Bethel Estate | 04.02.2013 11:26 | Social Struggles
Local campaigners long active against the gentrification of the area say it shows how the local community has been sold a rubbish deal as the Council has accepted a low amount of money from Lend Lease for a high value piece of land in return for very little social rented housing. The land in question is the 9 hectare Heygate Estate site which used to be 1100 council homes.
The leaked document has been picked up and commented on by local groups and campaigns:
PRESS RELEASE 31.1.2013
Badly redacted document exposes confidential figures behind Southwark’s £1.5bn secretive regeneration scheme.
Southwark Council has accidentally exposed the contents of its deal with global property giant Lend Lease for the £1.5bn regeneration of the Elephant & Castle. A redacted PDF version of its confidential regeneration agreement was uploaded to the Council’s website as part of its compulsory purchase proceedings against remaining residents on the Heygate Estate which is a key site for the regeneration scheme:
(LINK NOW REMOVED BY COUNCIL)
However the document has left it possible to copy and paste the heavily blacked-out text straight into any word processing software to reveal the entire contents. This comes as a welcome surprise for local campaigners who have been heavily critical of the lack of transparency around any real details of the Council and Lend Lease’s regeneration deal.
The unintentional breach of the Regeneration Agreement’s strict confidentiality clauses comes after lengthy proceedings to censure an opposition councillor, who claimed the agreement was poor value for money after it was signed in July 2010. Southwark’s cabinet member for regeneration, Cllr Fiona Colley response to these claims was that land value payments had been reduced in favour of a guarantee of 25% affordable housing, itself a breach of Southwark’s policy of a minimum 35% for developments in the Elephant & Castle Opportunity Area. However the recently approved Heygate plans propose just 79 social rented units out of a total 2,535 new homes.
The document reveals that having spent £44m on emptying the Heygate Estate, Southwark Council is set to receive just £50m in return for the 22 acre site. The agreement does give the Council a share of overage (profit left after the developer has taken a 20% priority slice), but a report from the District Valuer shows a viability gap such that there is actually unlikely to be any overage.
Comparisons with other development sites at the Elephant show that the Council is receiving well below market value for its land: the neighbouring Tribeca Square 1.5 acre development site exchanged hands on the open market in 2011 for £40m. This is £10m below the council’s deal for the 22 acre Heygate site (see attached Land Registry info). The phased nature of the scheme, together with the cheap price of the land makes it more likely that the developer will engage in ‘land banking’ as they had previously done on the Greenwich peninsula Millennium site.
Local campaigning groups have long been critical of what they see as the ‘social cleansing’ of the area and the failure of the regeneration to bring local benefits to the existing community. They say that the Council’s administration has sold the Elephant short in order to gain political advantage by honouring its manifesto pledge to deliver the regeneration after years of stalled negotiations.
 Paragraphs 5.34 – 5.35: http://www.southwark.gov.uk/download/8171/proofs_of_evidence__jon_abbot__final_proof
 See pages 6 & 10 of the Regeneration Agreement – (Heygate Headlease Premium £46m + Rodney Rd. Headlease Premium £4m)
 See Officer Report 12/AP/1092 paragraphs 150-153: http://planningonline.southwark.gov.uk/DocsOnline/Documents/271840_1.pdf
 Land banking is the practice of buying land with the intention of selling it when it becomes more profitable. Typically, land is divided into smaller plots and sold on to developers once it rises in value.