LONDON BOROUGH OF BARNET (BRENT CROSS CRICKLEWOOD) COMPULSORY PURCHASE ORDER (N 3) 2016 SUMMARY STATEMENT OF EVIDENCE ANDRÉ GIBBS Chief Operating Officer BXS DM Limited 11 August 2017
1. Qualifications, Experience and Scope of Evidence 1.1 My name is André Gibbs. I am a Member of the Institution of Structural Engineers and a Chartered Engineer. I am a Partner at Argent (Property Development) Services LLP ( Argent ), the Chief Operating Officer of BXS DM Limited (the Development Manager ) and a director of BXS GP Limited, the general partner of BXS Limited Partnership ( BXS LP ) and AR BXS Limited. (Please see the summary ownership structure chart in Appendix D of my statement of evidence.) 2. Scope of Evidence 2.1 I will provide evidence on behalf of BXS DM Limited in its role as Development Manager for BXS LP. I will also provide evidence of Argent Related s combined experience, commitment and ability to fund the delivery of the CPO3 Development (and BXS). 2.2 My evidence principally pertains to the Station District component of the CPO3 Development. 3. Argent, Related, the Argent Related Limited Partnership and BXS LP Argent 3.1 Argent is one of the UK s leading privately owned property companies. Its principal activity is the provision of development and asset management services to property related projects. Argent and its senior management team also directly invest in most of the projects that Argent brings forward. 3.2 In Birmingham, Manchester and at King s Cross Central, London, Argent has been successfully engaged on some of the most significant mixed-use redevelopment projects in the United Kingdom. Related Companies ( Related ) 3.3 Related is one of the leading privately-owned real estate firms in the United States. Related has experience in virtually every aspect of development, including, acquisitions, management, finance, marketing and sales. 3.4 With headquarters in New York City, Related focuses its development activities in gateway cities in the US and internationally, including, Boston, Chicago, Los Angeles and Shanghai. For some time, Related has been keen to expand its operations into London as the key gateway city in Europe. Argent Related Limited Partnership 3.5 Argent Related Limited Partnership is a new partnership between Argent and Related established on 2 March 2016 and Argent Related (General Partner) LLP was 1 P a g e
incorporated on 29 February 2016. The partnership draws on the experience and funding track record of both Argent and Related. Brent Cross South Limited Partnership 3.6 Argent Related and the London Borough of Barnet entered into a joint venture and associated project documentation in July 2016 to establish the Brent Cross South Limited Partnership ( BXS LP ) which will bring forward the Station District of the CPO3 Development and BXS. 4. The Brent Cross South Opportunity and Argent Related s Involvement 4.1 Our vision is to deliver a significant, new town centre for London which will benefit from new, high quality, curated public realm, infrastructure and buildings. BXS LP aims to set a new benchmark for how outer London can contribute to London s growth. 4.2 Since March 2015, Argent Related (and since its formation, BXS LP) has undertaken a huge amount of work to seek to ensure delivery of BXS, including, working closely with both the CPO1 Development Partners and the Council s Thameslink Station team, as well as preparing and submitting a number of applications pursuant to the s.73 Permission. Delivery of the Station District and the Need for the Station District Land within the Order 4.3 The Station District component of the CPO3 Development is presently occupied by Cemex and Solum and forms a key development site within BXS, located adjacent to the proposed eastern access to the new Thameslink Station and framing the south eastern edge of the proposed Station Square and Transport Interchange T1. 4.4 Commercial (predominantly office and workspace) uses are proposed to be clustered around Station Square where most employers of a significant scale are likely to want to be based. It will offer excellent transport connectivity to both the employee and customer catchment area and will benefit from multiple travel modes. The new station will drive take up of both residential and commercial floorspace. Our programme for delivery of buildings in the Station Quarter is therefore linked to the programme for delivery and opening of the station. 4.5 The delivery of a new Thameslink Station is a key ingredient to the success of BXS. The train services to be provided by the new station commencing in May 2022 are very important to the wider opportunity at BXS and the delivery of the regeneration objectives. Furthermore the new station will lower the requirement for car parking, keeping build costs lower, increasing the ability to reach the widest possible range of potential home buyers and renters. It is estimated that as many as 20,000 people could be working at BXS when the project is complete. 2 P a g e
4.6 By starting development within the Station District on planning Plots 19 and 20, a new building (or buildings) could be constructed without impacting on the logistic and delivery programmes of the various Station projects. As a prominent site with the potential to have real presence, it would help to confirm the establishment of the new place as a highly attractive employment location, drive use of the Station and help frame the new square. 4.7 Under the joint venture project agreement, BXS LP is responsible for delivering the enclosure building for the eastern access to the new Thameslink station and the transport interchange TI (part of the proposed Station Square). The station and its eastern access will be a very important gateway to the BXS site, as well as providing excellent transport connections to central London and beyond. BXS LP is also responsible for delivering an interim transport interchange (an appropriate proportion of the final TI interchange) to meet anticipated demand at the time the new station opens. In addition, as part of delivery of the Station District and the Brent Terrace development zone, we will seek Reserved Matters approval for Spine Road North, one of the principal connections from the A5 in the west, to the Brent Cross shopping centre in the north via a new bridge over the Midland Mainline railway. 4.8 The eastern entrance to the station, the interim transport interchange and Claremont Park Road (Part 2) will be delivered by BXS LP to ensure delivery coincides with delivery of the station and station opening in 2022. We anticipate making applications for reserved matters approval towards the end of 2018/early 2019. 4.9 As with other areas of BXS, we are undertaking work to interrogate the illustrative masterplan for the Station District within the Order Land. Planning Plots within the Order Land formed part of a plot testing exercise referred to in my evidence, which will inform detailed design work going forward. 4.10 As noted in my evidence, we have submitted a re-phasing application to seek to bring forward plots within Market Quarter on land fronting Claremont Park earlier in the programme (CD/C21 26). The re-scoped Phases 1AS, 1BS and 1C will deliver the initial core of development, including replacement homes for the Whitefield Estate (Part 2). Similarly, in due course and in response to the Council s re-phasing (CD/C27-32), we propose to prepare and submit a further re-phasing application to seek to bring forward planning Plots 19 and 20 from Phase 5 and to re-focus Phase 2 around the proposed new station to address its proposed earlier delivery, connecting the new station to our initial core of development within Market Quarter. We believe that our placemaking experience and strategy (as outlined in my evidence) will contribute towards creating interest and building confidence in this new location. 3 P a g e
4.11 I am entirely satisfied that the s.73 Permission, its parameters and its flexibility provide the foundation for a successful regeneration scheme that will bring with it social, environmental and economic benefits. 5 Funding and Delivery 5.1 My statement of evidence demonstrates how the financial strength of Argent Related and Related means there is no impediment to funding the scheme. The Station District element of the CPO3 Development (and BXS) can be funded, is viable and is expected to remain viable. 5.2 Both Argent and Related have strong funding track records and good relationships with major lenders. Funding has come from a combination of banks, institutions and pension funds, sovereign wealth funds, in addition to core equity. A summary of our respective fund raising experience from such sources is included within my statement of evidence (and Appendix A of my statement of evidence). The Joint Venture Agreements 5.3 The Project Agreement and associated Development Management and Infrastructure Agreement ( DMIDA ) were agreed in July 2016 (CD/E7). The DMIDA includes a guarantee from Related of BXS DM Limited s obligations. BXS DM Limited will be the development manager procuring delivery of serviced development plots. The Council will invest their existing land into the project in return for future land receipts and sharing in surpluses. 5.4 BXS LP submitted the first phase proposal to the Council on 30 June for approval, and it was subsequently approved by the Council s Assets, Regeneration and Growth Committee on 24 th July 2017 (CD/E9). The document sets out the details of the proposed development within the first phase, including, floorspace, uses, infrastructure and public realm, together with the proposed timetable for development. The first phase proposal comprises planning phases 1AS, 1BS and 1C together with part of planning Phase 2. 5.5 BXS LP has developed a business plan which sets out the mechanisms for delivering a great place through commercially viable phased development. An updated business plan (2017) for delivering BXS over the next 15 20 years has been submitted to the Council. The executive summary of the business plan is attached at Appendix 1 of the Committee report dated 24 July 2017 (CD/E9). 5.6 As I explain in my statement of evidence, the Project Agreement includes conditions precedent which I am confident will be met. 4 P a g e
Funding Land Acquisitions and Land Assembly 5.7 The Council is leading land negotiations with Network Rail. BXS LP will be responsible for funding the remaining land acquisitions within the CPO3 Order Land where the freehold interest has not been secured by the Council by private treaty. Related is to provide (through the CPO3 Indemnity Agreement, to be agreed) a guarantee of BXS LP s indemnity of and obligation to pay the Council s relevant costs associated with CPO3, including land acquisition costs. 5.8 The Council is likely to retain the freehold of the land acquired. BXS DM Limited will be granted a licence to enable access and delivery of infrastructure. Once serviced plots have been created, a special purpose vehicle company or partnership will be granted a long lease to enable the construction of buildings. Funding Infrastructure and Master Developer Costs 5.9 BXS DM Limited will be responsible for implementing the funding strategy which will include a combination of core equity, external investment and bank debt. Argent and Related are experts in raising capital for development. Our extensive network of funders include institutional investors, pension funds, private clients, private equity funds, listed vehicles, sovereign wealth funds and banks. 5.10 I am confident that the quantum, levels of return and respective risk profiles of the investment will attract many investors at competitive rates. Funding Plot Construction Costs 5.11 Plot development costs will be predominantly funded by third party debt raised by the relevant plot special purpose vehicle, and secured against the land comprising the plot. Equity will be used to supplement debt, where appropriate. 5.12 I currently anticipate that all of the development plots in the CPO3 Order Land will be brought forward by Argent Related SPVs. I do not anticipate that raising equity or debt will be an impediment to plot development. Related Companies LP Corporate Financial Strength 5.13 Related has excellent financial strength, having successfully developed over $30 billion in projects. Related owns approximately $50 billion in assets, carefully manages its balance sheet and maintains ample liquidity to meet its obligations and growth prospects. 6 Land negotiations 6.1 As explained in my statement, Argent Related, acting on behalf of BXS LP, has been supporting negotiations for certain land interests, such as Cemex and NRIL. The intention has been to ensure that solutions are found that will enable the 5 P a g e
regeneration of the area to proceed, while at all times endeavouring to secure land through agreement. 7 Response to Objections 7.1 I provide responses to objections from Cemex, Gina Emmanuel, Galabina Yordanova and John Cox in section 7 of my statement. The objections do not identify any reasons why CPO3 should not be confirmed. 8 Conclusions 8.1 I have considered the case for CPO3 in the context of the matters set out in the CPO Guidance (CD/A10) that are relevant to my evidence and conclude that there are no physical or legal impediments to delivery. 8.2 The s.73 Permission creates a clear framework for the use of the land. Although we are proposing to re-phase some plots, the overall use of and need for the land remains as described within the s.73 Permission. Simon Slatford provides evidence that proposed changes can be delivered through the planning system. 8.3 I conclude in my statement that it is clear that without ownership and control of the CPO3 Order Land, it will not be possible to achieve the comprehensive and integrated regeneration of the area. 8.4 In my statement of evidence, I have detailed the funding that Argent Related and BXS LP have available: I am confident that the necessary funding will be available to acquire the land and deliver the CPO3 Development within a reasonable timescale. In addition, the legal arrangements, in the form of the joint venture agreements, are in place. 8.5 I believe that the work and expenditure we have incurred to date, both in entering into the joint venture and in interrogating the indicative masterplan and progressing the design of the first buildings, indicates the level of our commitment to delivering this important project. To date, we have invested approximately 15m with total investment before a substantive start on site, likely to exceed 25m. The resources are available to cover this investment. 8.6 I am entirely satisfied that the s.73 Permission, its parameters and its flexibility provide the foundation for a successful regeneration scheme that will bring with it social, environmental and economic benefits. It is critical that CPO3 is confirmed as soon as possible to allow BXS LP to work towards the targeted start on site of 2018 and commencement of this important regeneration scheme. 6 P a g e