Hammersfield – the “Croydon Partnership” formed between shopping mall developers Hammerson and Westfield – will pay out around £50 million to buy-out the irritatingly persistent minority owners of the freehold and managers of the Whitgift Centre, whose legal challenges and objections were threatening to delay further the redevelopment scheme for the centre of the town. The #CroydonTakeover nears completion.
Even their choice of name was felt by some to be deliberately confusing – “the Whitgift Trust”, a body which is controlled by the Anglo Irish Bank – since they had no connection with the majority freeholders, the Whitgift Foundation.
The Whitgift Trust had become an increasingly expensive thorn in the side of Hammersfield and the Foundation, and ultimately of Croydon Council Tax-payers.
Who owns what: The land on which the Whitgift Centre is built is owned by the Whitgift Foundation, which runs the borough’s charity almshouses and its three large private schools. For a hefty sum of money, the Foundation granted a lease to Royal London Asset Management, who in turn granted a sub-lease to the Whitgift Trust. The sub-lease included responsibility for the day-to-day management of the centre.
It was the Whitgift Foundation who appointed Westfield to redevelop the shopping centre, after the leaseholders, including what was to become the Whitgift Trust, had already chosen to work with Hammerson. Only intervention in 2013 by London Mayor Boris Johnson brought Westfield and Hammerson together in a marriage of convenience. The Croydon Partnership was formed.
In 2014, the Partnership bought out Royal London Asset Management. But the Whitgift Trust refused to sell, clearly thinking they could get a better deal as the Hammersfield/Partnership was anxious to get on with its development. At considerable public expense, Croydon Council, then under Conservative control, issued a Compulsory Purchase Order to try to force the Trust to sell.
A costly public inquiry into the CPO has only just finished. That the buy-out deal has gone through at this time, within a couple of weeks of the end of the inquiry and after the Trust’s challenge in the High Court ended in failure suggests that they have finally decided that taking whatever cash was on the table was the best exit strategy.
None of the parties involved in the deal are revealing the amount paid. Sources in the property business suggest that ridding themselves of the Trust’s nagging presence could have cost around £50 million. Had the offer to buy-out the Trust come a year or 18 months ago, much legal angst, and expense, might have been avoided. And Croydon would have been spared the CPO experience.
As it is, all estimates of when the CPO report will be published have now slipped to “the autumn”, rather than early this summer, making any starting date on the £1 billion redevelopment more likely to be 2016. So the prospect of opening of the new supermall increasingly unlikely to happen before 2020.
In a statement issued to the stock market on Wednesday, Hammerson said,
This transaction gives the Partnership ownership of the shopping centre, alongside its freehold owner, the Whitgift Foundation, and direct management control. The Whitgift Foundation is wholly supportive of the Partnership’s wider 2 million sq ft vision to transform the retail town centre.
The Croydon Partnership now owns or controls a majority of the major land interests required for the proposed development. It will assume all management responsibilities for the centre going forward.
The completion of this transaction follows the conclusion of the Compulsory Purchase Order Inquiry (“CPO”), which closed on Friday March 13. The result of the inquiry is expected to be confirmed by the Secretary of State around autumn this year.
The Croydon Partnership will continue to negotiate for the remaining land interests and rights and will work closely with the Council and local community to ensure that the wider project brings maximum benefits to the Borough.
Peter Cole, chief investment officer at Hammerson, said: “This purchase represents a significant step forward in our plans to redevelop Croydon’s retail centre. We have been working hard with all parties to purchase ownerships that are integral to advancing our scheme, and clearly securing the controlling interest in the Whitgift Centre, amongst other key land acquisitions, is a hugely important part of the jigsaw. We can now take an active role in the management of the centre prior to the start of physical redevelopment, which is enormously beneficial to the whole process.”
With the Whitgift Trust removed from the picture, it means that the last body with the financial clout to challenge the Hammersfield scheme no longer has a direct interest. The way seems clear for what the Glee Club has brashly and triumphantly called “the #CroydonTakeover”.
Certainly, Tony Newman, the Labour leader of Croydon Council, Toni Letts – the council cabinet member who also happens to be a member of the Whitgift Foundation board – and the rest of the borough’s Establishment will not be speaking up at any time soon for the interests of small, independent businesses or residents affected by the development.
Look at what Newman’s deputy, Alison Butler, said on Wednesday: “This is great news for Croydon and represents a significant step forward in the regeneration of the town centre.” Ooo. Isn’t that almost the same thing as the developer said?
To its credit, the Whitgift Trust was the only body which outed Tory MP Gavin Barwell for his flagrant conflict of interest, being Croydon Central’s elected representative but also holding a seat on the board of the Whitgift Foundation.
And what was gaffe-prone Gav saying on Wednesday? “It’s really good news. If all goes well, the last obstacles to work starting should be out of the way in a few months’ time.
“I have worked hard behind the scenes to get us to this point and I am delighted by today’s news. I hope you are too,” Barwell said, in an email sent from his parliamentary email address.
For once, Barwell actually did declare his interest as a governor of the Whitgift Foundation.
Odd, though, how after four years of being badgered on the matter, he has remembered how to conduct himself properly in this regard only on the eve of an election.
He remains the Glee Club’s cheerleader-in-chief. He is still boasting of undertaking unspecified negotiations “behind the scenes” on the deal – though it remains unclear whether he did so as a Tory MP for the area or on behalf of the Whitgift Foundation. It doesn’t seem to occur to Gav that the interests of the landowning Whitgift Foundation and their billionaire developer chums may not always coincide with the broader interests of residents and business owners in Croydon.
Barwell has convinced himself that everyone in Croydon is bowled over by the scheme he has spent so much time brokering and promoting. He claims to have had only two emails from constituents raising questions or objections to the scheme, and so says that “99 per cent” of Croydon is supporting it. It’s the sort of justification last heard from Kim Jung-un’s North Korea, where no opposition is ever tolerated.
It is just the latest example of gaffe-prone Gav having trouble with numbers.
Yesterday was end-of-term at the House of Commons for (probable) one-term MP Barwell, where as a Tory Government whip, it was the job of him and his mate, Michael Gove, to deliver up enough votes so that they could get rid of John Bercow as the Speaker of the House. Despite having a majority of MPs from the 2010 election, the underhand move – “masterminded” by William Hague – failed, as a couple of dozen Tory MPs with some backbone and independent minds, plus some LibDems and the Labour group voted down the sly motion.
For a while during the subsequent debate, Barwell was allowed to sit on the Tory front bench, usually the preserve of Government ministers. As the session ended, Barwell hung around near the Dispatch Box, waiting for a chance to speak to the former Tory Party leader, perhaps to apologise for the embarrassing failure to whip up enough support for the earlier vote. Barwell cut a lonely, distanced figure.
Perhaps, from May 8, Barwell will have more time on his hands to lobby on behalf of Westfield and the Whitgift Foundation. But will anyone be able to tell the difference?
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