A BIG WEEK FOR THE CAPITAL
Some big decisions have been made in the last week. The long-running controversy over the future of heart surgery at the Royal Brompton has been resolved while the Moore Stephens review into the spiralling costs of the Olympic Stadium transformation has reported with significant consequences for those involved.
Meanwhile, bigger is clearly better for both Crystal Palace FC – who are vying to have the biggest stadium south of the Thames – and retail groups Intu and Hammerson, who will together make the largest real estate company in the UK following an acquisition of the former by the latter.
In this edition we also continue to track TfL’s financial situation and the movements of the Mayor, who this week is out banging the drum for London in India and Pakistan.
As always, we’d love to hear your feedback and comments, do get in touch!
MOORE STEPHENS REPORT
Accountancy firm Moore Stephens has released its long-awaited review of the London Olympic Stadium’s management and legacy, from its inception to present day. Commissioned by Sadiq Khan, the report has found that the crunch point was the decision in 2011 to adopt a ‘Public Sector Model’ in which the taxpayer would own, transform and operate the stadium. It has found that ‘insufficient attention’ was paid to possible operating models and the associated legal/State Aid implications. It also cites Boris Johnson’s ‘weak negotiating position given all the risk was on the public purse’. There is also general criticism of the lack of scrutiny of financial decisions made by the previous Mayor which has resulted in the costs of converting the Olympic Stadium from an athletics stadium into a multi-use venue spiralling to £323m, £133m more than originally forecast. The Mayor has responded to the report by agreeing to take control of Newham Council’s share in managing the stadium (as part of the E20 partnership), in order to minimise on-going losses from the project. The London Stadium is forecast to lose £24m in this financial year alone. Mayor of Newham Sir Robin Wales has said that the Council’s decision to invest was based on the assumption that the previous Mayoral administration had acted with ‘due diligence’. A source quoted as speaking for Boris has placed the blame with his own predecessor, Ken Livingstone, and his decision to sign off a ‘stadium fit only for athletics.’
BROMPTON HEART SURGERY TO CONTINUE
After a long, local campaign NHS England has decided to allow The Royal Brompton’s heart surgery unit to stay open, subject to the hospital showing ‘that they have a programme’ to meet new standards of care. Last week the Royal Brompton and Harefield NHS Foundation Trust outlined a new proposal for meeting the standards, joining with King’s Health Partners, which comprises of a number of hospitals in south London. They plan to develop a purpose-built facility - reportedly in the vicinity of St Thomas’ hospital, south of the Westminster Bridge - as well as increase investment at other sites. Bob Bell, the Trust’s chief executive, said they ‘are pleased to have been given the opportunity to shape our own destiny by continuing to explore this collaboration and will do so in a planned and rational way.’
CRYSTAL PALACE STADIUM PLANS
Crystal Palace FC has unveiled plans for a new main stand which, if built, will make Selhurst Park the biggest stadium south of the Thames with more than 34,000 seats (it is currently 25,000). Designed by sports specialists KSS (who have also designed stands for Liverpool FC and Twickenham), with a nod to the original Crystal Palace building which burned down in 1936, the redevelopment cost is estimated at around £75-£100m. The football club has put public pressure on Sainsbury’s, which owns a small ‘sliver of land’ required, with Chairman Steve Parish remarking that ‘I can’t imagine for a minute that Sainsbury’s want to be the people who hold up the development of a new iconic venue for south London.’ The club’s case has since been helped along by positive comments from Croydon Council leader Tony Newman, constituency MP Steve Reed (Lab) and of course, the fans. Plans are due to be submitted to the Council in January and, subject to permission being granted, will see the stand being redeveloped over the next three years.
TWO INTU ONE
Retail property giant Hammerson has agreed a £3.4bn acquisition deal with Intu Properties, creating a £21bn portfolio of retail and leisure destinations across Europe. Group chief executive of Hammerson, David Atkins, has said that the company will keep the Hammerson name, whilst the shopping centres it now collectively owns will gradually be rebranded as intu. The acquisition will create the largest listed real estate company in the UK.
LBC reported earlier this week that 17 of 37 of sitting Conservative councillors in the Royal Borough of Kensington and Chelsea will not be standing for re-election next May. Reporter Rachael Venables said that she was shown a list of councillors who have either decided to step down or been de-selected. It was to be expected that the Conservatives’ current line-up would be impacted as a result of the Grenfell Tower fire and former council leader Nicholas Paget-Brown made it clear in October that he will not be standing next May. However, there are a surprising number of seasoned councillors on the list, many of whom have participated actively in Grenfell survivor relief efforts. Venables, who emphasised the link between this latest development and communities’ anger over Grenfell, admitted that there has been a mixed response to this from residents; while some would want to see even more councillors defenestrated, others fear that at this stage, it could merely disrupt ongoing relief efforts. Meanwhile, ICM has found that 63% of local residents polled would be at least fairly likely to vote for a new party, something the borough’s newly-formed Advance Party will be pleased to hear.
Fresh from launching the new draft London Plan last week, Sadiq Khan is now on a six-day trade mission to India and Pakistan, with Deputy Mayor of London for Business Rajesh Agrawal at his side. On the first two days of his trip alone he was interviewed by Indian and British media, attended the finals of the Queens Park Rangers Mumbai Soccer Challenge, rubbed shoulders with Bollywood royalty, delivered the keynote speech at the #LondonIsOpen business event and launched ‘the biggest-ever UK/Indian TV co-production’. Among the photo-ops, Sadiq did find time to reassert his mandate to safeguard London’s status as a global city post-Brexit. And despite being on the other side of the globe, he was quick to comment on UK-EU negotiations in Brussels this week, suggesting that if Northern Ireland were to remain within the single market and customs union after Brexit, then London could benefit from ‘a similar deal’.
TFL BUSINESS PLAN(NED)
Transport for London’s (TfL) draft Business Plan has been published for consideration by the authority’s finance committee. It sets out TfL’s broad plans and targets for the five years from 2018/19-22/23, outlining how it will deliver the Mayor’s Transport Strategy. There are ambitious targets for improving performance as well as pushing ahead with major capital investment projects such as Tube upgrades, Crossrail 1 and 2, Oxford Street pedestrianisation, the Silvertown Tunnel, and a major housing development programme. But the very same document paints a somewhat bleak picture of TfL’s finances. Its total income grew by about £22m between 2015/16 and 2016/17 (to a total £6.763bn), but is projected to fall by roughly £242m in 2017/18 (to an estimated £6.521bn) because of falling passenger revenues and a shrinking government subsidy for operating costs. Indeed, TfL has seen a dip in journeys on its Underground and Bus services on an annual basis – with one recent BBC London News bulletin reporting that rail journeys in London and the South East are down 5% in the last year, bus journeys down 6% in the last three years and that there were 13m fewer tube journeys in the past twelve months than the year before. In this context, and with the additional challenge of the fare freeze imposed by the Mayor, it is clear that continued focus on and growth of TfL’s commercial revenue streams – including income from exploiting its commercial and property portfolio - is critical to the progress of its transformation and upgrade programmes.
ANOTHER HOUSING REVIEW
The Government has commissioned a ‘Review of build out’ – i.e. the gap between residential permissions granted and the number of homes actually built. The review panel is to be chaired by Sir Oliver Letwin, Conservative MP for West Dorset, who has been tasked with delivering an interim report in time for the 2018 Spring Statement and a full report for the 2018 Budget. The full terms of reference have yet to be published.
SPORTSDIRECT.COM @ BRIXTON MARKET
Some eyebrows were raised last week over press speculation on a possible buy-out of Brixton Village Market by Sports Direct and Newcastle United owner Mike Ashley. The plot total has been valued at £30m, with market experts speculating that Ashley could be vying to consolidate the area so that it operates in a similar fashion to Camden Market, owned by Israeli tech billionaire Teddy Sagi. In 2009 Ashley memorably renamed Newcastle United’s football ground to ‘sportsdirect.com @ St James’ Park Stadium’ so patrons of the thriving market may hope that if the buy-out goes ahead he has something slightly more subtle in mind.
ENTER THE SLIDEATRON
A world first has now landed at Wembley Park in the form of Slideatron – an alternative, LED-lit Christmas tree featuring a free 20m long slide! Thrill-seekers can pre-book now to ride, or simply turn up. Meanwhile, those who prefer their feet firmly planted on the ground can still experience the hourly light show set to a remixed Christmas soundtrack, while enjoying the Slideatron Festive Food Market and Bar.
Last Thursday, LCA hosted a table at the International Building Press’s 44th Annual Journalism Awards Dinner. The awards acknowledge the talents of the journalists we at LCA often work most closely with in the Built Environment Sector and we were delighted to support them again this year. The evening was hosted by Lord Black of Brentwood and Chairman of the NLA, Peter Murray and Inside Housing Magazine were extremely successful, winning more than half of the awards up for grabs.
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