Some may view housing minister Dominic Raab’s comments on Earls Court this week as a potentially fatal attack on Capital & Counties’ plans for the west London site.
I believe Raab has handed Capco a convenient escape route out of the sorry mess.
As we revealed earlier this week, Raab has dropped a heavy hint that he is on the side of Earls Court residents in their long-running battle against Capco to save their homes in the heart of the £12bn scheme from demolition.
During a meeting with local MPs, councillors and protesters at the Houses of Parliament on Tuesday, Raab said developers should have the “majority support” of residents for their regeneration plans – something those who attended Property Week’s Regenerate conference at U+I’s offices in Victoria on Tuesday know all too well. But that’s something Capco has never had.
The company has been fighting a bitter battle with the residents of the West Kensington and Gibbs Green estates since buying the site eight years ago, a battle it is losing. Instead of continuing to fight, Capco should see Raab’s hint that the government will make life even more difficult for it if it continues as an opportunity to finally rid itself of this impossible project.
In the past two years, the site’s value has plummeted by £400m to £1bn. Sales of the scheme’s upmarket apartments have almost ground to a halt from what was an already paltry one a week to just one a month. And last week, Capco confirmed Property Week’s story that it was in talks to sell the Empress State Building to the mayor of London’s office for £240m, in a move that many believe will lead to the eventual sell-off of the entire site.
I understand Hammersmith & Fulham chief Stephen Cowan has written to Capco offering to pay back the £70m the council received for the estates and take the homes back under his control. Capco should bite Cowan’s hand off and give the estates back, finalise the deal to sell Empress State and then get to work on offloading the rest of this troublesome project.
But who would buy a scheme mired in controversy and political manoeuvring? Capco needs to find someone who does not care about the protesters. Indeed, perhaps it already has – Saudi investment giant The Olayan Group. If I were Capco’s boss Ian Hawksworth, who has done more than many developers would have to take the residents’ concerns on board and come up with an improved masterplan, I would be doing everything I could to persuade the Saudis of the scheme’s merits.
A Pyrrhic victory?
As for the protesters, they may well score a victory in the short term by ousting Capco, but do they really believe an investor like Olayan would give two hoots for what they think?
With Earls Court off its hands Capco’s future could look bright again. Taking the escape route offered to it now could open up all kinds of opportunities. I am sure it would not be long before someone suggested a merger with Capco’s Covent Garden neighbours at Shaftesbury to create a £5bn-plus London property powerhouse, for instance.
Oh, it appears I just did.