MD1552 London & Partners – Regeneration Funding

1.1 London and Partners (L&P) have been tasked with attracting investment into regeneration and development projects in Mayoral priority locations. L&Ps objective is to generate interest and confidence in the London market and introduce new players. L&P would like to continue their appointment of development specialists to aid this work.

1.2 L&Ps annual (2015-16) programme budget for this work is £162,000 (excluding VAT) which is a combination of salary costs from L&Ps Trade and Investment Budget and the grant from GLA requested in this Mayoral Decision (£50,000 for 2015-16 and £50,000 for 2016-17). L&P will fund 69% of the annual programme costs for this work and the GLA will fund 31%. These are actual costs based on the procurement exercise described in 1.5 below.

1.3 The GLA funding is a contribution towards the cost of appointing L&Ps development specialists until March 2017. The GLA grant will help fund the development of a portfolio of projects to market internationally, manage relationships with interested investors and support the attraction of investment into London development projects (more details in Section 2). This will enable L&P to deliver against the regeneration targets in their 2015-16 and 2016-17 business plans.

1.4 The GLA has previously contributed towards the cost of development specialist secondees at L&P and Jones Lang LaSalle (JLL) was appointed. Director Decision DD1144 approved the GLA contribution of £80,000 grant to cover the costs of JLL until March 2014.

1.5 In March 2015 L&P wrote to all the major real estate and development consultancy providers in London asking them if they were interested in providing the service to L&P/GLA and only JLL responded. JLL have performed well in their role and will be retained.

1.6 The GLA has tasked L&P with promoting regeneration and development opportunities in priority areas for the Mayor. To achieve this it is recognised that work is needed with potential investors to understand their requirements and put forward projects to encourage investment. These opportunities would need to be sourced from close working relationships with landowners in the public and private sector, as well as developers and investors that are active in the London market. These opportunities would then be marketed through L&Ps London Investment Opportunities Booklet in a way that promotes the case for investing into the London market.

1.7 The appointment of a development specialist will fill a skills gap in terms of being able to interpret the GLAs investment priorities into commercially viable and market ready investment propositions in regeneration and development. In conjunction with L&Ps sales teams, these projects will then need to be presented to potential investors to drive interest in the London market. Neither GLA nor L&P have this commercial real estate and development expertise in-house.

1.8 For 2014/15, £1.27m of regeneration wins (based on residential land value) have been recorded by L&P. The following investment activity has been recorded since 2012-13:

1.9 The Director Decision DD1144 stated that L&P were planning to make the work part of their core work in future years and would fund this centrally. This approval will cover a continued, but smaller, contribution in recognition of this important ongoing work marketing investment opportunities in regeneration, development and infrastructure in London.

1.10 For future years, the Investment and Performance Board meeting on 10 December “agreed the necessity to have a single funding pot with London & Partners from which all projects were delivered – as opposed to some in-year items being charged on top of the core grant .’’

2.1 The development specialists, working with L&P, will:

• Continue to develop a portfolio of projects in conjunction with the development community, GLA group and the London Boroughs and market them internationally.
• Continue to manage the relationships with interested investors – introducing them to development opportunities and other partners – to deliver investment into London regeneration and development projects.
• Be the docking point on behalf of GLA/L&P on UKTI and return on investment for regeneration and development issues
• Deliver the L&P elements of MIPIM as partner of the wider London Family presence
• Support the attraction of investment into at least 2 regeneration and development projects, as per L&Ps business plan objective
• Provide support until March 2017

3.1 L&P’s work will seek to attract investment in the infrastructure and regeneration that Londoners need, and to maximise the benefits from this investment. Investment decisions will be made with due regard to their impact on all Londoners.

Links to Mayoral priorities

4.1 The marketing of London’s investment opportunities is in line with the objective in the Mayor’s Economic Development Strategy to promote and attract investment in the infrastructure and regeneration which London needs, and to maximise the benefits from this investment.

4.2 This work aligns with the Housing and Land priority to accelerate the pace of land released for housing and development, and the target to deliver more than 42,000 homes a year in the London Housing Strategy.

4.3 This work also aligns with the Government and International Relations priority to create jobs and growth through organising and delivering the Mayor’s international visits.

Impact assessment and consultations

4.4 L&P will liaise with senior GLA staff to ensure alignment with Mayoral priorities and plans.

4.5 Key Risks and Issues

5.1 The expenditure of up to £100,000 to grant fund London and Partners to continue the appointment of two secondees from Jones Lang LaSalle (JLL) will be funded from the Development, Enterprise and Environment 2015-16 and 2016-17 Directorate Minor Programme Budget.

5.2 The funding will be split equally between the two years.

6.1 Sections 1 – 4 of this report indicate that:

6.1.1 the decisions requested of the Mayor (in accordance with the GLA’s Contracts and Funding Code) fall within the GLA’s statutory powers to do such things considered to further or which are facilitative of, conducive or incidental to the promotion of economic development and wealth creation in Greater London; and

6.1.2 in formulating the proposals in respect of which a decision is sought officers have complied with the Authority’s related statutory duties to:

• pay due regard to the principle that there should be equality of opportunity for all people (further details on equalities are set out in section 3 above) and to the duty under section 149 of the 2010 Act to have due regard to the need to eliminate unlawful discrimination, harassment and victimisation as well as to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not ;

• consider how the proposals will promote the improvement of health of persons, health inequalities betweens persons and to contribute towards the achievement of sustainable development in the United Kingdom; and

• consult with appropriate bodies.

6.2 Section 1 above indicates that the contribution of £100,000 to L&P amounts to the provision of grant funding and not payment for services. Officers must ensure that the funding is distributed fairly, transparently, in accordance with the GLA’s equalities and in manner which affords value for money in accordance with the Contracts and Funding Code.

Officers must ensure that an appropriate funding agreement is put in place between and executed by the GLA and recipient before any commitment to fund is made.

7.1 It is proposed that this role continues to be filled by a JLL director 2 days a week with 2 days of support from the secondment of an associate within their team. Both will be retained until March 2016.