Council's Bridge Park deal with developers indicates little affordable housing & no transparency

The site including Unisys, Bridge Park, Technology House and car breakers

Last week the Planning Committee discussed how to increase the amount of affordable housing provided by developers to meet the 50% affordable target and to make the issue of Viability Assessments mores transparent LINK.

Tomorrow the Cabinet will discuss a report LINK on the Unisys-Bridge Park-Technology House development which admits that the amount of affordable housing will be much lower than 50% and where an Appendix with a 'sliding scale' of affordable house is 'restricted' and not available to the public.  The scheme consists of c500 homes, hotel and leisure centre.

The scheme is rather similar to the Willesden Library development where the Council gets a piece of infrastructure in exchange for providing land. As readers will know the Willesden Green flats contain no affordable units and were sold to overseas investors by Singapore agents. In exchange we got a small 'Cultural Centre' which by coincidence is due to open tomorrow. The community lost a good local bookshop, a cinema and an open space.

At Bridge Park a new leisure centre will be built with a much needed swimming pool, but other features of the current centre will not be provided.

Among the lost facilities will be the function hall, small business units, nursery and meeting rooms for faith groups.  PLIAS Resettlement , a community based not for profit organisation that provides services primary targeting offenders and ex-offenders to enable them to integrate them back into society, will lose its base.  They join Stonebridge Adventure Playground and the Welsh School that lost their premises through the redevelopment just up the road. The report admits that despite a pledge to Cabinet in June 2013 to help the nursery find new premises, that has not been done.

The report's Equalities Assessment claims that a positive aspect is:

With a high young population, the provision of new housing in the local area which the population could take advantage of is a positive in that it provides the opportunity for young people to move out of their family home bit also provides the opportunity to stay in the local community.

Even the officers seem to recognise that this might be seen as disingenuous:

However, it is not known if new housing would be affordable, especially given that Stonebridge ranks as the lowest ward in terms of median household incomes.

Of course it won't be affordable, which is presumably what your secret Appendix says!

Another aspect that might set the noses of ex-Tax Inspectors Dan Filson and Philip Grant twitching, are the developer and finance details.

The ex-Unisys site is owned by Harborough Invest INC (Harborough) to whom General Mediterranean Holdings SA (GMH) are a parent company).  The Council will sell part of its own site (Technology House) to Harborough/GMH.

In June 2013 the Cabinet agreed to pursue this option with a different subsidiary company of GMH: 'Tucan, a special purpose vehicle proposed for the purposes of this development'.  GMH now say that Tucan Investments is no longer in the picture and the Council state 'GMH have explained that it would be sensible for the landowner to be party in the agreement rather than a new development vehicle.'

The main report Financial Status Checks (4.6) states

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.

Another aspects is of course ensuring that the Council (or rather we residents) are getting value for money. The reports says (3.6):

Since the June 2013 Executive, negotiations with GMH have been ongoing through their agent Nick Shattock Real Estate (NSRE) (now Chainwork Capital) [another change of name] to ensure that the Council receives best value for its lands. As a result the Heads of Terms have changed and it is proposed that the Strategic Director of Regeneration and Growth concludes negotiations and enters into Heads of Terms with GMH and Harborough Invest Inc in substantially the form set out in Appendix 3 of this report [which is restricted].

The Council employed Deloitte LLP in June 2014 to see if the disposal of their land to GMH represented 'best consideration' - Deloitte concluded it did not. the report goes on (4.4)

Deloitte LLP re-engaged with GMH, via their agent NSRE to seek in principal agreement to the various development costs, revenues and timescales. This exercise resulted in the Council receiving a revised offer from GMH as at September 2014. as a result of the discussions between DRE and NSRE, Deloitte LLP conclusion was that whilst they did not necessarily agree with all of the points raised in the NSRE offer letter, the Revised GMH offer for the Land at Bridge Park was above that of Deloittee revised opinion of value (Appendix 4) [yes, restricted of course].

The report goes on (5.6)

Through pursuing a deal with GMH the Council is not releasing the option of disposing of the Council land to the market and not giving other organisations the chance to bid for the opportunity if this had been available  on the open market. The land price has been robustly tested in order to align with best market price and external consultants to Brent have undertaken detailed development appraisal, valuation and sensitivity resting work confirming the GMH & Harborough proposal to represent best value.

The consultant's report has not been published.

Persuaded?

Labour campaigns on housing at scene of their 'No Common People' development crime

It seems rather inappropriate for Brent Labour Party to set up a stall this Saturday coming outside Sainsbury's in Willeasden Green to campaign over housing. They will be accompanied by Claude Moraes MEP and other candidates for the European elections.

Claude and his friends would do well to pop along the road to the building site which used to be the Willesden Green Library. Brent  Labour Council gave away the land to developers who are building luxury flats in exchange for a small cultural centre.

The agents marketing the flats in Singapore boasted in their advertising (in case foreign buyers should be tainted by the poor) that none of the flats were affordable housing or for key workers. LINK

Crumbs for Londoners - Darren Johnson on the Mayor's housing policy

The Mayor expects 80% of new housing to be in these 33 regeneration areas

 Darren Johnson, the Green Assembly Member,  has published a thoroughly researched report on the London Mayor's approach to the housing crisis and the construction of  luxury blocks, such as those at Willesden Green Library, which Boris Johnson  supports as part of the solution.  The full report is available HERE

The Willesden Green apartments are being advertised in Singapore with the selling point that they have no affordable housing or key workers on site. Yesterday it was revealed that flats in Stratford are being adverised in a similar way.

Darren Johnson writes:

It is much easier for the big developers behind these projects to get the finance from banks if they can sell lots of housing off-plan (before it is built). Investor landlords are quite happy to buy off-plan and have little difficulty in securing the cash or mortgage.By putting the money in up front they have, in the Mayor’s words,“helped bring forward housing development”. The Mayor estimates that one third of all buyers of new homes are from overseas, and that two thirds of all new homes are sold to investors

.

Whether it is a Londoner looking for a buy-to-let investment,a pension fund investing in new private rented housing,or an overseas investor exploiting the exchange rates, the Mayor is a champion of anything that gets housing built.

After looking at a series of case studies and examination of the evidence Johnson concludes:

National government policy has put local councillors, planning officers and residents in a difficult spot. They are constrained by a free market dogma that says we just need developers to build more homes, and that ignores the potential for other approaches.


The law of supply and demand works with things we consume. If the price of TVs is high, produce more TVs to meet demand and prices will fall. But private developers are very unlikely to meet the demand for housing. If the supply of TVs doesn’t increase and prices stay high then demand should fall off.


But when house prices rise people see an opportunity to make money so demand can keep rising, especially if investors from around the world join the feast.


The Government is encouraging buy-to-let mortgages with tax breaks; helping people take out unaffordable mortgages with Help to Buy; encouraging overseas investors to buy new homes off plan.


The Mayor supports these policies because he says they increase supply, but of course they are also increasing demand.In fact, they are probably more successful at increasing demand than they are at increasing supply, so they are actually making the problem worse.


Councils and residents can’t do very much about this.


But the Mayor of London is in a unique position to advocate bold changes to housing policy. He has recently argued that stamp duty revenue in London should be devolved to City Hall, giving him a large budget for affordable housing.


He could go further and call for a housing policy that:


1. constrains demand by putting controls or extra taxes on overseas investors and second home owners, or by putting a tax on all land values to dampen speculation and stop developers sitting on large, unused land banks
2. gives councils, housing associations and co-operatives the money and powers to build affordable homes that stay affordable forever whatever the market is doing, instead of expecting the private market to build them
3. puts ordinary people in a better position to weather the crisis while it is tackled, for example with continental-style stabilising rent controls and protections for private tenants, ideas backed by the majority of the Assembly in its own reviews of housing and its majority support for the Let Down campaign

Comments can be sent to: darren.johnson@london.gov.uk or the researcher tom.chance@london.gov.uk