Southwark Notes email Inbox is usually full of foreign ex-president’s of national banks trying to get us to take their millions for them or offers to enlarge the size of our website and so on. Occasionally we get some fan mail or requests for interviews. So this Saturday 2nd February we were pretty stunned when an email from Dill Valentine (?) entitled ‘Elephant and Castle regeneration‘ landed there with some intriguing looking attachments. Hmm, what’s this we thought? A funny joke or some crazy spam?
Dear Southwark Notes,
We have chanced upon an easy way to read the redacted Regeneration Agreement between Lend Lease and Southwark Council. We think it throws up all sorts of questions. Please find a press release in continuation.
Concerned Southwark Residents
WE HAVE BEEN CALLING THIS A RIP-OFF FOR A LONG TIME
Of course, regular readers or other concerned residents will know that this refers to the Regeneration Agreement signed between Lend Lease and Southwark Council in July 2010 shortly after Labour took over control of the Council. Locally people campaigning on a whole range of issues that are controversial in the by-now infamous Elephant regeneration (lack of truly affordable housing, social cleansing, smaller leisure centre, removal of mature trees, lack of insight into pressure put on local services and amenities with 1000’s of new residents coming to the area, housing density, effect on local businesses and so on) have long been asking both in and out of the official Elephant Regeneration consultation programmes for access to this agreement to enable them to make up their own minds about whether the existing residents are getting a good deal or not. This request has always been refused or stalled with the be-all-and-end-all mantra ‘commercial sensitivity‘. Well, consulting people on a regeneration programme where no-one local is allowed to see the fine details is a bit of perfunctory and cynical exercise in Public Relations (as we have said many times).
Recently however as part of the Council’s Compulsory Purchase Attempt for the last remaining leaseholders on the Heygate Estate they stuck up a heavily blacked out version of the July 2010 Regeneration Agreement on the Council website: (see below!)
UPDATE: 9AM MONDAY FEBRUARY 4th 2012
Above link to blacked out Regeneration Agreement, now removed from Council website!
What follows is the rest of the email:
PRESS RELEASE 31.1.2013
>>>>>> Embargoed until Monday 9.00am 4th February 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:
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.
There is a certain irony in the secretive agreement coming to light only because someone did some lateral thinking and cut and pasted the blacked out text into a word processing document. Seeing how the agreement’s confidentiality is referred to in the document itself –
‘33.2.3 keep the Confidential Information and any copies of it secure and in such a way as to prevent unauthorised access by any third party;
33.2.5 inform the other party immediately if it becomes aware that Confidential Information has been disclosed to or come to the knowledge of an unauthorised third party’
there is the prospect of some real ticking off of the poor way in which the blacked out document was blacked out!
This is only really a side story though. More importantly, this is one document that begins to paint a clearer picture of what the regeneration deal at The Elephant really is. We would not comment on our analysis of the document and it’s financial information yet as the mind boggles when you try and read over 100 pages of legal speak so it may take us some time to fully comprehend it. Our question for now is how will both The Council and Lend Lease respond to this total muck up? And what does it mean for campaigners in the long fight so far for benefits for local people in any regeneration scheme?
With the first detailed planning application up before the Planning Committee this Tuesday 5th February seeking to build 235 mostly private or unaffordable homes on the old Heygate Site at Rodney Rd, we wonder what the Committee would make of the detailed financial agreements made in the Regeneration Agreement? Is this scheme really in the interests of Southwark residents? We hope they will be asking these questions and not sitting mutely as a few of them were on the 15th January Planning Meeting. These are representatives of local people tasked to serve those people’s interests by those people!
We immediately emailed Dill Valentine back but so far no response. We will keep you posted.
THE ELEPHANT NEVER FORGETS
The message from the recently Council approved Lend Lease’s Outline Masterplan for the area is that The Council are selling the Elephant area short by millions to allow a minimal amount of really affordable housing. Just to add more insanity to this and the Council’s own leak of the Agreement we would like to remind our readers of Leader of The Council’s Peter John thoughts on the Elephant regeneration plans three days before he took power in May 2010:
“”We want a deal signed and we want it signed sooner rather than later.
That is not at the expense of all the community facilities we were promised right at the outset. The heads of terms which were signed in November with Lend Lease didn’t include a leisure centre, they didn’t include a library, they didn’t include any of the community facilities we would have expected to have seen.
It was an agreement to build houses – and private houses at that. That’s simply not good enough.
If we’re going to redevelop the Elephant it has to include social housing as well as private housing, it has to include those vital community facilities and it has to have a shopping centre which people will want to go to.
At the moment there is no plan to deal with the shopping centre and what phase that will be within the whole regeneration structure.”
Oh Peter, what is finally in the deal you signed with Lend Lease two years ago? A reduced Leisure Centre that is only part of the deal because Lend Lease were given the sweetener of some prime SE1 land by The Tabernace to build a 40+ storey tower of luxury flats and no affordable housing (“That’s simply not good enough.“); no new library; no real ‘vital‘ community facilities to be worthy of the name; a refurbished shopping centre that seeks to include more private housing on top of it…and a total climbdown on The Council’s own policy of minimum 35% affordable housing in big new developments!