BARRATT HOLMES, our housing correspondent, reports on how the council’s casino economics may have forced Brick by Brick to consider some sharp practice
Sources within the property business in south London suggest that the Fairfield Homes proposals being rushed through the council’s planning committee on Thursday may have already been touted to other developers, offering it for sale with planning permission granted. One describes the ploy as Brick by Brick “cashing in their chips” on a scheme that they can no longer afford to develop themselves.
The multi-million-pound project is a long-delayed scheme from Brick by Brick, who had to reconfigure their plans for the area between the Fairfield Halls and the London-to-Brighton railway after they failed to secure the purchase of a building from Croydon College.
Brick by Brick is the council-owned, loss-making housebuilder who, despite borrowing £260million-plus from Croydon Council, has managed to deliver just three purpose-built council homes in five years.
Failing to sell significant volumes of the homes they have built appears to have caused a mismatch between the company’s cash income and the money required to develop a large site such as at Fairfield. The Fairfield site also presents significant development problems, squeezed in next to one of the country’s busiest railway lines.
According to industry sources, construction projects adjacent to important transport links would usually be expected to provide infrastructure protection – in this case, effectively insuring Network Rail against the risk of an accident or damage caused to the Brighton mainline. Such protection can cost tens, if not hundreds, of millions of pounds.
“Given where we are today, with Brick by Brick’s existing borrowing and their poor sales, I very much doubt whether they can afford the build package for Fairfield Homes,” a source close to the matter told Inside Croydon.
“But if they have a site with planning permission that they can sell on, it would represent a quick-fix for some of their apparent difficulties,” the source said.
“The council’s gone in for casino economics by getting into the development business, and this would see Brick by Brick cashing in some of their chips.”
The scheme submitted to the council planning department has seen Brick by Brick double the number of housing units that they had originally intended to build, to 421. Yet only 69 of these homes are intended to be “affordable” – that’s 16 per cent, when Brick by Brick has a target of delivering 50 per cent affordable homes across all its new builds around the borough.
Having planning permission for such a large scheme with such a small proportion of affordable housing might appear attractive to some larger, better-run developers, who would usually have to include 35 per cent affordable homes in their London schemes.
The Fairfield Homes project has been valued as being worth between £120million and £180million – though all estimates are likely to undergo serious revaluation following the impact of the coronavirus lockdown on the economy.
What will not change any time soon is Brick by Brick’s need to generate some serious income, and quickly, and not from further loans from the council.
Revenues from the Fairfield Homes project were always supposed to cover the cost of refurbishment of the nearby Fairfield Halls, which Brick by Brick eventually delivered 15 months late and costing at least £43million – busting the budget by nearly 50 per cent.
The Fairfield Homes site may have been included on a list being circulated between London property agents in the past fortnight. It is being offered effectively with planning permission even before the council – Brick by Brick’s owners – have granted it planning permission. This may appear to be sharp business practice.
For a site to have planning permission, of course, usually provides an uplift in its value, sometimes worth many millions.
Certainly, Colm Lacey, the former council employee who was over-promoted to become the rookie chief exec of Brick by Brick, has been asked about the presence of the Croydon site on the developers’ list. He did not respond.
“There’s nothing unusual about land lists and it’s the means canny developers use to parcel development sites or book-end existing and proposed developments,” an industry source told Inside Croydon. “That’s what cut-throat property developers do, but until now, its been precisely what Brick by Brick doesn’t do.”
The source says that the list shows the land as being described as being in central Croydon and able to deliver “circa 500 residential units”, plus some commercial space.
“A typical mid-size development, yes, but it goes on to list expected developer financial obligations such as carbon offsetting and TfL contributions. You don’t normally know these figures until a planning application is at an advanced state.
“Is Colm Lacey trying to flog off the Croydon College site before he’s even got planning consent? Or is he making enquiries about selling it after consent? Is the council CEO Jo Negrini in on this too?
“This really ought to be raised as an urgent matter of business before the committee considers the proposals on Thursday.
“We’ve been talking about the changing nature of planning leading to the ‘marketisation’ of planning processes and ‘… indirect, even disingenuous, treatment of financial matters’. Has Brick by Brick taken this to a whole new level?
“If Bríck by Brick are using BLV, or Benchmark Land Value, to deal in their questionable developments pre-planning, in the knowledge that Paul Scott and his lackeys will wave it through with a planning permission – that’s a challenging matter for Croydon residents.”
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I’m critical of Brick-by-Brick because of how they have been assembled, their lack of accountability and to put it bluntly, what they’ve done at the Fairfield Halls and their inability to communicate with the communities they were appointed to deliver for.. As a company, they are frequently pushing at an open door but always seem to come stumbling into the room.
However, on this occasion I think the proposals for the Croydon College site are broadly the right ones. But for one reason only. Importantly the density is right and this is what is needed on these important, connected, inner city sites.
But density is not the only thing. With density must come excellent public realm- that is the only thing that separates then and now. The then is the socially polarised, the physically squalid and the environmentally destructive Croydon developments of yesterday.
This project should be an exemplar. But there are missed opportunities in not creating better designed physical and spatial linkages. When building in Croydon, this should be at the forefront of every decision you make. Improved public space is the answer to everything – you do that and the buildings follow. There is a simple direct correlation between the fundamental importance of improved public space and people’s quality of life.
The delivery of excellent connected public realm is not a product of a secret Design Review panel – there’s no debate or accountability there – suggest they be disbanded straight away.
What’s needed is a vision for a Croydon.
The Council lacks visible leadership and with that direction and focus. Who is our spokesperson for the City and Urbanism? Who has the big vision and is able to communicate it? This goes back to Croydon of old when nobody in the Council had the presence and the vision to understand the problem, and fewer still had the skills to make a difference. We are still suffering from this deficit now.
Strikes me as Croydon Council want their own little property development company that isn’t accountable to anybody.
Nice work if you can get it…..
And when it all goes wrong Bank of Croydon Residents picks up the pieces. Do you know the council employee who heads Brick etc is paid over £100,000!!!! And he’s a personal friend of Jo Negrini !
Can’t say that I knew about either of those matters before, if I`m reading this right the Council are also determining their own planning applications.
That must be unethical, is it lawful?
It is just about lawful. It is, though, a very dubious practice, especially when the de facto chair of the planning committee whipped Labour councillors to ensure that all BxB applications would be approved.
To date, none have been refused.
Addressing specifically the selling of the site with panning permission, and the design of the new development, it seems to be sensible for Brick by Brick to sell it off, although – what with Covid and the fact that so many other large sites are already being built (the ultra-high-rise black towers nearby, the 4 blocks on the old Taberner House site, plus the redevelopment of St George’s Walk and the Nestle Tower) – there must be a distinct danger of oversupply of flats in Croydon.
So how high will the price yielded by the sale be?.
As to the design of the new development, I am glad to see that the plans show the tall block on the North East corner, which will block a relatively small amount of sunshine from the rest of the development and its inner landscaped courtyard. The railway cutting will get darker, which is OK.
I sincerely hope that the final design keeps the lower blocks on the west side as low as possible, to admit as much daylight as possible into that courtyard, and to minimise the amount of morning overshadowing cast across the eastern art of the adjacent open space, the design for which is out to public consultation.
By the way, it is sad in my view that the size of the renewed open space is one-third smaller than the old College Green, because under the Croydon Fairfield Quarter Masterplan (adopted 2014), the east end of the old open space was taken away, added to the multi-storey car park footprint, and reallocated to form the site for the new Fairfield flats development site, which is now to be sold as noted in the above article. We have lost a big area that would have been really important as open space for the use of all these new residents of central Croydon. The current Covid lockdown has reinforced something we knew anyway, that green openspace is vital for our mental and physical health.
Green public open space that you can sit down and relax on (as well as look at) is in very short supply in central Croydon. Queens Gardens is now dominated by a pack of four very large buildings, and will be badly overshadowed by them, in the winter particularly, so will lose much of its previous appeal for sitting out.
It is therefore vital that we do not end up with similar overshadowing by tall blocks of the already one-third smaller area of open space over the road at the renewing Fairfield Open Space.
I hope therefore that the Croydon Planning team overseeing the new development do not allow the buyers of the site to obtain permission for “development creep” upwards. Sunshine outdoors is vital for us all, particularly for flat dwellers. As London redevelops with higher buildings, the streets and parks near buildings are getting darker. Every floor up reduces sunshine on the ground.
This is one of the most challenged residential schemes I’ve seen for a long time in terms of sunlight penetration. Avoiding North facing units is good but I don’t think the 3D massing has been challenged to generate an optimum solution. Normally driving the firm for optimisation comes from a good architect and a focused client. Unsure about the later in this case.