John Laing and Croydon Borough Council have today formally signed a partnership to create a £450m local asset backed vehicle to regenerate significant sites across Croydon town centre and develop a council headquarters.
Croydon was the first UK borough to pioneer this model of public private urban regeneration partnership in which Croydon Council will invest land and John Laing equity.
In a limited liability partnership, the council will receive a 50/50 share in profits and will maintain ongoing control of its extensive regeneration agenda by retaining an interest as a partner-landowner as well as through using its planning powers.
The 25-year partnership will provide the phased regeneration of four Town Centre sites with the creation of two 40-storey towers with around 650 residential units; a combination of both private and affordable accommodation.
In total the four sites will create around 1,250 new residential units, to be delivered between 2012 and 2017.
The project also includes the development of a 240,000 sq ft headquarters office building at Fell Road for the council.
The partnership said that it ‘is anticipated that the council's land value and share of development profit will be sufficient to pay for the building and its running costs for many years’.
The council has already exchanged contracts to purchase Davis House, which adjoins the Fell Road site, from Highcross.
In the short term, the vacant space in the building will be used for short term ‘decant’ space. In the medium term, it will form part of the regeneration of a larger block.
In addition almost 20,000 sq ft of retail space will be created. With the council's long-term regeneration strategy, the partnership also have the option to add additional sites into the partnership as and when further development is required over the next 25 years.
The council said that ‘as part of Croydon Council's regeneration aspirations, the urban regeneration vehicle (URV) will deliver sustainable facilities to benefit the entire community supporting its ambitions to become London's third city; the hub of living, retail, culture and business in south London and south east England’.
It is a coup to complete this public-private partnership at a time of great uncertainty for the property market and at a time when other major regeneration schemes and vehicles are faltering because of a lack of finance.
Jamie Kerr, managing director at John Laing Projects & Developments, said: 'Today, more than ever, the public sector is looking for innovation from commercial partners to help maximise returns from their assets.
'Croydon Council is leading the way and we are delighted to be working with them in developing this unique model that will deliver new infrastructure and significant regeneration to the local communities it serves.'
Councillor Tim Pollard, Croydon Council's cabinet member for regeneration and economic development, said: The creation of the URV paves the way for John Laing to support us in delivering our strategic regeneration plans over the coming years.'
Chris Pratt, managing director at King Sturge Financial Services, said: 'This is a complex deal achieved in difficult market conditions and the first of its kind completed by a local authority, it will hopefully provide the blueprint for the many council's that are facing similar challenges.'
King Sturge and Eversheds advised the Council. Knight Frank, Indigo, Grant Thornton and Denton Wilde Sapte advised John Laing.