MD1649 Floating village in Royal Victoria Dock

1.1 On the 12th March 2013 at MIPIM (international property event in Cannes) the Mayor of London with the support of the Mayor of Newham announced that he would be launching a competition to seek a development partner to deliver a floating village in Royal Victoria Dock.

1.2 The Floating Village will create a unique concept to London by establishing a floating, mixed-use community. The high quality residential led scheme will incorporate a genuine mix of commercial and leisure uses, with the objective of attracting more visitors to the area, increase visitor dwell time, create local jobs and raise the profile of the Royal Docks.

1.3 In May 2013 the GLA’s Investment and Performance Board (IPB) endorsed a disposal strategy for the site, which was approved by a Mayoral Decision No 1285. The recommended disposal option was to procure a development partner using the GLA’s London Development Panel (LDP).

1.4 Following a three stage procurement process in July 2014, the GLA’s Housing and Investment Group (HIG) endorsed the selection of the Igloo JV as the preferred development partner for the Floating village scheme. A further update on progressing the details of the development agreement was provided in December 2015,

1.5 The purpose of this decision paper is to set out the basis of the competitive procurement process undertaken, highlight the key commercial terms enshrined within the development agreement and gain a Mayoral Decision to proceed to enter into the development agreement and ancillary documentation allowing the Igloo JV to proceed with the development.

The Site

1.6 GLAP’s site is a 5ha area of water within Royal Victoria Dock which encompasses the dock bed and associated dock water space, the adjoining dock edges, and stepped false quay access known as the Corniche within the London Borough of Newham. It is located to the western end of Royal Victoria Dock close to the ExCeL Exhibition Arena and International Convention Centre.

1.7 The site is in easy reach of public transport connections of both Royal Victoria DLR and Custom House DLR stations and also the Emirates Airline. The anticipated arrival of the Custom House Crossrail Station during 2018 will provide access to central London, including a direct link to Liverpool Street station within 7mins, and a planned bus interchange to local destinations.

Disposal Strategy

1.8 Given the unique and innovative nature of this development, GLAP worked closely with the Royal Docks Management Authority (RoDMA) and the London Borough of Newham’s (LBN) during the procurement to ensure the objectives of the key stakeholders were represented.

1.9 The developer selection process was based on a three stage approach incorporating an Expression of Interest (EOI), Sifting Brief and Invitation to Tender (ITT). GLAP were advised during the process by legal and procurement advisors at different stages. The EOI was issued to all 25 members of the LDP in December 2013 and following receipt of EOIs the Sifting Brief was issued to all interested LDP members also in December 2013. The ITT was issued in February 2014 to the bidders shortlisted through the Sifting Brief evaluation and tenders were received by the prescribed deadline of 30th April 2014.

1.10 Igloo JV were recommended and endorsed by HIG in July 2014 on the basis that their bid represents the most economically advantageous tender using the evaluation criteria published in the ITT documentation.

1.11 The key commercial terms on which GLAP intends to contract with the Igloo JV was endorsed by HIG in December 2015 and are set out in the confidential part 2 of this MD.

1.12 RoDMA board has endorsed the proposal to surrender the 5 ha of the water which currently forms part of a 225 year lease from GLAP, in place to give RoDMA the right to manage the water, via a lease.

The RoDMA lease provides that where a surrender of the water area is sought, RoDMA can seek a premium. RoDMA will receive a percentage share of any development receipts (less all legitimate costs incurred by GLAP) received by GLAP (see part 2).

2.1 The project aims and objectives are to create a unique internationally recognised high quality mixed use floating visitor destination which achieves the following:

• The Place
Create an internationally recognised high quality, innovative and architecturally outstanding visitor destination;

• Mix of uses
Provide a vibrant and genuine mix of uses which provides homes, visitor attractions and amenities;

• The waterspace
The development must protect access to views across the waterspace and must also support active uses within the water body and retain the character of the docks;

• Long term management
Provisions of a high quality and efficient long-term management for the development to ensure the high quality appearance of the buildings are maintained together with the public spaces.

2.2 The expected outcome of the development is to provide a high quality residential led scheme which will incorporate a genuine mix of commercial and leisure uses which will attract more visitors to the area, increase visitor dwell time, create local jobs and raise the profile of the Royal Docks.

The minimum development will be 50 residential homes and 25,000 sq m of non-residential floorspace. Under the key terms and conditions of this appointment the developer shall:

• Enter into a Development Agreement (DA) based on a standard form, and a Head Lease. The development agreement is conditional on the delivery partner securing a planning permission (which is subject to the approval of GLAP) and will need to provide evidence of funding delivery;

• Submit a planning application within:
Submission Target Date: 10 months from the date of the Development Agreement
Submission Longstop Date: 20 months from the date of the Development Agreement

• Pay a guaranteed minimum land value (net of all costs) on the basis of the financial offer, submitted as part of Igloo JV’s bid, on completion of the scheme or on the longstop date.

3.1 The public spaces and non-commercial areas of the scheme will be fully accessible and DDA Compliant together with a number of the residential units determined by the planning permission. The proposal will meet this requirement and will be addressed in more detail as the detailed design progresses.

4.1 Key risk and issues:

5.1 Finance comments are in part 2 of this paper.

6.1 GLAP has and is being advised by Eversheds throughout this project including in relation to the fine tuning of the development agreement and other scheme documents.
6.2 Section 30 of the Greater London Authority Act 1999 (as amended) (GLA Act) gives the Mayor a general power to do anything which he considers will further one or more of the principal purposes of the GLA as set out in section 30(2) which are:
i. Promoting economic development and wealth creation in Greater London;
ii. Promoting social development in Greater London; and
iii. Promoting the improvement of the environment in Greater London
and, in formulating the proposals in respect of which a decision is sought, officers confirm they have complied with the GLA’s related statutory duties to:
• pay due regard to the principle that there should be equality of opportunity for all people;
• consider how the proposals will promote the improvement of health of persons in Greater London, promote the reduction of health inequalities between persons living in Greater London, contribute towards the achievement of sustainable development in the United Kingdom and contribute towards the mitigation of or adaptation to climate change in the United Kingdom; and
• consult with appropriate bodies.
6.3 Sections 1 and 2 of this part 1 indicate that the Mayor has the power to proceed to make the decisions as requested within this report.

8.1 The next steps are summarised below:

Appendix 1 – Red line boundary plan of the site