Support Shopping centre Traders not Delancey

Dear Friend

We are in the midst of a public health crisis which has impacted severely on people’s lives and livelihoods, forcing shops and businesses across the UK to close. The position for the Elephant shopping centre traders was already serious, with over half having nowhere to go, come the scheduled centre closure in July – now their situation is acute.

A survey conducted by SE1 website forum found that 72% of people wanted the centre to remain open beyond July. In response developer Delancey says that it still intends to go ahead with closure on the 31st July, but pledged that essential food and pharmacy facilities would remain available, if needed.

This is not good enough. All the remaining shopping centre traders need support now if they are to survive.

Southwark Council are due to assume Compulsory Purchase Order powers on behalf of Delancey, at their reconvened Cabinet meeting, this coming Tuesday. With these powers behind them Delancey’s hand in negotiations with remaining leaseholders and stakeholders will be strengthened. Southwark should not be helping Delancey to build a development that puts small traders out of business and does not give us the social housing we desperately need. 

Instead we call on Southwark Council to support the traders. We welcome its recent promise of £200,000 and now call upon them to release this money immediately as cash grants to traders.

We also maintain our demand that the centre is not closed until all the traders have been properly relocated or suitably compensated.

Please share these hash tags;
#supporttradersnotdelancey
#supportelephantnotdelancey

You can also find Up The Elephant on Twitter & Facebook.
You can read more on the 35% Campaign blog.

Regards
Jerry

image

Twitter
Facebook
Website
Copyright © 2020 Elephant Amenity Network, All rights reserved.
Our mailing address is:

Elephant Amenity Network

18 Market Place
Blue Anchor Lane

LondonSouthwark SE16 3UQ

United Kingdom

image

35% Campaign update – Council to remove remaining shopping centre traders using CPO powers

Council to remove remaining shopping centre traders using CPO powers

Mar 23, 2020 12:00 am

Council to approve compulsory purchase of shopping centre traders and buy LCC/shopping centre sites -In an extraordinary move Southwark Council is poised to ‘buy’ both the Elephant and Castle shopping centre and the London College of Communication from current owners, developer Delancey and the University of the Arts London (UAL). It is also excercising Compulsory Purchase Order (CPO) powers over the shopping centre site, on behalf of Delancey’s British Virgin Islands registered offshore subsidiary1.

The CPO powers are needed because Delancey has failed to reach agreement with 11 of the remaining shopping centre traders who have secure tenancies and several other so-called third-party ‘interests’ including land owned by Transport for London and arches owned by Network Rail/Arches company. 2

The additional purchase of the shopping centre and LCC land is part of a legal manoeuvre, vesting ownership in a public body, that will override the rights of residents in surrounding homes whose daylight will be affected by the redevelopment of the two sites. A leasing arrangement will allow both sites to return to Delancey and UAL once the CPO process is complete. 3

Southwark say that both measures will ultimately result in no cost being incurred to itself (except for officer time plus a proportion of any public inquiry costs) with Delancey indemnifying all other costs, but no figures are provided in the three publicly available reports detailing the purchase arrangements and the indemnity agreement has not been made public. Decisions on both measures will be made at a video-call Cabinet meeting tomorrow – Tuesday, 24 March.

Will the scheme ever happen?

The main justification for the proposed measures is to ensure the success of the development. Council officers advise that if they are not adopted Delancey may meet delays and will not secure the ‘enormous funding’ the scheme requires and then the site could lie empty for years.

Despite this concern, officers are nonetheless so personally convinced that the development will ‘likely’ go ahead, that they are not requiring a guarantee from Delancey that it will proceed with the scheme after Southwark has cleared the site with its CPO powers. The CPO report says ‘it is not necessary to impose… an obligation to build the Scheme as the measures negotiated for inclusion in the indemnity agreement give the Council comfort that EC is likely to proceed with the Scheme.’ 4

The contrast between Southwark’s favourable treatment of Delancey, (a property developer rooted in offshore shell companies) and the neglectful manner it has treated traders who have made the Elephant their home is also laid bare. Under CPO legislation Southwark is required ‘to exercise its power…in a manner which, so far as practicable, secures that relevant occupiers of that land are provided with a suitable opportunity to obtain accommodation on the land in question.’ 5

This hasn’t happened; such relocation benefits as there are (eg the £634,700 relocation fund, the £200k New Home Bonus Fund) have been won by the traders and local campaigners and owe little to Southwark Council’s efforts. Even with these gains, 60 traders still have no new premises and those who do will be re-housed off-site, with only some (those in Castle Square) having the smallest possibility of ‘accommodation on the land in question’. Just last week the BBC ran a feature on the plight of the remaining traders.

Southwark has always had the power

By Southwark’s own account the scheme may well not go forward unless it exercises CPO powers, because Delancey is unwilling to bear the risk of the uncertainty created by its absence, given its ‘enormous capital investment in the Scheme’ and in addition ‘any prudent funder of the Scheme is also unlikely to fund the Scheme whilst that uncertainty persists’6

Southwark therefore has had a great deal of legitimate leverage. It was clear when Delancey first submitted its planning application for the shopping centre’s redevelopment back in 2016, that there was little intention of retaining resident traders in the new redevelopment. When Delancey described the traders as ‘benefiting from disproportionately low levels of rent’ and unlikely ‘to survive….over the longer term’7 Southwark should have made it clear then that any anticipated use of CPO powers would be dependent on fulfilling the requirement that ‘relevant occupiers’ ie the traders be given the opportunity to stay in the new development.

As it is, it looks as if Southwark intends to sacrifice trader’s interests, again, in favour of Delancey, just as it sacrificed those who depend on social rented housing, when it granted Delancey planning permission, without securing the minimum amount required by its own policies.

The coronavirus risk

Southwark’s attempts to indemnify itself against any mishaps in its CPO arrangements with Delancey includes, amongst other things, a requirement that there be a ‘reasonable prospect of the development of that area being delivered in a reasonable time frame’ 8.

Any sensible person, or local authority, must now see that this is unlikely, given the coronavirus crisis and it multi-dimensional impact. Southwark should at the very least defer consideration of exercising CPO powers and the purchase of the shopping centre and the LCC sites, on any terms. At the same time, Southwark should use its resources to maintain and improve support for the traders and insist that Delancey do the same, if it wishes to have the benefit of Southwark’s CPO powers at some time in the future.

Footnotes:

  1. According to Southwark, Delancey is not the developer, but rather the advisor to the so-called ‘Triangle Partnership’, which is a partnership between the Dutch pension fund APG; Qatari Diar and Door SLP (a joint venture involving Delancey’s DV4 offshore property fund). There are further partnerships within this Triangle, detailed in the Report: E&C CPO para 12. Southwark refer to the developer as Elephant & Castle Properties Co. Limited (“EC”) registered offshore in the BVI. We continue to refer to the developer by the commonly known name of ‘Delancey’. 
  2. See paras. 80, 59 Report: E&C CPO 
  3. See paras. 1,2 & 12 Report: E&C Property Rights 
  4. See para 76 Report: E&C CPO 
  5. See para 81 Report: E&C CPO 
  6. See para 57 Report: E&C CPO 
  7. See 8.7 Planning Statement 
  8. See para 74 Report: E&C CPO 

Read in browser »
share on Twitter Like Council to remove remaining shopping centre traders using CPO powers on Facebook

Elephant Activism Week

Dear Friend

It’s Elephant Activism Week!

We’re calling on all supporters to join us this week for a bout of activism!

1 Doorstep Delancey!  Developer Delancey will be updating the Southwark Empowering Communities North West Area Forum on the Elephant and Castle shopping centre redevelopment this Thursday.

6:30pm-7:15pm Thursday 12 March, Outside Amigo Hall, St George’s Cathedral, Lambeth Road, SE1 7HY (intersection with St George’s Road).
FB Event here

This is a rare opportunity to DOORSTEP DELANCEY! We are demanding that the shopping centre is not closed, until all the traders are properly relocated (many still have nowhere to go) or suitably compensated.

We will be doing a photo opp and leafleting outside Amigo Hall as people go into the meeting, which starts at 7pm. More details are on the Southwark Council and SE1 Community websites.

2 Love the Elephant Film Night: “Why do Elephants keep developing?” 

Join us at 55East for an evening of solidarity to raise funds for the shopping centre Judicial Review Appeal. Emile Scott Burgoyne’s updated documentary, Why Do Elephants Keep Developing? exposes the dodgy deals and offshore billionaire backers behind the Elephant and Castle regeneration. The film showcases our many local heroes; our protests, parties, celebrations, victories and defeats.

6pm-9pm Friday 13 March, 55East, 53-63 East St SE17 2DJ 
Tickets from Eventbrite here (donations)
FB Event here

3 Share and donate! We have raised a fantastic £2,375 in our new Judicial Review Appeal, in just six days! Please help us push on to our £3,000 target by sharing and donating – any amount big or small!

Regards
Jerry

image

Twitter
Facebook
Website
Copyright © 2020 Elephant Amenity Network, All rights reserved

35% Campaign – Elephant Park – planning committee misled?

Elephant Park – planning committee misled?

Mar 01, 2020 12:00 am

Lendlease fails to declare public funding for affordable housing -Developer Lendlease failed to disclose at Last week’s planning committee meeting that it was in receipt of public funding, which could have increased the amount of affordable housing at Elephant Park (aka the Heygate estate regeneration).

The meeting was called because of the large number of objections to the final phase (H7 MP5) and the lack of additional affordable housing. We explained in our previous blog how Lendlease have met their 25% affordable housing requirement, while increasing the total number of homes, but without increasing the number of affordable homes or proportion of social rent (3%).

One of the objections, from the 35% Campaign, was that “There appears to have been no effort to take advantage of any public funding”. Southwark responded by saying: “There is no obligation on Lendlease to seek public funds.” (para 282, 283 of the officer’s report)

The planning committee followed this up in their cross examination of Lendlease, who were asked directly by Cllr King whether they had considered applying for grant funding:

 See video clip of committee meeting on youtube here.

In a lengthy reply, Lendlease did not disclose that the Mayor had in fact committed to fund Elephant Park, back in September 2018.

Elephant Park is the very first entry on a list of estate regeneration projects on the Mayor’s website, which have had funding approved since July 2018.

This gives rise to a number of questions:

  1. Why did Lendlease not say that they had received funding when the question was asked?
  2. Why were the committee members not told that Lendlease has received funding in the committee report?
  3. How much money has Lendlease received from the Mayor?
  4. Why has the affordable housing offer not been improved?

We suspect that the answer to this lies in the murky world of viability; Lendlease insisted in 2013 that only 9.4% of the new homes could be viably provided as affordable.

They repeated this at the planning committee meeting last week and would no doubt argue that any money they have received from the Mayor has gone to bridging the gap between what is viable and the 25% being delivered.

Whatever the merits of this argument (and we think it has none) it still leaves open the question of why Lendlease and the officers report did not disclose the grant funding to members.

There is a similarity here to the ongoing dispute about affordable housing in the shopping centre development. Developer Delancey claims that the £11.24m it is also receiving from the Mayor is being used to increase the amount of social rented housing. We showed previously how it was going to Delancey’s bottom line:

Read in browser »
share on Twitter Like Elephant Park - planning committee misled? on Facebook

35% Campaign update – Elephant Park – final phase, final windfall for Lendlease

Elephant Park – final phase, final windfall for Lendlease

Feb 21, 2020 12:00 am

Last phase of Heygate regeneration set for approval with increase in number of homes but no increase in affordable. -We blogged last year about the final phase (MP5 H7) of the Heygate regeneration.

Lendlease’s application for 424 new homes (15 social rent) in this final phase is now set to be approved by the Council’s planning committee on Monday.

If approved without a viability review it will seal an increase in the number of new homes beyond that approved by Southwark’s planning committee back in 2013, without any increase in the number of affordable homes. This will result in a total of 2,689 homes (220 more than approved in 2013) of which 92 will be social rent.

 Extract from the 2013 Outline application Committee report

This windfall gives Lendlease the revenue of 220 extra homes that were not included in the original viability assessment of the scheme, which was based on 2,469 units. This allowed Lendlease to build 25% instead of 35% affordable housing and to reduce the required amount of social rented homes to next to nothing. Taking account of the 220 extra homes could have improved both the viability of the whole scheme and the affordable housing offer.

Reviewing viability

We noted in our previous blog that Southwark has neglected to carry out any viability review. Monday’s planning committee report reiterates this, stating: “The council has no mechanism to insist on a viability review” (para 129)

However, this looks to be contradicted by the terms of the Regeneration Agreement between Southwark and Lendlease, which provides a mechanism for the affordable housing mix to be reviewed on an annual basis.

If these annual reviews had been taking place it should have been reflected in higher levels of social rented housing. The fact that the tenure mix hasn’t changed suggests that they haven’t.

Grant Funding

We also noted in our previous blogpost that the 2013 planning committee anticipated that the regeneration could benefit from public funding if it became available.

 Extract from the 2013 Outline application Committee report

This was in line with the Regeneration Agreement, which also obliged the parties to seek grant funding:

Such funding has been available since 2016 when Sadiq Khan announced a £4.6bn funding programme, but despite the 2013 planning committee’s intention and the Regeneration Agreement’s obligation, Lendlease has made no funding application.

Also, despite this clear contractual obligation, Southwark nonetheless states in Monday’s committee report for the final phase“There is no obligation on Lendlease to seek public funds.” (para 283)

Given the clear obligation on Lendlease to seek grant funding, we say that until Lendlease does so Southwark should reject this final phase application.

Southwark should also reject the application unless Lendlease commits to a viability review. There are a number of reasons why this is necessary. Not only was the original viability assessment based on fewer homes than the number actually being built, but also the free-market homes are being sold for twice Lendlease’s viability assessment estimate.

Another significant change to viability since the original assessment has been Lendlease’s recent decision to let, rather than sell homes in the later phases of the scheme.

Monday’s planning committee should also take account of Policy 3.12 of the Mayor’s London Plan, which says that “The maximum reasonable amount of affordable housing should be sought .. having regard to .. individual circumstances including development viability, {and} the availability of public subsidy.

The Elephant Park development lost Southwark 1,200 council homes. This final phase is Southwark Council’s last chance to (partially) redeem itself by insisting Lendlease abides by its obligations, reviews the viability of the scheme and applies for grant funding.

Read in browser »
share on Twitter Like Elephant Park - final phase, final windfall for Lendlease on Facebook

35% Campaign update – The Biscuit Factory is back

The Biscuit Factory is back

Feb 17, 2020 12:00 am

Sadiq gives the Duke of Westminster a second chance -We blogged back in 2018 about the redevelopment of the former Peek Freans biscuit factory and adjoining Bermondsey college campus site.

Grosvenor Estate, headed by Hugh Grosvenor the 7th Duke of Westminster, London’s largest landowner and the world’s richest man under 30 (worth over £10bn), proposed 1,343 new homes, none of which were to be social rent. The site is next door to two Bermondsey wards with some of the most deprived neighbourhoods in the country and the complete lack of any social housing was too much for both local councillors and Southwark’s planning committee, who early last year rejected the scheme.

However, Mayor Sadiq Khan overrode Southwark’s decision by ‘calling it in’, citing Southwark’s failure to meet its affordable housing targets, and is now set to approve the scheme, after a public hearing at City Hall on the 21st February.

Still no proper social rent

The original scheme has been amended, with an overall increase in the number of homes, by 206 units, including 160 affordable, up to 1,548 units in total. But because the scheme remains Build to Rent (BtR), with none of the homes for sale, there will still be no proper social rented housing. Instead 140 of the 160 affordable units will be ‘social rent equivalent’ (SRE) – a pseudo-social rent on 3-year tenancies, with just a ‘presumption’ of renewal, not the lifetime assured or secure tenancies of proper social rented housing.

Even were we to accept SRE as social rent, the 140 SRE units still amount to less than 10% of the 1,548 total number of homes.

The SRE rents will be Target Rents, which are higher than most Southwark council rents (eg one bed would be £134pw, compared to council rent of £107pw). The SRE service charges are unquantified, with only the assurance that they will be ‘controlled’ (para 249).

Most of the affordable housing, though, is made up of Discounted Market Rent (DMR) – 343 units to be let at much higher rents than SRE, eg £354pw for a one-bed. It is not clear if these rents include service charge, There will be no units let at London Living Rent, the Mayor’s preferred rent level, which would have much reduced the DMR rents (para 250).

(Another) non-viable development.

At the bottom of the poor affordable housing offer is Grosvenor’s rehearsal of the well-worn developer claim that this is a non-viable development. A non-viable development is one where the developer’s own profit target is not met, not one where it makes no money. In this case Grosvenor’s profit target is 12% IRR, and they say they can make barely half that (6.53%) and the affordable housing offer is the best that they can do. GLA and Southwark agrees, but any confidence we can have in these judgements is undermined by huge disparity in the estimates of profits; Grosvenor estimated they would make a £189m loss on the original 2017 planning application, while Southwark said they would make £101m profit. Now Grosvenor claims a profit of £13m on the amended scheme. We don’t know the GLA’s profit estimate, because it hasn’t published its own appraisal, despite the Mayor’s commitment to transparency.

Early and late stage reviews of the scheme are offered and should there be any increase in profitability, extra social rent equivalent or London Living Rent homes will be provided, but only by reducing the DMR rents, not by converting market-rent units, so there will be no increase in the number of affordable units.

Mayor misses 50% affordable housing opportunity

In October 2018 Southwark’s regeneration boss, Cllr Johnson Situ, commented on the original application: “With over 10,000 people on our housing waiting list it is very disappointing to see such a little amount of social or genuinely affordable housing in this application. As it stands, we are still a long way from agreeing a scheme that meets the council’s policies.”

Southwark has followed this up by making a representation on the amended scheme to GLA, reiterating some of the objections that led to the original scheme’s rejection, but Southwark has not argued for the amount of real social rented housing that its own policy requires – 35% of the total amount of housing, 70% of which social rented housing – 30% intermediate. This would give us around 380 social rented homes and 162 DMR homes.

Indeed, it is arguable that the affordable housing requirement should be nearer 50%, given that nearly three-quarters of the Biscuit Factory site is former industrial land. The GLA report recommending approval of the scheme skips lightly over the fact that such land should deliver 50% affordable housing, in line with the Mayor’s ‘strategic’ target (Policy H4, pg 188), by saying ‘the site currently comprises a privately-owned commercial complex, the previous industrial use having ceased over 30 years ago’ (para 232) and so is subject to a 35% requirement instead.

While Southwark has been reduced to a bystander in the decision making, GLA has indulged in a pick n mix of the bewildering number of affordable housing policies (paras 220-236) and decided that only 140 pseudo-social rent homes need to be built, with 342 DMR at much higher rents – an exact reversal of the proportions of social to intermediate housing, required by Southwark’s policy.

In sum, a Labour Mayor has called in a development that a Labour council has rightly refused because it has no social rented housing, ignored that council’s own affordable housing policies, and applied his own, weaker policies, all to help a developer build something without any proper social rented housing.

Keeping Build to Rent rented

Many of the other BtR provisions are familiar from the proposed BtR development of the Elephant and Castle Shopping Centre. As at the Elephant a legal covenant is needed to ensure that the BtR development remains for rent, not for sale. The covenant for the Biscuit Factory is only for 20 years though, whereas Southwark required thirty years from developer Delancey for the shopping centre; in any event the covenant does not entirely stop a developer selling on, if they are prepared to pay a penalty, known as ‘claw-back’.

Poor doors

Besides being BtR, there is much else not to like about the development. One of Sadiq Khan’s manifesto pledges was that he would ban poor door’s in London’s housing developments. He has held true on this pledge to the extent that separate entrances for private and affordable tenants are indeed a thing of the past and instead we now see entirely separate buildings (see Heygate, Aylesbury and most major schemes approved in last 5 years.)

Grosvenor are following this trend‘consolidating’ most of the Biscuit Factory’s affordable housing into separate blocks.

 Extract from Grosvenor’s Affordable Housing Statement

Renewable energy

Despite both the Mayor and Southwark Council having formally declared a ‘climate emergency’, Grosvenor’s scheme fails to comply with the either the Mayor’s or Southwark’s minimum 20% requirement for on-site renewable energy supply.

Policy 5.7 (para 5.42) of the Mayor’s new London Plan requires that ” all major development proposals will seek to reduce carbon dioxide emissions by at least 20 per cent through the use of on-site renewable energy generation” via the use of “renewable energy technologies such as: biomass heating; cooling and electricity; renewable energy from waste; photovoltaics; solar water heating; wind and heat pumps”.

Southwark’s sustainability policies also require this minimum 20% on-site renewable energy generation (see policy 13 of the Core Strategy) and Policy 3.5 of its Sustainability SPD:

Grosvenor’s Energy Assessment proposes just 0.7% renewable energy generation (see para 7.6) using a handful of solar panels and some air conditioning units in the commercial units that can also provide heat.

Grosvenor also falls short of the London Plan’s zero-carbon requirement, opting to make a £1.137m payment in-lieu instead (para 470).

More Build to Rent, less Social Rent

The proposed Biscuit Factory development demonstrates why we do not have enough homes that people can actually afford to live in. It could deliver nearly 50% affordable housing, around 700 units of which nearly 500 would be social rented, if the Mayor abides by Southwark’s adopted policy and the site is treated as former industrial land. Even reduced to 35% affordable housing, applying Southwark’s policy would get around 380 social rented units. Instead it is only delivering 140 pseudo-social rent, plus 20 Discounted Market Rent.

The Biscuit Factory also demonstrates the threat of BtR developments for social rented housing. Build to rent schemes do not provide social rented housing, only a pseudo-social housing and very little of it. The more Build to Rent schemes we have in London the less social rented housing there will be.

The Mayor cited Southwark’s failure to meet housing targets as reason to call-in the application. This is justifiable, but his concern is headline figures, not meeting the priorities of local housing need, which in Southwark is for proper social rented housing (pg 67).

The Mayor’s pre-election manifesto promise was to build ‘genuine affordable housing’, including social rented housing, and he pledged to ‘support councils to…maximise the affordable housing’. The Mayor has also made much of his 50% affordable housing target. If Grosvenor’s proposals for the Biscuit Factor gets the go-ahead he will have failed to live up to all these promises, approved a scheme that has less than 10% genuinely affordable housing (if we were to accept ‘social rent equivalent’ as real social rent) and thwarted Southwark’s attempts to get anything better.

Read in browser »
share on Twitter Like The Biscuit Factory is back on Facebook

A success for shopping centre traders!

Dear Friend

The shopping centre traders’ deputation and protest at Southwark Council’s Assembly on Tuesday was a great success.

Prior to the Assembly, Southwark Council agreed to contribute £200,000 towards traders’ relocation costs. The money will be in addition to the relocation fund of £634,700, paid by Delancey. Southwark also promised a further announcement on the issue. Details of how the £200k wiil be administered are also awaited.

There can be no doubt this was a response to the campaign and the traders determination to get a fair deal.

The deputation’s 6 representatives (from the main centre, market stalls, arches, plus Latin Elephant and Southwark Law Centre) were well received by the Assembly. It presented their seven demands and took questions from the councillors.

A vibrant protest heard speeches from Paul Heron, of the Public Law Interest Unit and Patria Roman of Latin Elephant, amongst others.

A key demand is for more money from Delancey and no centre closure until all the traders are relocated or suitably compensated – sign the petition here!

We will be meeting very soon to see how we take the campaign forward …hope to see you then!

You can read more here and here

Regards
Jerry
Copyright © 2020 Elephant Amenity Network, All rights reserved.