Presentations can be found by clicking here – PART 1 and PART 2.
ULI UK members gathered at the offices of CMS for a half day conference looking at case studies of selected joint venture Public Private Partnerships in London and to hear from key leaders who were instrumental in shaping these deals. The projects that were discussed were: King’s Cross, Taberner House, Transport for London’s commercial development initiatives around London as well as regeneration schemes for Canada Water and Brent Cross South.
Robert Evans from Argent reflected on the King’s Cross regeneration scheme and the challenges it faced from the economic downturn. The key issues were; fixing the land value/cost and aligning interests, the phasing, funding and delivery of infrastructure and public realm to enable site development, dealing with market skepticism and shifting perception, dealing with heritage buildings and managing cash flow vs optimizing long term value. The landowners stayed in for the long haul and were rewarded but the right capital and capital structure was the key.
Steve Sanham of HUB talked about the Taberner House regeneration in Croydon of a former council office building site into a mix of residential housing types that met the needs of the community and highlighted the challenges of community engagement.
Graeme Craig of Transport for London’s Commercial Development group described the partnerships with developers that they have been creating in order to use their extensive landholdings in London to meet the Mayor’s target of building homes for Londoners and also generate revenue for TfL’s transportation improvements. They are using their developments to foster healthy streets and better neighbourhoods.
Emma Cariaga of British Land talked about the regeneration of the Canada Water area from an 80’s style auto oriented shopping centre into a new mixed-use town centre in partnership with Southwark Council. The Council maintains the freehold and can participate in the income stream from individual building site developments, but British Land gets autonomy to determine the scale and phasing of development.
Karen Mercer from the LB of Barnet and Andre Gibbs from Argent spoke about the regeneration of Brent Cross South into a new mixed-use town centre. The Council lead the construction of a new Thameslink station to unlock housing and commercial development on the site. A joint venture partnership with Barnet and Argent was created to assemble the land and deliver the infrastructure. Each side gets a financial reward from the development.
A roundtable discussion followed on issues that impact creating successful PPP projects. The panelists were Emma Cariaga from British Land, Graeme Craig from TfL and Colm Lacey from Brick by Brick. Issues raised included the need for flexibility and clear intentions up front, building resilience into plans, understanding that policies and politics can change over time. There is a need to divide risk at the beginning and to bring in developers who have a long-term view over a short term one. It is also important to engage the local community throughout the process to create a sense of ownership. Build in intangibles such as infrastructure improvements that affect value and what may be possible on site.
It was felt that there should be a social development charter enacted for each project to monitor social issues being addressed in the development over the life of the project. Also, better PR on PPP success stories is needed to help mitigate the suspicion that these types of projects are a bad deal for the public sector. Local authorities are learning to be more commercially savvy given their current lack of central government resources. The higher borrowing capacity granted by central government will help provide access to capital to make PPP’s more likely by local authorities over the next several years.