CLS Holdings, a one-third partner in the Shard skyscraper development at London Bridge, issued a statement this afternoon, pointing out ‘some inaccuracies’ in a story that appeared this morning about a ‘bruising row’ breaking out at the scheme.
The Financial Times claimed that Simon Halabi was ‘incensed’ that partners Sellar Property Group (SPG) and CLS, the quoted property company, were trying to charge him £28m for project management fees on the Shard and the adjacent 600,000 sq ft (55,740 sq m) redevelopment of New London Bridge House, for which planning consent was recently obtained.
But CLS said the figure ‘covers a significantly wider brief and represents the combined development fees to be charged to the consortium by SPG and CLS in their roles as developers of the Shard and New London Bridge House’.
The FT also claimed that CLS and SPG paid Halabi £12m in an out-of-court settlement after the three partners narrowly avoided a legal battle a year ago over allegations from Halabi that the other two had watered down his stake. ‘That is not the case,’ said CLS. ‘In fact Halabi's Family Trust paid £3.2m to CLS and SPG to purchase a one-third interest in New London Bridge House.
‘It is believed that Halabi's trust may have been paid a substantial sum by his trustees' insurers. However, neither CLS nor SPG had any involvement in that arrangement and can therefore not confirm that this substantial payment has been made.’
The FT further claimed that Land Securities’ London head Mike Hussey had acted as an independent expert for Halabi and argued that the fees on the two projects - £20m for the Shard and £8m for New London Bridge House – were ‘excessive compared with market rates’.
But CLS said ‘the evidence of Mr Hussey on behalf of the Halabi Family Trust has been rejected by the London-based expert. Independent experts whose evidence has been submitted have fully substantiated the proposed development fees.’