CROYDON IN CRISIS: The borough’s residents could be short-changed again as the council’s housing developer bails out by selling Lion Green Road flats on the cheap. EXCLUSIVE by STEVEN DOWNES
One of the country’s biggest housing associations is in talks with Brick by Brick to buy 157 flats that the council-funded housing developer has built in Coulsdon, in a deal that could have been worth close to £40million.
Notting Hill Genesis has confirmed to Inside Croydon that they have submitted an offer to buy the five BxB blocks on Lion Green Road.
The sale has yet to go through, though, as negotiations continue over the price to be paid. Notting Hill Genesis are thought to be seeking to buy the flats for as little as £20million – less than half of what the new-builds could have realised in sales over the last 12 months.
The housing association is cash-rich, having a £87million surplus in its latest six-monthly report. They also hold all the cards in their Coulsdon negotiation, with Brick by Brick effectively running a fire-sale of its assets to pay off some of the £200million in loans that they received from the cash-strapped council between 2016 and 2020.
‘Verdant’ and ‘pavilions’: the five blocks laid out on what used to be a council car park
With the property market about to nose-dive in 2023, NHG also know that finding buyers for Brick by Brick properties won’t be getting any easier any time soon. With Croydon Council having recently declared itself effectively bankrupt for a third time in two years, BxB needs to consider any offer very seriously.
The marketing bullshit that was routinely spewed out in the days when Brick by Brick and its spendthrift managing director, Colm Lacey, were still pretending that all was just hunky dory with their project remains on the company’s website today. Lacey’s BxB wanted to call the Coulsdon flats built on an old car park “Red Clover Gardens”.
“Red Clover Gardens is on Lion Green Road in the heart of Coulsdon. Designed by Mary Duggan, the scheme consists of five sculpted pavilions set within a verdant landscape.” “Sculpted” pavilions. Hmmm. And a “verdant landscape”. Oooo.
“Primarily residential, Red Clover Gardens includes 157 one-, two- and three-bedroom apartments, of which are [sic] 78 will be available to buy on-the-open market, and 46 through shared ownership. There will also be 33 offered at affordable rent.”
Stalled: construction work at Lion Green Lane was completed at least a year ago
Based on current market values in this part of south London, if Brick by Brick had managed to sell just the 78 flats intended, they should have been looking for more than £20million in sales receipts.
The shared ownership homes might have presented a slight problem to Brick by Brick, because Lacey forgot to get the company licensed to conduct shared ownership sales. But those 46 units probably represent another £12million-plus of unrealised value for Croydon residents.
Magician: BxB MD Colm Lacey made £200m ‘disappear’
It was profits from the sale of homes which, Lacey and his supporters, such as Labour councillors Alison Butler and Paul Scott, always promised would pay for the provision of new council homes – where social rent levels are usually less than the “affordable rents” being suggested here.
Of course, all those promises were broken, with Brick by Brick never paying a penny back in the loans and interest it had been handed by Butler and Scott. Instead, the council resorted to a suspicious-looking “circular” purchase arrangement on other BxB properties, using Housing Revenue Account money to buy flats that the council had effectively already paid for.
The council-owned Lion Green Road site was granted planning permission for the 157 flats by the local planning authority – Croydon Council – in July 2018. The site was sold by Croydon Council to Brick by Brick in January 2019 for £1.5million – probably less than 25per cent of its true value with planning permission – so another loss to the Council Tax-payers of Croydon.
According to Brick by Brick, the architects they were using at Red Clover Gardens were called Ruff.
“The dynamic shape and arrangement of the buildings, set amongst a canopy of trees, makes good use of this spacious setting. The living and kitchen spaces are generously proportioned with dual aspect, giving residents will always have a sense of connection with the landscape from within their home. The scheme was celebrated at an RIBA exhibition at the V&A Museum in 2018.”
That last piece of vanity demonstrates quite how glacially slow Brick by Brick’s development process has been – with all the extra time costing the company, and therefore Croydon Council Tax-payers, more money.
Five years on from that V&A Museum exhibit, locals suggest that the construction on Lion Green Lane was near-completed more than a year ago, but “it’s hardly been a hive of activity for months”.
Only in the last few weeks have the wooden hoardings around the site been removed, replaced by temporary mesh fencing. Half-hearted efforts at landscaping (“verdant landscape” remember?) have been undertaken. But otherwise, little money is being spent on the site as Brick by Brick winds down its operations, prior to handing it over to new owners.
The fate of the five blocks of flats is as yet uncertain: some suggest that Notting Hill Genesis might opt to use two for shared ownership, one for social tenants and put flats in the other two blocks on the private market – which might be expected to meet all of their costs on the deal.
Today, a spokesperson for the housing association told Inside Croydon, “Notting Hill Genesis have submitted an offer for the Lion Green Road development. As a high-quality residential development in a great neighbourhood, we would be very interested in agreeing terms with Brick by Brick for the purchase of the homes in the new year.”
The Mayor of Croydon, Jason Perry, should make the eventual agreed sale price for the Lion Green Lane flats public some time in the next 12 months – there’s nothing to stop him from doing so once the sale has been agreed. Only then will more accurate calculations of the losses to the council – and Croydon residents – be possible.
Read more: BxB’s collapse was predictable. Why did no one else notice?
Read more: Brick by Brick CEO says company has sold 6 houses. Or is it 5?
Read more: Brick by Brick faces ‘disaster’ as it misses sales targets by 83%
Read more: Building towards the council’s financial ruin, Brick by Brick
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
Inside Croydon is a member of the Independent Community News Network- By having a comment section, we provide all readers with an immediate “right of reply” on all our content. Details of how this works can be read by clicking here
- Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
- Inside Croydon: 3.3million page views in 2021. Seen by 1.6million unique visitors in that 12-month period
Remember what Sherlock Holmes once said [through his creator], “if you dismiss what is improbable, then whatever is left, however implausible, must be the truth” tick tick Colm, tick tick…
That’s only £127,389 per flat! Is there something wrong with them?
Has an independent valuation been made?
If they were to be sold for that price, and real people who wanted to live there could get their hands on them, that would surely be an excellent market correction. But of course the middlemen will take their cuts.
Given the tenor of many of the comments made in this thread, think it might be worth interjecting a little property business realism (something that was in short supply when Colm Lacey was in charge at BxB).
Anything, any property, is only ever worth what someone else is prepared to pay for it.
BxB and their self-regarding architects and contractors spent much time, and our money, over-designing and over-speccing properties where their locations (viz Drummond Road as one example) would never support the kind of prices required to meet the cost of the lifestyle fixtures and fittings that they planned for them.
Some developments over-ran in construction by so long, that costs soared. Essential parts of the planning permission, such as provided electric vehicle charging points, were often abandoned.
Now consider someone who fails to repay their mortgage and has their home repossessed. The home is sold at auction, for whatever anyone might pay, and still the former mortgagee is liable for the remainder of the mortgage repayment.
That’s comparable to the situation that the council finds itself in now, after BxB bankrupted the borough.
They have to sell, and they have to sell quickly, to meet all the other demands for money coming our way.
The new-ish, post-Lacey directors of Brick by Brick have a very tough job to fix the mess they inherited, while extracting the best-possible value from the properties.
Notting Hill, obviously, will want to achieve the lowest possible purchase price. That’s natural.
Let’s see how soon Mayor Perry, and the councillor who is really pulling the strings at the Town Hall, Jason Cummings, get round to announcing how “successful” they have been with the Lion Green sale, and whether they are prepared to put a figure on the price achieved.
IC, Dan and Chris are ALL making valid points.
But floggin off homes paid for exhorbitantly at a knock down price and then paying that same company exhorbitant rents back to them to house social tenants in as we have a shortage is total stupidity and profligacy on an industrial scale.
But on the wider scale one has to ask how this auction to Notting hill is in the Taxpayers interest.
Lets be clear – this is all taxpayers money – our hard earned money.
All the money that got borrowed by the Conservative Council and Labour Council was public money from the public purse.
All the money that went to that shower at BxB was taxpayers money – our money.
Selling those homes at deflated prices to a company that is private is giving them a gift horse from the taxpayer.
Whats the bet that those same homes are not then used for social housing and we the taxpayer are then paying that same company exhorbitant rental or just housing allowance for that provelidge?
I suspect that the point IC has about BXB being compelled is the key. This is all that they are tasked to do by the Council to alleviate the issues. Which has been forced by the Central Government to do this to repay its loans.
Both Local and Central governments administration face many issues. But in Croydon they are one and the same.
We are a broke Borough.
We have poor or no services.
All our services face huge resource demands.
All employee’s face huge rental and living costs not faced elsewhere.
And we face both a recuitment and a retention issue and will struggle to attract high quality people into our public services moving forward. This Governments actions and the last have obliterated the term vocation in publis services and nuked employee loyality to the extent that it will take decades for that to return if ever.
All our services face poor staff recruitment and retention.
Lets face facts why work in this area when you can work in better areas for the same money with less problems and lower living costs
So what would stop BXB the Council and the Government coming together and using those homes for Key workers providing a service in Croydon?
There are many looking at places and struggling to find anything under £200k.
Rents being advertised to medical staff and junior doctors are over £1500 pm.
I am being very conservative here. And then consider why demand outweighs supply.
The concept of a public company like BxB was valid to alleviate a housing problem and stop property speculation driving up costs to unsustainable levels as they are now.
The execution and people in charge was the flaw. The covert and underhand modus operandi brought it into disrepute.
But a real public auction to a government administered body that allows Key workers to buy individual flats sold as seen and set up their own managment company trust so those proprties would remain solely for key workers for ever?
Even just renting 78 of them to those key workers at an average of £1100pcm would generate over £1m per annum.
That is over the life of those few flats £25m in todays money And the asset remains also. Money can be used to maintain and even purchase or build more of the same
Not only would that assist the Council it would also assist Croydon University Hospital and other services with the recruitment/retention crisis they are facing. T
That would also reduce the costs of Agency Bank, locums, workers and overtime et al to the public purse.
The reality is that it is all taxpayers money.
So why are different parts of the political administration farting about in their ivory towers and not taking a co-ordinated concerted and holistic view of the sitautions surrounding us.
Are too many are still playing internicine politic’s and leting the taxpayer get fleeced.?
The real questions here are why politicians after saying repeatedly ”we need to learn the lessons” from monumental errors do they keep repeating them?
And why do we keep voting for them?
These are the flats that Jo Negrini, Heather Cheesbrough and Colm Lacey were raving about because they were designed by a cutting edge ‘name’ architect. Critics were admonished for not appreciating their importance of the source of the designs.
Wind the clock forward and we are left with a development the council is potentially selling at a loss. What a fuck-up and what a mistake these people were able to make decisions on our behalf.
I think we should have a commission in the council that looks at why the borough frequently fails to get the right people into top jobs.
The make up of Crouydon Council senior managers and directors should reflect the make up of society in terms of sex, age, ethnicity and sexual orientation. Under Negrini this was not the case and there were huge biases and huge under performance.
I want to see Negrini made to give back the sub-£0.5m payout she forced out of public coffers before abandoning ship. Negrini left so much damage and debt behind her she deserves nothing.
Shame on Tony Newman for handing over so much cash, as if it was his own.
How is it that so much money has been wasted – millions and millions – and there have been no consequences for those involved? Negrini was paid half a million pounds for her failure. Colm Lacey set up his own consultancy whilst being paid to work for Brick by Brick and has since gone to work for an architecture company he gave work to, and Negrini-appointed Heather ‘made up qualifications’ Cheesborough continues to draw her handsome salary and benefits from Croydon Taxpayers when her failures have been exposed time and time again. Is anyone in charge?
Jason Perry and Katherine Kerswell are allegedly in charge. Both do not want to rock the boat and both have self interest at heart. The latter trying to attain a huge payout for herself and the former paranoid about being seen to make the wrong decision.
Perry should begin to get Kerswell removed now.
We didn’t pay half price to build them, why are they being sold 50% off, we want OUR money back 100% AT LEAST!
“old car park…” Don’t they mean the one and only suitable car park for shoppers wishing to shop in Coulsdon’s shops? How many shops will suffer from reduced customers and how many will have to close as a result?
Why the rhetoric? It’s not hypothetical, the car park has gone. Is the impact known by now?
Nothing good will come of this…..think an exit strategy is in order
Janet: this *is* the exit strategy
I have lived in Coulsdon for some 65 years, Brick By Brick’s sad performance can only be viewed as surreal even by LBCroydon’s recent standards. Why are the Negrinis and Laceys of this world not on their way to jail?
Based on current national practice, the question should be, “why are they not on their way to the House of Lords?”
Croydon Council is only worth half price but we are still paying full price!!!
If they’re willing to sell at half price, why can’t they sell at that price to the public!
Yes, I agree. At least some good would come of losing so much taxpayers’ money.
I agree, but that would be taking from the rich to give to the poor. In present circumstances that’s frowned upon because the priority is making the rich richer at any cost!
The more one reads about the doings of the various bits of the Council and its leaders and senior officials over recent years, the more one cringes in embarrassment.
The Croydon shambles has dragged on far too long.
These flats shouldn’t be flogged off under some cosy under-the-counter deal that leaves us taxpayers bearing the loss.
If they are all to be sold, it should be done properly, with an open process that maximises the value and minimises the costs.
How was the build funded other than the loan referred to above ? Debentures etc , if so have they been called upon? Is it not time that Jason Perry and the councilors, planning officers etc organized an open meeting for the public to attend and question, with the press present and address the concerns of many residents, given the huge failings in numerous areas of the council?. Many of the councilors have been at the council for many years and are thereby accountable. Likewise the officers .No doubt they could enlighten the residents of the position and their compliance with the Nolan Principles of which they are bound, of accountability , honesty, integrity , openness .objectivity, leadership, Selflessness
Holders of public office should act solely in terms of the public interest. If Jason Perry is keen to establish residents views this might be a sensible way. Enough is enough of the current ineptitude and bullying as found in numerous independent reports .
It would be great if such a meeting were held. The problem is that Heather Cheesborough and others would struggle if confronted with the abundance of evidence of their lack of compliance with the Nolan Principles.
I see no good reason why a meeting cannot be arranged, if the residents demand one and Jason Perry wants to improve the council . Yet to see any evidence of any improvement whatsoever in the council it or with its officers . I raised the Nolan principles at two of the mayoral Hustings St Francis Church and BAME .Jason Perry was a candidate and of course won. His reply may still be on St Francis church CR 2 web page.
Don’t forget there are still councillors on the labour group who have no problems with still believing in the Brick by Brick fantasy.
On Nov 3, 2021, Sean Fitzsimons, who had chaired the “scrutiny” committee throughout the years when “lack of oversight” and control saw BxB running out of control with hundreds of millions of pounds of public money, tweeted, “The more one looks at the Brick by Brick, the more one sees how a great opportunity, to provide high quality, well designed homes in Croydon, failed due to poor financial control & insufficient oversight.
“At least their legacy will be 750+ homes rated among the best in the UK.”
Properties can be sold one by one by auction to get the best possible price for ratepayers