ADD380 Hale Village Agreement Legal Appointments

1.1 In 2009, the Homes and Communities Agency (HCA) invested in Lee Valley Estates (LVE) Hale Village development at Tottenham Hale. These arrangements were transferred to the GLA Land and Property Limited (GLAP) in 2012 following the devolution of the HCA in London and as provided under the Localism Act.

1.2 The “Hale Village Investment Agreement” (the agreement) was designed to help fund the redevelopment of the former industrial estate at Tottenham Hale through a loan arrangement, and a stake in the development termed as an ‘equity stake’ within the agreement terms. Notably this is not a true equity investment, but an investment with the potential for uplift, but without guarantee of return. As part of the security for the investment, the GLA holds a charge over the development until the terms of the Agreement are fulfilled.

1.3 A competition was held by LVE in 2014/15 to appoint a development partner for the final phase, which would trigger resolution of the Agreement. Bellway Homes were appointed as part of that process. The package proposed by Bellway would ultimately provide sufficient finance to trigger payment of the gross receipts element of the funding cascade, creating a return of funds to the GLA and resolution of the Agreement.

1.4 However, having appraised the structures for delivery that Bellway is proposing, the existing structure of LVE and the delivery company formed to take forward the Hale Village Scheme, ‘Hale Village Properties’ (HVP), LVE have identified the financing structure they have in place would not be compatible with the existing Investment Agreement with GLAP, and therefore not allow them to treat with Bellway and complete the development.

1.5 Therefore it is in GLAP’s interest to ensure the development comes forward, not just in order to deliver much needed new housing within the Tottenham Housing Zone, but also in order to realise the repayment of monies due to the GLA, which in turn will help to fund the operation of the GLA and delivery of the Mayors strategies and policies.

1.6 Once a suitable way forward is agreed, a paper will proceed to HIG, IPB and for Mayoral Decision to agree these terms and structures. However, before this can take place GLAP needs to be confident that the proposed structure ensures that its interests remain suitably protected and that returns are maximised.

1.7 This paper seeks agreement to appoint Eversheds LLP to a maximum fee of £17,000, to act on GLAP’s behalf to provide external advice on the terms of this Agreement and the structure going forward to ensure GLAP achieves Best Consideration for its interests in this matter, and maximises the return to the public purse. Eversheds LLP have provided a quote of £11,750 to act in this matter, with additional £5,000 expenditure should full title checks and reviews of securities be required.

1.8 Eversheds LLP have acted previously for GLAP and the GLA in similar matters and as such are felt to have the team, competency and relevant knowledge to be able to undertake this matter swiftly and diligently. Eversheds LLP will be appointed from TfL’s Legal Framework arrangements, and as such no competitive process is required in this instance.

2.1 Following advice from Eversheds LLP to proceed, the resolution to amend the Agreement to allow the Bellway Agreement to be completed will ensure the GLA continues to have sufficient security over the site, whilst ensuring the ongoing viability of the development scheme.

2.2 This in turn will ultimately lead to the repayment of the monies owed to the GLA in full, alongside securing the delivery of approximately 250 new homes within the Tottenham Housing Zone.

3.1 The proposed resolution to the existing funding agreement is aimed at delivering new housing units within Haringey and the Tottenham Housing Zone, which in turn will help to implement the Mayor’s policies set out in the Mayor’s London Housing Strategy. In January 2014, the GLA published an Integrated Impact Assessment (IIA) including an equalities impact assessment of that strategy. The policies related to the increasing of housing supply of which this paper relates were covered by the IIA for the Further Alterations to the London Plan.

3.2 The IIA concluded that updating housing projections and targets would support the delivery of sufficient housing and may help stabilise housing prices supporting equal opportunities throughout communities. Furthermore, the provision of housing including maximising the delivery of affordable housing would be in line with other policies of the plan (e.g. Policy 3.5) ensuring that the needs of different groups are taken into account in the housing design.

3.3 The delivery of new and additional homes within the Housing Zone and particularly those facilitated on this site will help to implement Objectives 1, 2, 3 and 4 of the Mayor’s Equalities Framework “Equal Life Chances for All” (June 2014) through the creation of new homes, housing products and well-designed housing schemes.

4.1 The appointment of Eversheds LLP to act on GLAP’s behalf in this matter is designed to minimise the risks to GLAP, and to ensure it achieves Best Consideration for its interests in this matter.

4.2 Once a suitable way forward is agreed, a paper will proceed to HIG, IPB and ultimately for Mayoral Decision to agree these terms and structures.

5.1 The revenue expenditure for the appointment of Eversheds LLP is expected to cost up to £17,000 in the current financial year (15/16).

5.2 There is a revenue budget of £22,000 in GLAP (HR.00024438.02) which is currently uncommitted to fund this expenditure.