LONDON BOROUGH OF BARNET (BRENT CROSS CRICKLEWOOD) COMPULSORY PURCHASE ORDERS (NOS 1 AND 2) 2015 SUMMARY PROOF OF EVIDENCE

Transcription

1 AA/AG/3 LONDON BOROUGH OF BARNET (BRENT CROSS CRICKLEWOOD) COMPULSORY PURCHASE ORDERS (NOS 1 AND 2) 2015 SUMMARY PROOF OF EVIDENCE ON BEHALF OF LONDON BOROUGH OF BARNET ANDRE GIBBS Chief Operating Officer BXS DM Limited

2 1. Qualifications, Experience and Scope of Evidence 1.1 My name is André Gibbs. I am a Member of the Institution of Structural Engineers and a Chartered Engineer. I am a Partner at Argent (Property Development) Services LLP ( Argent ), the Chief Operating Officer of BXS DM Limited (the Development Manager ) and will be a Director of BXS GP Limited, the general partner of BXS Limited Partnership ( BXS LP, the CPO2 Development Partners, and which will be formed shortly) and AR BXS Limited. (Please see the summary ownership structure chart in Appendix F of my evidence.) 1.2 I joined Argent in 1998 and have been actively involved in all of Argent s London projects, including, the London King s Cross Central regeneration project since its inception. 1.3 Within Argent, I have day to day involvement in business planning, finance, operations, construction procurement, risk and environmental sustainability. I will bring this experience to the delivery of Brent Cross South ( BXS ). I also have overall responsibility for managing the Argent Related team delivering the BXS redevelopment which I have led since our selection as preferred bidder in March I will provide evidence on behalf of BXS DM Limited in its role as Development Manager for BXS LP. I will also provide evidence of Argent Related s combined experience, commitment and ability to fund the delivery of the CPO2 Development (and BXS). 1.2 My evidence principally pertains to CPO2, however, it also relates to CPO1, as the CPO1 Order Land lies in part within BXS. 2. Argent, Related, the Argent Related partnership and the CPO2 Development Partners Argent 2.1 Argent is one of the UK s leading privately owned property companies. Its principal activity is the provision of development and asset management services to property related projects. Argent and its senior management team also directly invest in most of the projects that Argent brings forward. 2.2 In Birmingham, Manchester and at King s Cross Central, London, Argent has been successfully engaged on some of the most significant mixed-use redevelopment projects in the United Kingdom. I provide details of some of our more recent projects within my evidence. 2.3 Argent intentionally focuses on just a few exceptional schemes at any one time. Argent seeks to create value through excellent design, careful planning and 1

3 intelligent execution. Our culture is one of making long-term commitments to projects. Our approach (as illustrated at CD/F10) is to build places with a sense of community: we believe an important factor in this is investment in public spaces. 2.4 Over the last 15 years, Argent has delivered 4.4 million sq ft of development, with a further 3.6m sq ft to deliver at King s Cross Central alone. Related Companies ( Related ) 2.5 Related is one of the leading privately-owned real estate firms in the United States. Formed over 40 years ago, Related has experience in virtually every aspect of development, including, acquisitions, management, finance, marketing and sales. 2.6 With headquarters in New York City, Related focuses its development activities in gateway cities in the US and internationally, including, Boston, Chicago, Los Angeles, Sao Paulo and Shanghai. Related is currently developing the 28-acre Hudson Yards project in New York. A summary of recent Related projects is contained in my evidence. For some time, Related has been keen to expand its operations into London as the key gateway city in Europe. 2.7 Related boasts a team of approximately 3,100 professionals. Related s existing portfolio of real estate assets, valued at over $20 billion, is made up of mixeduse, residential, retail, office and affordable properties. 2.8 Related also manage approximately $3 billion of equity capital on behalf of sovereign wealth funds, public pension plans, multi-managers, endowments, Taft Hartley plans and family offices. Related owns and manages over 48,000 housing units across the USA aimed at all sectors including affordable housing, workforce housing and luxury rental apartments. Argent Related a new partnership 2.9 Argent Related is a new partnership between Argent and Related. Argent Related Limited Partnership was established on 2 March 2016 and Argent Related (General Partner) LLP was incorporated on 29 February The new partnership draws on the experience and funding track record of both Argent and Related Through Argent, we have an established and experienced team of over 140 staff based in the UK. We have in place strong development management, infrastructure, planning, project delivery, asset management, community engagement and finance teams, as well as all of the required support functions. We also have corporate governance and management structures in place to ensure efficient and smooth delivery of a project. 2

4 The CPO2 Development Partners 2.11 Argent Related and the London Borough of Barnet have reached the final stages of agreeing joint venture documentation to establish BXS LP (the CPO2 Development Partners ) which will bring forward the CPO2 Development and BXS. 3.0 Need for the CPO2 Order Land and Delivery of CPO2 Development 3.1 The CPO2 Order Land (CD/F2) includes three blocks of flats within the Whitefield Estate, light industrial land uses and poor quality public realm as described in detail by Cath Shaw and Paul Astbury. The planning policy context for comprehensive regeneration is detailed by Tom Wyld. The need for the land is described in the Acquiring Authority s note dated 7 March 2016 (CD/E6) and in my evidence. 3.2 The CPO2 Development Partners anticipate the delivery of the comprehensive development of BXS over the next 20 years, targeting a start on site in The CPO2 Order Land together with elements of the CPO1 Order Land comprising highway infrastructure serving the CPO2 Order Land (and enhancements to Council owned Clitterhouse Playing Fields and Claremont Park) will form the initial core of development of BXS. The CPO2 Order Land will deliver a new east-west route, new public realm, residential and retail development, as well as small business space and a replacement school. 3.3 Since March 2015, Argent Related and our design team have undertaken a detailed interrogation of the s.73 Permission (including the Indicative Layout Plan (CD/C3, CD/C18 and plan 10, CD/F2)) and its proposed early phasing. We have worked closely with Simon Slatford during this period, as he describes, to better understand the s.73 Permission and its related parameters. 3.4 This work has led to a reconsideration of the current indicative programme of delivery of sub-phases and development plots within the CPO2 Order Land. It has also led to a desire to introduce some enhancements to the indicative layout, for example, a redistribution of open space, some variation in height and density across the scheme, to create interest, and also an associated shift towards greater variety in residential and commercial building typologies. This will ensure that the potential benefits of regeneration can be fully realised to meet the needs and demands of the time. 3.5 The s.73 Permission and associated S106 Agreement (CD/C6) anticipated delivery of the Whitefield Estate Replacement Units (Part 2) within Phase 1. This will remain the case. As indicated at Appendix D of my evidence, we propose to deliver those replacement units within the first plot development to come forward, targeting completion in early BXS LP is in the process of selecting a 3

5 Registered Provider partner through a two-stage tender process with a view to selection in summer this year. The RP will assist with engagement with residents and design development, as well as advising on an updated Residential Relocation Strategy, delivery and letting plans. 3.6 Argent Related s aim is to seek to create a real place where people want to be from the moment they start to move in and to ensure that it is served by and linked into the surrounding area by high quality public realm from the outset. Plan reference BXS-LETI-CPOR-40-A-P01 within Appendix E of my evidence shows our current intentions for the core area of BXS (including, CPO2 Order Land). As explained in my proof, the creation of place through the early delivery of high quality public spaces is, I believe, a key to the success of our other schemes. 3.7 Simon Slatford s evidence describes how these proposed enhancements would be brought forward and concludes that they present no planning impediment to delivery. 4 Funding and Delivery 4.1 My proof demonstrates how the financial strength of Argent Related and Related means there is no impediment to funding the scheme. The CPO2 Development (and BXS) can be funded, is viable and is expected to remain viable. 4.2 Both Argent and Related have strong funding track records and good relationships with all major construction lenders. This funding has come from a combination of banks, institutions and pension funds, sovereign wealth funds, in addition to core equity. Examples include Wells Fargo, Barclays, and the BT Pension Scheme through Hermes. A summary of our respective fund raising experience from each of these external sources is included within my evidence (and Appendix A of my evidence). The Joint Venture Arrangements 4.3 The Project Agreement and associated Development Management and Infrastructure Agreement ( DMIDA ) are close to being agreed. The DMIDA includes a guarantee from Related of BXS DM Limited s obligations. BXS DM Limited will be the development manager procuring delivery of serviced development plots. The Council will inject their existing land into the project in return for future land receipts and sharing in surpluses. 4.4 As I explain in my evidence, the Project Agreement includes conditions precedent which I am confident will be met. 4

6 Funding Land Acquisitions and Land Assembly 4.5 BXS LP will be responsible for funding the remaining land acquisitions within the CPO2 Order Land where the freehold interest has not been secured by the Council by private treaty. Related is to provide (through the CPO2 Indemnity Agreement) a guarantee of BXS LP s indemnity of and obligation to pay the Council s relevant costs associated with CPO2, including land acquisition costs. 4.6 The Acquiring Authority is likely to retain the freehold of the land acquired. BXS DM Limited will be granted a licence to enable access and delivery of infrastructure. Once serviced plots have been created, a special purpose vehicle company or partnership will be granted a long lease to enable the construction of buildings. Funding Infrastructure and Master Developer Costs 4.7 BXS DM Limited will be responsible for implementing the funding strategy which will include a combination of core equity, external investment and bank debt. Argent and Related are experts in raising capital for development. Our extensive network of funders include institutional investors, pension funds, private clients, private equity funds, listed vehicles, sovereign wealth funds and banks. 4.8 I am confident that the quantum, levels of return and respective risk profiles of the investment will attract many investors at competitive rates. Funding Plot Construction Costs 4.9 Plot development costs will be predominantly funded by third party debt raised by the relevant plot special purpose vehicle, and secured against the land comprising the plot. Equity will be used to supplement debt, where appropriate I currently anticipate that all of the development plots in the CPO2 Order Land will be brought forward by Argent Related SPVs. I do not anticipate that raising equity or debt will be an impediment to plot development. Related Companies LP Corporate Financial Strength 4.11 Related has excellent financial strength, having successfully developed over $30 billion in projects. Related owns approximately $20 billion in assets, carefully manages its balance sheet and maintains ample liquidity to meets its obligations and growth prospects. 5.0 Conclusions 5.1 I have considered the case for CPO2 (and where appropriate, CPO1) in the context of the matters set out in the CPO Guidance (CD/A17) that are relevant to my evidence and conclude that there are no physical or legal impediments to delivery. 5

7 5.2 The s.73 Permission creates a clear framework for the use of the land. Although we are proposing some enhancements to the approved development, the overall use of and need for the land remains as described within the s.73 Permission. Simon Slatford provides evidence that those proposed enhancements can be delivered through the planning system. 5.3 I conclude in my evidence that it is clear that without ownership and control of the entirety of the CPO2 Order Land, it will not be possible to achieve the comprehensive and integrated regeneration of the area. 5.4 In my evidence, I have detailed the funding that Argent Related and BXS LP have available: I am confident that the necessary funding will be available to acquire the land and deliver the CPO2 Development within a reasonable time-scale. In addition, the legal arrangements, in the form of the joint venture agreements, will shortly be in place. 5.5 I believe that the work and expenditure we have incurred to date, both in entering into the joint venture and in interrogating the indicative masterplan, indicates the level of our commitment to delivering this project. To date, we have invested approximately 5m and following the imminent formation of BXS LP, our rate of expenditure will increase rapidly, with total additional investment before a substantive start on site, likely to exceed 25m. The resources are available to cover this investment. 5.6 I address relevant objections within my evidence and conclude that there are no identified reasons to suggest that there is not a reasonable prospect of the CPO2 Development (and BXC as a whole) going ahead. 5.7 I am entirely satisfied that the s.73 Permission, its parameters and its flexibility provide the foundation for a successful regeneration scheme that will bring with it social, environmental and economic benefits. It is critical that CPO1 and CPO2 are confirmed as soon as possible to allow BXS LP to work towards the targeted start on site of 2018 and commencement of this important regeneration scheme. 6