between 2008 and 2011 by 17.4% due to delays or terminations of development schemes. Wembley regeneration schemes were also expected to contribute to the supply targets, but some of these sites will be delayed, as developers such as Quintain concentrate on the non-housing part of their development.” The Report expects new starts to “drastically slow” and “in some cases where construction has commenced developers are delaying internal fit outs that allow new homes to be habitable in the hope that the market will improve”.

So housing, and particularly affordable housing, is essential and a major part of the Masterplan but unlikely to be completed in the short or medium-term, and some, already largely completed, will not be coming on the market. The Report pins its hope on government action to stimulate the housing market despite the constraints imposed by the huge long-term debts incurred by the government’s recent interventions to stabilise the economy.

REGENERATION AND DEVELOPMENT
It is worth quoting the first paragraph of this section in some detail:
“The construction industry has been severely hit by the squeeze on credit, and delays in development schemes have had a negative effect on the pace of Brent’s major projects, for example timetables have been put back for Wembley development….The lack of credit and economic recession may well both stop and delay private development, which may adversely affect our regeneration ambitions in Brent.” (11.1)

This throws the whole rationale of the Masterplan into doubt. The argument that the Plan is a long-term vision beyond the current crisis cuts both ways. If it is long-term there is no need to approve it at present when the Report recognises that the extent, depth and longevity of the economic downturn is unclear. The argument that, “…the council use this as a period of opportunity in terms of the regeneration agenda through undertaking detailed planning work and establishing clarity of vision, so that development projects can be kick started when the upturn occurs” (11.2), seems to be based on an assumption that things will soon be back to normal – an assumption as we have seen that is not well supported by other statements in the Report.

QUINTAIN ESTATES
Despite the council’s claim to the contrary when Quintain Estates criticised the Wembley Masterplan for unaffordability, they remain the council’s main developer partner.

Quintain have themselves been badly affected by the economic situation and their strictures need to be taken seriously in the context of their ability to provide Section 106 funding for the Masterplan proposals.

Quintain has recently negotiated a three-year deal with its lenders to manage its debts of £620,000,000. This involved increasing the firm’s maximum gearing ratio (the ratio of debt to net worth) from 110% to 150%, allowing for expected further falls in the value of its UK properties. This stabilised the firm’s stock, which has fallen 58% this year. However the arrangement provides protection only for a 20% fall in property valuation from September 2008 levels and the decline in property values has accelerated since then. Quintain is likely to seek further investment to help stabilise its finances.

CONCLUSION
The council’s own report, ‘The Local Impact of the Recession’, reinforces objectors’ criticisms of the Wembley Masterplan. The Plan based as it is on expansion of retail, housing, hotel and office space at a time of economic recession and long-term economic uncertainty is irrelevant in its present form. As a long-term Plan it should also take into account the council’s yet to be published Climate Change Strategy.

The Wembley Community Association will be attended the Executive on Monday April 6th to press their case for a realistic and sustainable Masterplan.