35% Campaign update – The Elephant traders who face the end without new homes

Latest blog update on regeneration in Southwark
The Elephant traders who face the end without new homes
Sep 22, 2020 12:00 am

Only 40 traders ‘found new premises’ as centre closure looms -Shopping centre developer Delancey and Southwark Council have mounted a desperate defence of their failed trader’ relocation strategy, with a joint statement claiming that all qualifying businesses have been relocated or offered relocation options ‘without question’. The centre is due to close on Thursday.
The very same joint statement reveals, however, that only 40 traders have actually been found new premises through the relocation process, a fraction of the approximately 130 independent businesses identified in January 2018 by Southwark, as operating at the Elephant 1. Much of the rest of the joint statement is a lengthy account of how this much larger figure has been was reduced to just forty traders through the relocation process. The statement also outlines ‘options’ available to the unfortunate traders who have nowhere to go and makes self-justifying excuses for this miserable outcome.

The joint statement also attacks what it calls ‘uncorroborated statistics’, which show that at least 40 traders will have nowhere to go when the centre closes, and online ‘misinformation’. This is clearly aimed at the Up the Elephant campaign, including the 35% Campaign and, in particular, Latin Elephant, who have worked tirelessly to support the traders.
Latin Elephant has issued its own rebuttal, noting that Delancey and Southwark have now themselves admitted in the joint statement that only 40 traders have been found new premises, ‘leaving about 40 traders who have been trading at least since January 2019 (as per the s106 agreement) without alternative premises’. Latin Elephant’s rebuttal also includes links to all the supporting research evidence on the fate of traders, through the regeneration process. This research names the independent businesses, maps their location and gives relevant dates.
Who gets to be eligible?
As Latin Elephant explains, while 130 independent businesses were recognised by Southwark as operating within the red-line of the development in January 2018 (the date of the first hearing for the shopping centre planning application), Delancey and Southwark take only 79 ‘eligible’ businesses as the base-line in their account of the relocation process, excluding many long-standing businesses. Delancey and Southwark then whittle the 79 ‘eligible’ businesses down to forty businesses, in successive stages– 64 applications received, 61 valid, 40 found new premises. (Southwark has acknowledged on its website that there are 33 eligible traders remaining without a relocation offer, but that is not mentioned in the joint statement).
The ‘options’ for those not awarded premises are to search for somewhere else themselves, through a commercial premises database. If they do not find anywhere, they will receive payments of around £8000. The inadequacy of these ‘options’ hardly needs stating. The database has been a constant source of frustration to traders, who have criticised it for being out of date and listing premises that are simply too expensive and too far away. An £8000 payment is also very little compensation for the loss of a livelihood, built up over many years and a long way short of what is needed to re-establish a business; one of our previous blogposts has the stories of traders of up to 20 years standing who are in this situation.

No commitments
Delancey and Southwark’s joint statement also takes pains to say that there was never a commitment to relocate all the traders. This is shamefully true – it is to Southwark’s great discredit that it ignored evidence from Latin Elephant that this situation was bound to arise, because there was only half the space required for a proper trader relocation in Delancey’s redevelopment plans, but Southwark went ahead and approved the plans nonetheless. Notwithstanding the lack of a formal commitment, Southwark still created the impression that all traders would be accommodated; when asked directly by councillors at the planning meeting for Castle Sq, one of the relocation sites, whether ‘given all of the different site…does that cover…enough sites for all of the current number of traders…..How many short would we be roughly?’ council officers replied ‘…across the piste there should be sufficient’. By their own testimonies traders also confirm that they have been strung along with false hopes of relocation space throughout the relocation process.
Stall-holders do it for themselves
Faced with the loss of their businesses the market stallholders who occupy the ‘moat’ that surrounds the shopping centre have banded together to draft a Proposal for more market stalls at the Elephant, after the centre’s closure. The Proposal was received by Florence Eshalomi, London Assembly member for Lambeth and Southwark, who met the traders at City Hall, gave strong support and undertook to take up the matter with Mayor Sadiq Khan. Local councillor Cllr Maria Linforth-Hall also met the traders and is giving her support, as are Assembly members Caroline Pidgeon and Sian Berry, Assembly Member and the Green Party candidate for Mayor.

The Camberwell and Peckham Labour Party Constituency Party also passed a motion in support of the traders’ Proposal at their meeting last week.
…while UAL looks after itself
Sadly, the University of the Arts London (UAL) has not felt able to help the traders, nearly all of whom come from black and ethnic minority backgrounds and despite its professed commitment to Black Lives Matter. In letters received by Southwark Law Centre UAL declines to either withdraw from the shopping centre redevelopment which will supply it with a new campus for the London College of Communication on the very spot traders now occupy, nor to offer support for the traders’ Proposals for additional market stalls. UAL is instead happy to take Southwark and Delancey’s assurances that all traders are being properly treated at face value.
Division and attrition
Southwark and Delancey’s treatment of the people who actually work at the Elephant now can be summed up as ‘division and attrition’. The relocation strategy and traders’ participation in decisions on their future were only put in place after Delancey had gained planning committee approval for their scheme. Latin Elephant’s advocacy on behalf of all the BAME traders was also resisted. The s106 legal agreement (negotiated between Southwark, Delancey and UAL), which determines who was ‘eligible’ and who was ineligible for relocation support uses formal criteria around leases and licences that do not reflect the way the community has developed over the years. Alongside this, the decline in footfall and in the physical fabric of the centre led to a decline in trade that unsurprisingly meant that traders left before the centre’s closure, wearied beyond hope by the whole ‘regeneration’ process.
For Southwark and Delancey this is all part of the natural process of regeneration and relocating just 40 out of 130 traders is a triumph to be proud of. For the traders and the campaigners who support them it is deplorable outcome which exposes the hollow promise that the Elephant and Castle regeneration is providing a ‘fairer future’ for the local community.
 Southwark Council’s Planning Framework for E&C regeneration.
Going, but not forgotten…
You can see a short valedictory film, by Emile Scott Burgoyne, celebrating the Elephant community here.
See joint statement, heading ‘Who is being relocated?’, first bullet point. 

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Recent Articles:
Shopping Centre traders propose new stalls for the Elephant
Southwark responds to shopping centre campaigners
The shopping centre traders expelled by regeneration
Campaigners demand that UAL withdraws from shopping centre development.
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35% Campaign update – Shopping Centre traders propose new stalls for the Elephant

Sep 14, 2020 12:00 am

Traders appeal to Mayor Sadiq Khan for his support -Traders who will be losing their market stalls when the Elephant and Castle shopping closes have come up with their own proposal for new stalls at the Elephant. Around forty traders face the loss of their businesses and livelihoods when the Centre closes its doors for the last time on 24 September.The traders’ proposals are for new stalls to be sited around the Faraday Memorial, by the railway arches along Archer St and outside the new Elephant Arcade, at the bottom of Perronet House.Traders are proposing at least 45 new stalls. Most of the new stalls would be around the large silver Faraday Memorial in the middle of the Elephant roundabout. This will become an even more important commuter route between the train station and the tube stations, with the closure of the shopping centre. The proposal would keep established traders at the heart of the Elephant and maintain the ‘sense of place’ that they have created. The proposal builds upon a previous Transport for London (TfL) project, from 2014, but never delivered.The proposal has been sent to the Mayor of London for his support. The land around the Faraday memorial is owned by TfL, which the Mayor leads.Local London Assembly member Florence Eshalomi MP has submitted a formal question to the Mayor asking him if he will support the proposals.Traders are also looking for support from local councillors from all parties and representatives at the London Assembly.Traders believe that with wholehearted support from the Mayor, Southwark Council, councillors and London Assembly members, all the displaced traders from the shopping centre can be found new homes. Only 45 out of 97 traders had secured relocation space, up to the end of April 2020.The proposal was devised by Alice Chilangwa Farmer and is supported by the Up the Elephant Campaign, Latin Elephant and Southwark Law Centre. If adopted it would provide shopping options and continuity to a local community facing a prolonged period of disruption and construction work.The complete proposal can be found here.This is what the traders and supporters have to say;Trader Shapoor Amini says: ‘ I’ve worked at this market since 2001. These people promised us so many things, they said we’ll give you a space, we’ll look after you guys, but they’ve done nothing for us. …I applied so many times—I’ve made calls, been to the council, been to the office, done lots of paperwork […] been to countless meetings, and still nothing. My whole life has been spent in this market, in this area, and now I don’t know what to do…..I have a kids, a wife it is very difficult’.Trader Edmund Attoh says: ‘I’m working here over 20 years. Things are very difficult people who have been here for a long time didn’t get nothing. That’s what we don’t understand, that’s why we are frustrated. We don’t know where we are going now. I applied for a space, and anything they asked, we give to them. They turned us down. But they didn’t say [why].’Traders Mathew and Eden Onuba say: ‘We’ve been 5 years at Elephant and Castle. We don’t know what to do in September, it is a very difficult situation. I don’t want much, but to save the business we’ve built up together.’
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35% Campaign update – Southwark responds to shopping centre campaigners

Southwark responds to shopping centre campaigners

Aug 31, 2020 12:00 am

Council put on defensive by fierce criticism -Southwark Council has posted a lengthy statement in defence of its treatment of the shopping centre traders, as around 40 face the loss of their livelihood when the centre closes on 24 September, according to research by local charity Latin Elephant.

The updated statement tries to answer the fierce criticism of Southwark and developer Delancey from the traders and their supporters, as voiced on the BBC Radio London’s Drive time with Eddie Nestor programme and detailed in Latin Elephant’s twitter feed.

Southwark’s statement says that 45 traders have been relocated, with 33 ‘remaining’. Thirty-one of the ‘remaining’ unallocated traders, with nowhere to go, have received £3000 each from the Business Transition Grant. They will receive a second payment of an unspecified amount ‘near the closure of the shopping centre’ ; given the number of traders and the total size of the Business Transition Grant fund (£200k) this is likely to be about another £3000. Southwark also say that unallocated traders ‘are able to claim from the relocation fund’ – a consolation, no doubt, but of limited use to them if they have nowhere to relocate to.

Other than this the statement details various generic ‘business support’ measures, such as access to websites and databases and advice from ‘independent business and relocation advisor’ Tree Shepherd (remote access only).

The inadequacy of these ‘business support’ measures barely needs stating; if they were of any use nearly half of the remaining traders would not be without new premises. Our webpage E&C Traders with nowhere to go has the testimonies of six unallocated traders, who have been at the centre for between eight and 20 years each (a total of nearly a hundred years between them). They are all experienced traders who would otherwise be continuing in their trade, but for the regeneration. They deserve something more than ineffectual promises of help, with a derisory £6000 to see them on their way, come 24 September.

The Relocation Fund

While Southwark says ‘the Relocation Fund (£647,835) has been available for eligible traders …from February 2020 traders have not in fact been getting the money they need because Southwark, Delancey and Tree Shepherd have shown no urgency in resolving issues around the costs of fit-outs and lease and rent arrangements. Southwark says these are being ‘currently’ resolved, when there is less than a month to go before closure. There is also no on-the-ground practical help, of the kind Tree Shepherd should be providing. This can be excused to an extent by the Covid crisis, but that does not help the traders.

Each relocation payment will be based on the size of the new premise, but averages out at £14,396 per trader – less than a tenth of Tree Shepherd’s fee of £192,900 for administering the whole exercise 1. The payments are only designed to meet actual relocation costs – they do not include any compensation for loss of business, premises, disturbance etc.

The total amount in the Relocation Fund is derisory in comparison to the Delancey’s anticipated profit of £148.42. Southwark attempts to address this, saying ‘Delancey have long agreed to supplement the relocation fund on a case by case basis’. This turns out to be Delancey’s hardship fund, awarded entirely at Delancey’s discretion and only after traders have first considered raising loans from family, friends or elsewhere. An alternative method would be to simply assess the actual costs of relocating and paying anything above the paltry amount currently on offer. Delancey has also helpfully advised that traders could become Uber drivers.

Southwark’s statement – the highlights

Several other parts of Southwark’s statement stand out, one for being particularly inane;

‘For many smaller traders this is an opportunity to grow and develop their business.’

There has never been true at any point since the redevelopment of the shopping centre was first proposed three years ago and it certainly isn’t true now.

Southwark also claim that ‘The council is committed to enabling the largest possible number of existing businesses to remain in the area’ .

If Southwark was genuinely committed to keeping the largest number of businesses in the area it would not have approved a planning application that did not guarantee this. Southwark’s planning department was happy to recommend, in 2017, a scheme that did not then have one of the main relocation sites (Castle Square). It continued to recommend a scheme without a fully realised relocation strategy, which the planning committee duly approved. Delancey designed the redevelopment to exclude current independent traders and Southwark went along with them 3.

Southwark’s statement further says, ‘Unfortunately there were always going to be traders that were not able to be offered a unit in the relocation spaces listed owing to space restrictions.’

This is not what Southwark said back in December 2018, when the question was raised at the planning meeting for the temporary relocation facility at Castle Square. When asked directly by councillors ‘given all of the different site…does that cover…enough sites for all of the current number of traders…..How many short would we be roughly?’ council officers replied ‘…across the piste there should be sufficient’.

Southwark ignored the true state of affairs, revealed by Latin Elephant’s planning objection in July 2018, which said ‘Only 2,050sqm of affordable retail space would be available for immediate relocation, and 4,005sqm is needed’ and approved the scheme anyway 4. Southwark was also well aware that ‘Market stall operators may experience temporary or permanent closure or disruption to business operations, financial or other barriers to re-opening at the new development or in the wider area’ , but this did not lead them to seek improvements in the scheme or to insist on a fully realised relocation strategy, agreed with traders, before giving planning approval 5.

Gone – but not forgotten

While Southwark has been forced to turn its attention to the remaining traders, it would be easy to forget the traders, services and leisure amenities that have already been lost to the regeneration. Latin Elephant/petit Elephant research shows that there were around 130 traders in January 2018; now we have about ninety left, with only about half reallocated. Forty or so more have already gone, and have fallen out of Southwark’s reckoning, forced to leave, as footfall and business declined, wearied beyond hope by the whole ‘regeneration’ process.

Amongst these are the London Palace bingo hall, one of Britain’s largest, with its large customer base in the BAME community; the Palace Superbowl bowling alley, much loved by local students; the Coronet live music night-club, an entertainment venue since 1872; the Charlie Chaplin pub, the many small office businesses in Hannibal House, just above the centre, which also housed a college, charities and voluntary organisations and the United Voices of the World trade union. In Southwark’s happy reality they no longer exist and so their loss does not count.

The true story about the shopping centre redevelopment is the same as it was for the Heygate estate regeneration – Southwark Council has thrown its lot in with the developers, Lendlease and Delancey, and what happens to the people who actually live and work at the Elephant has been an afterthought.

Footnotes:

  1. Elephant and Castle Shopping Centre s106 Agreement pg 113 
  2. Elephant and Castle Shopping Centre s106 Agreement Appendix 10 pg 266 
  3. Delancey’s view of the independent traders was made clear in their Planning Statement, which says ‘…some existing retailers in the area are benefitting from disproportionately low levels of rent for such a central London location and it may not be financially viable for them to survive in the wider area over the longer term’ para 8.7. 
  4. Officer’s Report Elephant and Castel Shopping Centre 3 July 2018 para 851 
  5. Officer’s Report Elephant and Castel Shopping Centre 3 July 2018 para 169 

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35% Campaign update – The shopping centre traders expelled by regeneration

The shopping centre traders expelled by regeneration

Aug 24, 2020 12:00 am

University of the Arts ignores traders’ plight -In our last blog post we detailed how Up the Elephant and other campaigners had written to the University of the Arts, London (UAL), informing them that at least 28 traders had not been relocated new premises, as they face the closure of their businesses, to make way for the demolition and redevelopment of the shopping centre. Analysis by Latin Elephant puts the number of traders in peril at between fourty and fifty.

All the displaced traders (bar one) come from black and ethnic minority backgrounds and the campaigner’s letter demanded that UAL withdraw from the redevelopment, which includes a new UAL campus, in line with its Black Lives Matter statement “We aim to build our anti-racism commitments through collective engagement into actions that make a meaningful difference.”

No reply from UAL

Nearly a month after the letter was sent no reply has been received. We are printing below the stories of six of the displaced traders, in their own words, to prompt UAL into giving some thought to those who are losing their livelihoods so that they can benefit from shiny new premises. Southwark Council and developer Delancey might also want to take heed.

Nassim Cheraitain

My name is Nassim Cheraitian, I’ve been trading at Elephant and Castle market for over 20 years. The closing down of the Shopping Centre, for us, wasn’t good news, because they haven’t helped us. For the last three, four, five years business has been down, we’ve been losing, losing… they promised us they would help to find us to find a new unit but they didn’t. I applied, they asked us for all our details […] we provided them with everything. After that they said that there isn’t space for everyone. And it’s been left like this. We don’t have anywhere to go. They [the council] gave us £3000, but honestly it’s not really [been helpful]. £3000 is nothing — three years ago they told us they would help us, so all that time we’ve been waiting, the business has gone down, we’ve been losing money, losing customers every day, and we were waiting to get something back. Instead we got £3000. I don’t have any plans, as I’ve been waiting to get this promised help from the council […] we’ve been here for too long for them to leave us like this […] [my customers] are unhappy, they think it is unfair to us, we’ve been here too long to be left with nothing—no shop, no unit, nothing.

Shapoor Amini

My name is Shapoor Amini, I’ve worked at this market since 2001. These people promised us so many things, they said we’ll give you a space, we’ll look after you guys, but they’ve done nothing for us. Some people who were [trading] here for one year, two years, 6 months, they got a space. Me, I’ve been here 20 years, and they gave me nothing; they just said sorry, sorry, you still need to wait. And I don’t know what’s going on. I had someone who worked for me who got a space! But I’ve been here for twenty years and nothing. I applied so many times—I’ve made calls, been to the council, been to the office, done lots of paperwork […] been to countless meetings, and still nothing. I don’t know why not, they never talk to us face to face. They sent letters out […]some people got something, others didn’t […] everybody knows me here […] customers come to me as say ‘where is your new space?’, and I say I don’t know. My whole life has been spent in this market, in this area, and now I don’t know what to do. It’s very difficult for me. I have a kids, a wife… they said if you find yourself a shop we will help you. But at this late stage how can I find a shop? […] they promised us too much. Places are asking for a £30,000 deposit, it is very difficult.

Edmund Attoh

My name is Edmund, I’m working here [at the market] over 20 years. Things are very difficult, they gave a space to some people, who’d been here 5 years, 4 years, 2 years, people who have been here for a long time didn’t get nothing. That’s what we don’t understand, that’s why we are frustrated. We don’t know where we are going now. I applied for a space, and anything they asked, we give to them. They turned us down. But they didn’t say [why]. It has affected us […] someone who has been here for 20 years, and suddenly they say go. We don’t know where we are going. It is very hard for us. My customers always call me and ask where we are going. But we don’t know what to tell them […] that is a problem for us […] we’re looking to them (the council) […] we need help.

Mohammed Jamal

My name is Mohammed Jamal, I’m working in the market the last 8 years. I’m in a very bad situation, because I haven’t found a relocation […] I’ve got four children, and i’ve got no choice [but to work at the market] because I’m more than 55 now, and can’t find any other suitable job, and I’ve also got an illness I take medicine for […] customers ask ‘where are you going’ I said I still can’t find relocation […] because the council says there is no more relocation, it is all full. But I am still waiting for something to come up. One lady told me I’m not even on the waiting list […] she said your application is on file but not on the waiting list […] because there are so many people and the relocation spaces are limited […] I applied many times for a space […] and a small shop is alright for me […] I sent many emails, but no answer. The feeling of not having anything is very painful. If someone doesn’t speak English very well, or is softly spoken […] I am very soft, not talking a lot. That could be why no-one helped me.

Muhammad Raza

My name is Muhammad Raza, I’m working here since 2006. The market is dead now, before it was alright, but slowly, slowly they are closing down shops, big stores—Tesco, Poundland, Boots is going—it’s really dead now so it’s really hard to survive. And because we don’t have a space we don’t know what to do. Tree Shepherd and Delancey aren’t answering our emails, actually I emailed two days ago and didn’t get a response. This morning Tree Shepherd called me and said ‘if you find yourself any shop, we’ll help you’, I said which kind of help? Because I’m looking for a shop […] but if I look myself shops are £15,000, £20,000—I can’t afford that rent. And Tree Shepherd said they don’t have any affordable rents. If your looking for Castle Square or Elephant One, don’t even think about it […] they said ‘we’ll help you’, but which kind of help? I don’t know. This has affected my business, my life, my family, I don’t know what to do next.

Mohammed Al Waris

“My name is Mohammed Al Waris, I’ve been trading at the Elephant and Castle market for the past 15 plus years. Throughout these years I’ve been selling fashion accessories, and I’ve made friendships within the local community. Recently what happened was that they tried to demolish the shopping centre, and that affected most of the traders’ lives, I’m one of them. We haven’t been offered anything. We were asked to pick three different locations—Castle Square, Perronet House, Elephant One—they haven’t offered me none of them. They haven’t told me [why], they just said we haven’t got any affordable unit for you guys. At the beginning they promised us, and then we suffer for the past three years, they closed the subway (underground walkway) and the business going down by about 80%. Two years before they came with an application, saying that we going to definitely relocate you 100%. Now we have one and a half months left to leave the market, and we can’t get any help from Tree Shepherd, or from Delancey. Every time we talk to the they say ‘sorry we haven’t got anything for you guys’, so we can’t do nothing. I believe we are entitled to a place in this area, cos they are making millions from this project, why can’t they help these traders? These traders have families they are trying to look after. By kicking them out, they are destroying their family life […] I really hope they can think about these traders and help to move them to a place nearby the area, where they have their customers […] they say you can’t stay in the area because this area, like Central London, is going to be very expensive. So where should we go? We don’t know.”

Our campaign…

Our campaign is to get Nassim, Shapoor, Edmund, Mohammed, Mohummad, Mohammed and their fellow traders new premises or suitable compensation for the loss of their businesses. The power to do this lies with Southwark Council, Delancey and University of the Arts London (UAL), but time is running out fast – the centre is due to close on 24 September.

You can help us by sending a Twitter message to the Southwark Councillors responsible for this fiasco:

  • @peterjohn6 (Council Leader)
  • @rebeccalury (Deputy Leader, Ward Cllr and Cabinet member for Equalites and Communities)
  • @MerrilDarren (Ward Cllr and Chair of the traders panel that was supposed to support traders)
  • @cllrmseaton (Ward Cllr and Chair of the Planning Committee)
  • @JohnsonSitu (Cabinet member for Regeneration)
  • @Leo_Pollak (Cabinet member for Social Regeneration)
  • @steviecryan (Cabinet member for Jobs, Business and Innovation)
  • @coyleneil (Local MP and Elephant & Castle resident)

You can find more infomation about the displaced traders can be found here.
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35% Campaign update – Aylesbury estate regeneration to have new council homes

Aylesbury estate regeneration to have new council homes

Jul 12, 2020 12:00 am

Notting Hill Genesis to receive £210m bailout from Southwark -Southwark Council has announced that the First Development Site (FDS) of the Aylesbury estate regeneration will now deliver 581 council homes, increasing the number of social rented homes on the site by 280 units. The figures come from a Cabinet report to be considered on Tuesday 14 July. These will be the first new council homes on the regeneration.

Southwark will be paying for the new council homes, which will consist of 520 general needs, 54 flexi-care and 7 specialist learning homes, while Notting Hill Genesis will build them. This is a new ‘arrangement’ ; previously the homes were to have been built and paid for by Notting Hill Genesis, under the terms of a planning permission granted to Notting Hill Housing Trust, as it then was, in 2015. Southwark will pay £193m in development cost; it will also forego a further £17.8m in lost receipts from NHG, giving a total cost of £210.8m. Two GLA grants, totalling £54.5m, would bring the cost down to £156.31.

 Extract from Tuesday’s Cabinet report approving the decision

The good news

Understandably, Southwark councillors are making the most of the gain in council housing, which is undeniably good news. Local housing campaigners, both on and off the estate can also take credit – reducing the loss of social housing has been a consistent aim and at the centre of many hard-fought battles.

There are a couple of wrinkles though – a proportion of these social rented units will be needed to rehouse leaseholders decanted from later phases. How many remains to be seen – Phase 2 and 3 has 62 leaseholders yet to be bought out and their options include the new shared equity scheme introduced in response to the Secretary of State’s CPO ruling that BAME leaseholders were being wrongly displaced from their communities 2.

Also, the report is silent on whether the new council housing means that there will be a reduction in the net loss of social rented housing in the overall regeneration, or whether it is simply social housing being brought forward from later phases in the regeneration. The outline planning permission granted to NHG, who remain responsible for delivering the rest of the regeneration’s 2,745 units, still allows for a net loss of between 778 and 1,166 social rented units 3.

The not-so-good news

Southwark Council presents the cost of building the new council and other FDS homes as being a reasonable £238.4k per unit. Southwark arrives at this figure by assuming receipt of two GLA grants, reducing development costs from £193m to £138.5m.

But only one GLA grant has been secured and leaving the unsecured grant out of the equation and including the loss of £17.8m from NHG (for the land, and contributions to infrastructure costs) gives a total cost to Southwark of £182m and a less flattering cost per unit of £313k.

Neither of the above calculations, though, take properly into account the major fact that, under the existing delivery arrangements with NHG Southwark was to pay nothing for the housing, including the 240 social rented units; this was to be met by NHG.

So, while Southwark is now to get 581 council homes, instead of 240 social rented homes, this net gain requires an outlay of £193m gross – equivalent to £690k for each of the extra 280 units 4.

NHG takes all the private housing

NHG also get to keep part of the FDS land, so-called Package C, on which to build 261 homes for themselves, most of which, 170 units, will be private homes. These units comprise all the private housing on the FDS. There will also be 57 shared ownership, and 34 social rent 5.

NHG will also continue to build the homes on Plot 18, most of which are again private – 99 private homes, 6 shared ownership and 17 social rent. (This is despite the fact that it is no longer paying £6m towards Plot 18’s community infrastructure) 6.

This is all in stark contrast to the what NHG was supposed to deliver across the whole FDS under the Development Partnership Agreement (DPA) between Southwark and NHG, signed in 2014. Under the DPA, NHG was obliged to provide at least 50% affordable housing, 75% of which social rent – now this requirement has been abandoned 7.

An explanation?

NHG therefore appear to be walking away unscathed from their FDS obligations and while Southwark are getting many welcome council homes, they are having to dig deep financially to pay for them. The Cabinet report notes a knock-on effect for future housing investment 8.

An explanation for all this lies with the Development Partnership Agreement, which gives NHG an effective ‘viability veto’ on the progress of the regeneration. A DPA clause allows NHG to decide whether or not a particular plot or phase can proceed, depending on its viability. This viability test includes a 21% ‘priority return’ of revenue to NHG and is determined by their own assessment.

NHG’s circumstances have also changed for the worse since it signed the DPA in 2014. It has been forced to ‘significantly scale back’ its development pipeline, after a Regulator of Social Housing report last August concluded NHG, with more than 400 unsold private market homes sitting on its books, “faces a range of risks and exposure to sales” .

Southwark, on the other hand, has invested heavily, both financially and politically, in delivering the Aylesbury regeneration. It has been decanting homes for nearly 10 years and now 500 or so stand empty, or are being used for temporary accommodation. The first FDS homes were supposed to have been completed this summer (a two-year delay on the original timetable), but much of the site is still rubble. Phase 2 is still not fully empty and no planning application has been submitted. Further delays can be expected for any compulsory purchase order and a demolition notice.

It is therefore not difficult to see why Southwark might have felt compelled to make concessions to NHG, by taking over the delivery and meeting the cost of nearly all the affordable housing, while leaving all the revenue-generating free-market homes to NHG.

NHG holds Southwark over a barrel – again

Southwark has been forced to make such concessions twice before. In September 2016, Southwark agreed to underwrite or advance £22.1 million to NHG, for the FDS demolition and design costs, including a payment of £16.8m for demolition, that was to have been paid by NHG. This advance funding was to be recouped by the FDS land receipt, which will now not be paid. The report agreeing this also noted that Southwark was due to spend £52.5m on the Aylesbury regeneration by 2018/19 9.

In 2018, NHG was awarded £30m of GLA grant funding for the first phase of the scheme. The Development Partnership Agreement set out that any grant funding awarded to the scheme should go to Southwark, such that it receives some kind of remuneration for the sale of its land (see para 4.1, page 111). But NHG forced Southwark to agree to a variation allowing it to pocket the entire £30m 10.

What next?

Gaining 581 council homes is a boon for everyone in Southwark who depends upon social housing. Delivering these in the FDS phase also has the advantage that existing residents from later phases have a better chance of remaining on the Aylesbury.

But rescuing the Aylesbury regeneration is costing Southwark dearly. Southwark is plugging holes left by NHG’s failure to deliver. Southwark is paying not just for council housing on its own account, but also for social rented housing that NHG should have paid for, and Southwark is doing this with money that could otherwise be spent on building more council housing elsewhere. Meantime NHG retains choice pieces of land, in the middle of the Aylesbury, to build nearly 270 private homes. No figures are given in Tuesday’s cabinet report of how much NHG stand to make from this.

This is also not the first time Southwark have come to NHG’s rescue. Southwark has also spent £101m keeping the estate habitable, while the regeneration stalls under NHG’s stewardship 11.

At least four of the DPA milestones haven’t been met:

….and Southwark has the right to terminate the DPA if Notting Hill doesn’t meet milestones:

There is also a clause that allows the Council to terminate 3 years after it was first found that a plot wasn’t viable:

It would be a serious matter for Southwark to consider such a step, but given its past performance and its present circumstances it would be no surprise if NHG do not return, asking for more concessions and for more money. If this does happen, Southwark should take stock of the situation and consider whether this is the best use of its money.

Footnotes:

35% Campaign update – Old Kent Rd scheme faces loss of affordable housing

Old Kent Rd scheme faces loss of affordable housing

May 01, 2020 12:00 am

Berkeley Homes threatens to reduce affordable housing at Malt St –Berkeley Homes is the first developer in Southwark to threaten to reduce the affordable housing in one of its schemes, since the onset of the Coronavirus crisis. Berkeley secured planning permission for the Malt St development, just off the Old Kent Rd, in June 2019, with a promise to build 40% affordable housing. Since then it has joined-up with Peabody, who had a smaller, neighbouring development on Nyes Wharf. Together the two sites will provide 1,569 new homes, with 40% affordable housing (359 at social rent and 222 shared-ownership), delivered by Peabody.

Now a planning committee briefing reveals that this affordable housing is at ‘risk’ because Berkeley intends to mount an appeal that will reopen the question of the viability of the scheme. To prevent this happening, the briefing recommends approval of an unprecedented clause in Southwark’s s106 planning agreement with Berkeley, that could see all the affordable housing lost, should development partner, [Peabody] hit financial trouble.

The Southwark Law Centre has written to the planning committee, objecting to the proposed clause and requesting a deferral, to allow the serious issues it raises to be properly addressed.

Why a Mortgagee in Possession (MIP) clause matters

The planning committee is being asked to approve a so-called Mortgagee in Possession (MIP) clause. Simply put, if a borrower cannot pay their mortgage, then the lender can take legal possession of the property and sell it – they become the ‘mortgagee in possession’ and up until now this has evidently been covered with a clause that keeps the affordable housing affordable ‘in perpetuity’ .

The MIP clause proposed for Malt St is different – it will not secure the affordable housing ‘in perpetuity’ , should Peabody fail. Instead, Southwark or another affordable housing provider would be given the option to take on the affordable housing, but if they do not, the affordable housing can then be sold onto the open market. If Southwark does buy the affordable housing, they would also have to pay anything outstanding ‘under the terms of the relevant security documents, including all accrued principal monies, interest and costs and expenses’ 1.

The MIP briefing is at pains to point out that such a situation is very unlikely to arise, because Peabody is in rude financial health; it has an annual turnover of £630m, an annual profit of £160m and assets of £7.6bn, so the possibility that it will fail is remote. The briefing reinforces the point by noting that no major housing association has ever gone into administration and quotes a GLA document that says ‘there is no known cases of a MIP clause being triggered…..’ 2.

Mayor of London opens the door…

This all begs an obvious question – why replace a MIP clause that protects affordable housing, in all circumstances, even unlikely ones, with a clause that does not?

Part of the answer is that this is what the Mayor of London wants. As Southwark’s briefing explains it, the Mayor wants ‘a consistent approach to MIP clauses across the London boroughs and to secure greater access to funding for RPs (registered providers) to increase the delivery of affordable housing’. The report continues; ‘In order to achieve this, the GLA MIP clause would allow, in certain limited and unlikely circumstances, affordable housing to no longer be “in perpetuity”’ . The briefing notes that Southwark’s own MIP clause is different from the Mayor’s, precisely on this point; Southwark does require affordable housing to remain such ‘in perpetuity’ , should a RP go into administration 3.

Peabody takes advantage

Peabody also wants the GLA MIP adopted, because it would allow them to borrow more money for other projects. To quote the briefing ‘Peabody have funds to deliver this scheme, but given the very large scale of the investment they are only willing to make such a commitment on the basis that they are able to secure additional funding in the future against the asset of the completed scheme’ . The report says that while the Malt St scheme is ‘entirely financed by Peabody from its own investment’ Peabody nonetheless wants more private bank finance and needs to make more of its ‘capital assets’ and the banks consider that the affordable housing ‘asset is not sufficiently liquid’. The briefing reiterates ‘Peabody has confirmed that they cannot proceed as the RP [registered provider] partner in this scheme without this clause’ 4.

Berkeley turns the screw

Berkeley backs Peabody, saying that it cannot, or will not, proceed without them. Berkeley goes on to threaten to reduce the affordable housing in the scheme, if the GLA MIP clause is not agreed, by way of an appeal to the government of ‘non-determination’. Berkeley would argue that Southwark had failed to conclude the s106 legal agreement in the required time, and also reopen the question of the viability of the scheme 5. Berkeley has a track record for such manouvers; this 2018 Guardian report shows that Berkeley has reduced its affordable housing obligations using viability reviews in almost all of its London schemes.

Southwark’s briefing tries to make the best of things; as well as emphasising the unlikelihood of any default, it claims that this decision will ‘not therefore set a precedent for other schemes.’ The Mayor has different ideas – he wants to see his MIP clauses used across London and says they will be used for anything he ‘calls-in’, (such as the Biscuit Factory) and that he ‘will promote their use for other schemes that are referable…and non-referable’ ie basically everything 6.

What we think

A Mortgagee in Possession (MIP) s106 clause that has evidently been perfectly adequate up to now is to be changed, compromising the ‘in perpetuity’ principle of affordable housing. The Mayor hopes that this will help meet his strategic 50% affordable housing target, but Peabody and Berkeley are not proposing 50% for the Malt St site. More generally, the Mayor has published no concrete commitment from developers and registered providers to increase affordable housing, in exchange for the Mayor’s more market-friendly MIP.

So, while it would be easy for Southwark’s planning committee to approve the clause in the almost sure knowledge that it will never be triggered and the affordable housing will remain as such, ‘in perpetuity’ , they should nonetheless reject the Mayor’s new MIP clause. It purports to facilitate a general increase in affordable housing, but there is no evidence before the committee that this will actually happen, either in Southwark or elsewhere. On the other hand, though, the Mayor’s MIP will definitely weaken the ‘in perpetuity’ status of affordable housing

This is the thin end of a very long wedge. These clauses have already been used in Islington, Tower Hamlets and Lambeth. They are being actively promoted by the GLA and the Mayor. Once they proliferate the whole principle of affordable housing being for ‘in perpetuity’ will start to be lost and developers and their registered provider partners will use the same kind of ingenuity that they have used with viability assessments to squeeze real affordable housing out of London 7.

The briefing and its recommendation, will be considered by the planning committee meeting on Monday 4 May, the first to be held online.

Footnotes:

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35% Campaign update – The harsh reality of relocation for shopping centre trader

The harsh reality of relocation for shopping centre traders

Apr 23, 2020 12:00 am

Law centre survey shows that nearly half of traders have nowhere to go -The Southwark Law Centre (SLC) has written to Southwark Council, detailing the shortcomings of the relocation of the independent traders from the Elephant & Castle shopping centre, prior to its demolition on 31 July 2020. The letter is supported by Latin Elephant and Up the Elephant, which includes the 35% Campaign.

SLC’s letter supplies Southwark with the details of a survey of traders about the relocation, conducted just before the Coronavirus lockdown. This ‘snapshot’ survey of ten traders shows that 4 had not been offered a relocation space and the remaining six were offered the spaces that were inadequate, mainly because they were too small, but also because they were in poor locations for attracting trade and had no space for storage or for displaying their goods.

The letter also criticises the traders’ appointed business advisor, Tree Shepherd, for a lack of appropriate support, particularly during the lockdown. The relocation fund is described as not fit for purpose and the relocation database of limited value. It regrets that Southwark approved using CPO powers on Delancey’s behalf without any increase to the Delancey relocation fund.

The letter also notes that work on completing Castle Square had stopped and asks how this will impact on the traders’ relocation. This is one of the four relocation sites and due to open in June – but work has stopped as a result of the coronavirus crisis:

The letter acknowledges that Southwark is not able to control the wider economic circumstances, but nonetheless calls on them to give stronger and more effective support to the traders.

Loyalty not repaid

All the trader respondents to SLC survey come from black and ethnic minority backgrounds, the longest serving trader having been at the Elephant for 22 years, while the longest serving trader not offered relocation space has been there 15 years; all ten traders together clock up over 115 years at the shopping centre.

In their survey comments all the respondents say the same thing – that more money is needed, and more space, and if the space cannot be found then compensation should be offered.

Relocation applications rejected

The SLC survey is a relatively small, but its finding that 4 out of 10 traders have no place to go is mirrored by the much larger and earlier research of Latin Elephant/petit elephant. This has tracked the fate of nearly a hundred businesses, since December 2018 and estimated that only 40 would be relocated, a prediction that now appears to be confirmed by Southwark Council in its own assessment of the relocation process. This states that while there have been 64 applications for three of the four main relocation sites, only 36 have been successful, with 28 rejected1. Southwark gives no explanation for this, or says anything about what exactly it expects these 28 businesses to do. The fourth site, Elephant Park, has had one successful application out of 52.

Public support for development falls

Southwark prefers to emphasise the increasing confidence traders are said to have, that they will be able to at least remain trading, by reference to an Equality Impact Assessment (EIA). This is cited as evidence that the so-called mitigation measures are working, despite the 28 rejected relocation applications. The EIA also reveals the embarrassing fact that public support for the shopping centre redevelopment from 67% in 2016 to 42% today, mainly because of concern ‘about what will happen to businesses currently in the shopping centre’. The proposed remedy is to continue the well-meaning, but now hardly appropriate ‘Follow The Herd’ publicity campaign.

Crisis response needed

As we reported in our last blogpost Southwark has approved a welcome £200,000 in support of traders, agreed before the Coronavirus lockdown. Separately, Southwark has also launched a Business Hardship Fund of £2m, aimed at all the borough’s 10,000 microbusinesses.

But otherwise Southwark’s latest report on the progress of the shopping centre redevelopment takes no account of the entirely new, desperate circumstances of the Coronavirus pandemic. This could be excused as it is dated 24 March, the first day of the lockdown, but was not considered until 7 April, two weeks after lockdown, without any amendment or addendum, that recognised the new trading situation.

The report also gives no figures for any amount of money actually paid out to traders, from any source.

Support traders, not Delancey

Southwark has done Delancey the huge favour of adopting CPO powers and leasing both the shopping centre and the LCC, to override residents legal rights. While Southwark claim that is at nearly nil cost to itself, it will be of considerable financial benefit to Delancey, who would not otherwise have been able to secure the necessary funding for their redevelopment scheme3.

Southwark did this without insisting that Delancey improve its own support for traders. The relocation fund remains the meagre £634,700, agreed nearly 2 years ago, at planning committee. Delancey also still insist on closing the centre on the 31 July, with some minor concessions and despite the SE1 survey that showed 72% of local people want the centre kept open.

Over the past 3 years and more the shopping centre traders have been fighting a hugely unequal battle to keep their businesses going, while the centre has been rundown and trade blighted. Now is the time for Southwark to start giving the level of support it has been giving Delancey. It must get cash to traders for their immediate survival. It must tell Delancey it will not be using its CPO powers on its behalf, until all the traders are either relocated or suitably compensated and that there must be no centre closure until this is done.

You can support us in our fight for fairness for traders, by sharing these hashtags;

#supporttradersnotdelancey #supportelephantnotdelancey #ElephantJR.

Footnotes:


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35% Campaign update – Shopping centre CPO – Southwark ploughs on regardless

Shopping centre CPO – Southwark ploughs on regardless

Apr 04, 2020 12:00 am

Southwark exercises CPO powers to clear E&C shopping centre site for Delancey -Southwark Council is set to assume Compulsory Purchase Order (CPO) powers, on behalf of offshore developer Delancey, at its Cabinet meeting this Tues 7 April (postponed from 24 March). While this extraordinary move will strengthen Delancey’s hand in ongoing negotiations with various development stakeholders, such as TfL, and will relieve Delancey of funding risks, the scheme itself remains unchanged, delivering only 116 social rented units and displacing traders wholesale.

The Cabinet meeting is also set to approve a report that will override local residents’ legal rights, for the loss of light caused by the redevelopment. A third report will approve the recently announced £200,000 relocation assistance for traders.

The meeting will be by videoconference, but no livestream is advertised.

As we reported in our last blogpost Southwark intends to lease both the shopping centre and London College of Communications buildings themselves. Subleasing arrangements will return the shopping centre and LCC back to the control of Delancey and University of the Arts London, but as nominal public property, residents legal ‘right-to-light’ options can be overridden. Residents will no longer be able to seek an injunction against the development (while remaining able to claim compensation). Southwark say that there will be no cost to the Council from their leasing arrangements, other than officer time, but the report supplies no figures.

No guarantee that scheme will be built anyway

Southwark’s extraordinary measures illustrate its determined support for Delancey’s redevelopment of the shopping centre, despite the shortfall in social rented housing provided and the mass displacement of traders. Local charity and advocate for all traders Latin Elephant estimates that over half still have nowhere to go.

Southwark’s unwavering support extends as far as neglecting to obtain a guarantee from Delancey that the scheme will go ahead, even with the CPO powers being exercised on their behalf, saying ‘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.’ 1

72% say keep the centre open

The proposed measures follow a survey conducted by the SE1 news website that shows 72% of local people want the centre kept open, in the light of the Coronavirus public health crisis. In response Delancey reiterated that they still intend to close the shopping centre on 31 July, while waiving rent and service charges (a long-standing traders’ demand) and promising to making pharmacy and food supplies available, beyond then, if the public health crisis continues.

What we say…

The Up the Elephant Campaign, supported by the 35% Campaign, has consistently opposed Delancey’s shopping centre redevelopment scheme, since its inception, over 3 years ago. We support the ongoing legal challenge to quash Delancey’s planning permission.

Over time various concessions, dragged out of Delancey by campaigners, have made marginal improvements to the redevelopment. Southwark’s pledge of £200,000 for the traders is also welcome; it now urgently needs to be distributed as cash grants to traders. Nonetheless, Delancey’s scheme still remains a bad one. Delancey are displacing an entire community of traders, and destroying a social hub for the many working people from all over the world who have made the Elephant their home. The new development will have a miserly 116 social rented homes, out of nearly a thousand new units (if they ever get delivered).

So, Southwark Council should not be bending over backwards helping Delancey, in any circumstances – certainly not now, when half the traders still have nowhere to go, while Southwark has an obligation to help secure traders accommodation in the new development it never properly exercised. We do not need to add that the traders’ desperate situation has been rendered dire by the Coronavirus crisis.

The UP THE ELEPHANT CAMPAIGN HAS THEREFORE MADE THE FOLLOWING DEMANDS TO SOUTHWARK COUNCIL;

You can support us in our fight for fairness for traders, by sharing these hashtags; #supporttradersnotdelancey #supportelephantnotdelancey #ElephantJR.

Or by lobbying the Councillors approving the decision directly: https://twitter.com/peterjohn6https://twitter.com/rebeccaluryhttps://twitter.com/evenor23https://twitter.com/Jasmine_Alihttps://twitter.com/steviecryanhttps://twitter.com/Livingstone_RJhttps://twitter.com/Victoria_Millshttps://twitter.com/Leo_Pollakhttps://twitter.com/kieronjwilliamshttps://twitter.com/JohnsonSitu.

  1. See para 76 Report: E&C CPO 

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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

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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 

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