STEVEN DOWNES reports on the colourful character behind the business which is set to buy up Croydon’s loss-making house-building company
The company tipped to take failed housing company Brick by Brick off Croydon Council’s hands has broken loan covenants and needed multi-million-pound bail-outs of its own in the past to enable it to continue trading.
And since the Grenfell Tower tragedy four years ago, a number of developments by Manchester-based Urban Splash have been reported as having used flammable cladding which failed to comply with building safety regulations – hardly reassuring from a company that was established by a bloke whose previous job was selling fire extinguishers door-to-door.
Urban Splash was co-founded in 1993 by Tom Bloxham, a colourful character and Labour-supporting “celebrity” entrepreneur of the kind you might expect to see on Dragon’s Den. Bloxham is so celebrated, he even has his own portrait in the National Portrait Gallery – posed with loads of breeze blocks, arranged, of course, brick by brick.
A former pupil of Tiffin School in Kingston, Bloxham has been based in Manchester since going to read politics and history at the university there. From running a poster shop and being a fire extinguisher salesman, in his mid-20s Bloxham partnered with an architect, Jonathan Falkingham, to form Urban Splash, with a focus on “regeneration”, converting Manchester’s ample supply of disused industrial buildings for residential use.
More recently, the company has been responsible for refurbishing the once-notorious Park Hill Estate, the 1960s-built Brutalist blocks of hundreds of council flats – a one-time architect’s dream of a “city in the sky”, which dominates the centre of Sheffield.
The blocks are being spruced up and many of the flats flogged off on the private market, together with some student accommodation, with a bit of the inevitable artwashing going on. The regeneration has been undertaken by Urban Splash together with Mikhail Riches, favoured architects with Brick by Brick.
Since starting Urban Splash, Bloxham’s gone on to be Chancellor of his former university and was awarded the MBE for “services to architecture and urban regeneration” (ie. making millions from basically doing his job) during Tony Blair’s first term as Prime Minister.
By 2007, Bloxham was listed at equal 925th on the Sunday Times Rich List, with a personal wealth of £73million (though he appears to have slipped off the Rich List in the years since). His property portfolio around that time was said to be valued at around £200million.
Now aged 57, Bloxham is reported to own three homes, one in Manchester and two in France.
He is even an Honorary Fellow of RIBA, the Royal Institute of British Architects, just like Jo “Negreedy” Negrini, the Croydon Council employee who helped to form Brick by Brick and oversaw the fledgeling building company being handed £200million of public money, none of which it has ever repaid.
Also like the self-proclaimed “regeneration practitioner” Negrini, Bloxham’s been a return visitor to MIPIM, the “booze and hooker fest” that is usually staged annually in Cannes in the South of France for the benefit of the world’s property speculators.
Bloxham’s online profile says that Urban Splash “has received 419 awards to date for architecture, design and business success”; though since Brick by Brick itself has also claimed multiple “awards” from their friends in the architecture and construction industries, Inside Croydon’s loyal reader will probably be aware that they rarely actually count for much.
Bloxham’s profile states that Urban Splash “is responsible for development projects across the country, including Manchester, Liverpool, Cambridge, Milton Keynes, Birmingham, Leeds, Bradford, Sheffield, Bristol, Plymouth, North Shields and Morecambe.”
Notably, that list doesn’t include London. Until now, perhaps.
What his profile on Urban Splash’s website makes no mention of, though, is the problems the company has encountered recently over cladding on residential blocks.
Nor does it say anything about the company’s past financial difficulties.
In January 2013, the Manchester Evening News reported, “Property developer Urban Splash is in talks to renegotiate its debt pile after breaching its loan covenants during another year of tough trading.”
Company figures showed losses for the year to March 2012 of £15.4million, with debts rising to £242million.
“The accounts, posted on December 20,” the newspaper reported, “reveal £206.8million is now repayable on demand.” It was a situation not entirely dissimilar from that which Brick by Brick finds itself in today.
Among the loans which Urban Splash had failed to repay – thereby breaking its agreements, or covenants, with its lenders – was £113.6million from a syndicate of banks, “which previously had to be paid by June 2013 but can now be called in at any time as a result of covenant breaches”.
Urban Splash also had a £90.6million overdraft with HSBC. That, too, was repayable on demand. According to the newspaper report, “The firm, headed by founder and chairman Tom Bloxham, said it was in ‘advanced discussions’ with HSBC over restructuring its debt with the bank and that it hopes to ‘satisfactorily conclude discussion in the near future’.”
Coverage of Urban Splash’s business affairs in the local paper was a little kindlier after that. “Urban Splash smash through £100m mark”, read one 2014 newspaper headline, focusing on the firm’s turnover, and ignoring the old business adage that “Turnover is vanity, profit is sanity”.
Seven years ago, the company which is today pitching to acquire Brick by Brick from the council and wipe out “the majority” of the Croydon company’s £200million debt had a turnover of £132.6million, from which it made “a small profit” of … £50,000.
Then, the MEN quoted Bloxham as saying, “The last 18 months has been one of the most important in our recent history, one which has hopefully put Urban Splash on a sound platform for future growth as well as finding a solution to the problems associated with the large debt burden which has beset us since the onset of the financial crisis in late 2008.”
The “sound platform” came from reorganising the company’s debt. In April 2014, BusinessLive reported Bloxham as saying, “We have also been working hard since 2011 to refinance our debt and form new joint venture relationships with strong stable financial partners…
“We are currently fully engaged with all our funders in negotiating new bank facilities for the medium-term.
“We are fortunate to have funders who have been supportive of the group through the last three years and are hopeful that we can conclude our negotiations with them in the next few months, putting the group on a sound financial platform for the foreseeable future.”
Fast forward to 2021, and Bloxham and Urban Splash are at the centre of a complicated nexus of companies, spin-offs and corporate registrations, many of them carrying various “charges”, or loans.
One of the interlinked companies, Urban Splash Commercial 2017 Ltd, for example, made a profit of £3million in 2018. That, however, was followed by a £205,000 loss in 2019.
In the past couple of years, they have unveiled a new brand, House, based around reduced-cost modular builds, raising the business’ profile by an alliance with TV architect George Clarke and using some funding from Homes England.
The patter, though, seems remarkably familiar to anyone who has looked at Brick by Brick’s promotional piffle: “Our mission is to provide what the market doesn’t offer, a range of modern homes that are variable, adaptable and configurable.” Whatever that’s supposed to mean.
Urban Splash Ltd, the original company, last posted trading figures up to September 2019 which show a profit of… drum roll… wait for it… £163,297.
Which is not to be sniffed at, since the previous year the company had made a profit of just £14,684. Nonetheless, there would be no dividends paid to shareholders.
Companies House records show latest audited accounts for Urban Splash Ltd with “retained losses” – accumulated debt – of nearly £16million.
And it includes a director’s report which states that, “The directors expect the company to cease trading subsequent to the year-end.”
Given that Croydon Council is reportedly in the late stages of due diligence over whether Urban Splash is capable of buying up the debt-laden Brick by Brick, this raises all sorts of questions, not least about the effectiveness of the council’s diligence process itself and how the council’s executives have granted Bloxham and his firm this preferential bidder status, apparently without inviting or entertaining offers from other developers or investors.
We do know that there are ties between Urban Splash and Brick by Brick personnel. Both companies have worked with some of the same trendy firms of London architects.
It is also known that Colm Lacey, BxB’s chief executive, was ringing round his contacts at the end of last year trying to find a buyer for the basket-case company on his own initiative. Might Bloxham have taken his call?
Kate Brown, Brick by Brick’s head of marketing since November 2018, and like Bloxham, herself a Manchester University graduate, used to work as brand director of Urban Splash.
“I worked with my old friends at Urban Splash at a critical point in their re-growth,” she has written.
You can imagine that phone call: “Hi Tom. Kate here. How you getting along?
“You know you were always talking about wanting to break into the market in London..?”.
We wanted to ask Bloxham himself a few questions.
Yesterday, we emailed him (he wasn’t in the office and the company wouldn’t provide a phone number) and asked if he denied the Property Week report that his firm was about to become the proud owner of Croydon Council’s Brick by Brick. There was no denial forthcoming.
We also asked when was the first contact made between Urban Splash and Croydon Council. Who initiated the negotiations?
We asked whether Urban Splash been given priority or sole bidder status, and what Bloxham had to do to achieve such a cosy, commercially advantageous role.
We also asked, “Given your own company’s most recent financial figures, what makes you believe that you could usefully turnround the fortunes of Brick by Brick?”
Among our other questions, we asked, “How much money is Croydon Council having to pay into Brick by Brick to remove the over-run costs of the Fairfield Halls project from its balance sheet?” Our guesstimate is at least £40million, but it would be good to have an official figure of the cost to the Croydon Council tax-payer.
Likewise, we wanted to know, by way of a sweetener on the deal for the prospective purchaser, how many of Brick by Brick’s nearly completed homes that Urban Splash is about to acquire from BxB has Croydon Council already agreed to buy back immediately?
And we asked probably the key question over this whole fire-sale, “Property Week refers to the Urban Splash purchase paying off the ‘majority’ of Brick by Brick’s debt to Croydon Council. Is that just £101million, or is it significantly closer to the £200m of loans and unpaid interest payments?”
Bloxham has answered none of our questions.
When the Brick by Brick sale comes up at the council cabinet meeting on May 17, let’s hope the borough’s elected representatives get satisfactory answers to all of those questions, and more.
Because, potentially, there’s more than £100million of public money and property at stake.
- Read Tom Bloxham MBE’s CV here
- Read Chris Buss’s full report on the future of Brick by Brick
- Check out the list of schemes under construction by Brick by Brick
- The council’s list of sites that will not be transferred to Brick by Brick
Read more: Going to the lowest, only bidder: council finds buyer for BxB
Read more: Council set to take £100m hit as it winds down Brick by Brick
Read more: Brick by Brick has paid nothing to council
Read more: ‘An accountant could have foreseen this more than a year ago’
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