MD1653 Variation of the Development Agreement relating to Pontoon Dock

1.1 Following the outcome of a competitive procurement process in March 2015, the Mayor approved the recommendations to enter into an agreement with the preferred development partner to deliver the development objectives under MD14887 ‘Completion of legal agreements for the development of land at Pontoon Dock, Royal Docks’.

1.2 A record of Mayoral Decision made 30th March 2015 is as follows:
• Approved the recommendation to select Bouygues Development-Leadbitter Limited as the preferred bidder for the Pontoon Dock project;
• Approved GLA Land and Property Ltd’s entry into the development agreement with Bouygues Development-Leadbitter Limited;
• Delegated to the Executive Director of Housing & Land the authority to execute the development agreement with Bouygues Development-Leadbitter Limited and all ancillary documents necessary to facilitate the Pontoon Dock project.

2.1 The expected outcome of the land disposal remains a residential-led scheme of a high quality with a minimum requirement comprising a development of 211 residential units that incorporates a policy-compliant affordable housing provision and 10,000 sq ft of non-residential ground floor space. Under the key terms and conditions of the Development Agreement, Bouygues Development has committed to the delivery of a minimum of 137 homes for the Private Rented Sector (PRS).

2.2 Since entering into the Development Agreement, Bouygues have been required to make enhancements to the proposed scheme in order incorporate a new entrance to Thames Barrier Park.

2.3 Additionally, in response to a planning condition to carry out essential transport infrastructure DLR upgrade works, imposed under a section 106 agreement relating to another GLAP development scheme, Bouygues are entering into an additional Option Agreement (the terms of which are not considered in this Mayoral Decision) to surrender a small part of the land committed to them under the Development Agreement. Certain terms of the Development Agreement need to be varied with the Deed to deal with the effect of delays from the DLR upgrade works on Bouygues delivery of the scheme. These changes have been made at the request of GLAP, London Borough of Newham (LBN) and GLA/TFL planning.

2.4 To account for necessary changes which have had an impact on the viability of the scheme, approval is now sought to amend the terms in the original development agreement. This is in order to accommodate additional requirements enabling the delivery of an enhanced scheme development submitted for planning.

2.5 The Further background on the variation to the development agreement is within Part Two confidential facts and advice of the MD.

3.1 The scheme will need to be fully accessible and/or Disability Discrimination Act compliant in respect of wheelchair accessible housing for the development and public realm. The developer has been subject to a pre-application process and has submitted a detailed planning application to ensure that the proposed scheme has addressed the requirements.

A) Key Risks and Issues:

4.2 B) Links to Mayoral Strategies: The Mayor has publically expressed a desire to encourage institutional investment in the Private Rented Sector (PRS) as a way to increase the supply and choice of housing in the capital. The Mayor’s Housing Strategy sets out that, where appropriate, the Mayor of London shall seek to use land assets to encourage institutional investment in the private rented sector and improvements in the design and management of this tenure.

5.1 See Part Two confidential facts and advice of the MD.

6.1 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.

6.2 Sections 1 and 2 of this report indicate that the Mayor has the power to proceed to make the decisions as requested within this report.

8.1 Following the approval of Mayor, on the basis of the financial information submitted to GLAP and the necessary legal and procurement advice, officers will make the necessary alterations to the development agreement and contract with the development partner.

8.2 The next steps following approval by the Mayor are summarised below: