Westfield non-developers facing £5m fine for failed supermall

Empty promises: following CGIs, CPOs and forced evictions, Croydon town centre is no closer to being ‘regenerated’ today than it was in 2013

CROYDON IN CRISIS: Council concedes it is virtually powerless over land-owners and developers for long-delayed regeneration scheme, as influential scrutiny chair admits her committee is not convinced things will change. EXCLUSIVE by STEVEN DOWNES

The company formed 10 years ago by Westfield and Hammerson, on a promise to redevelop Croydon town centre in a £1.4billion private business project that has never happened, now faces being hit with what is effectively a fine of more than £5million from the council to compensate for the development blight they have caused.

“Getting millions from developers who don’t develop is a no-brainer,” according to one senior council figure today. “The big question is how we don’t waste any more time.”

The “fine” is contained within something called the “Whitgift Indemnity and Land Transfer Agreement Remedy” or, in councilspeak, an ILTA, which is due to be discussed at a council cabinet meeting tomorrow night.

The council wants to activate a clause in a decade-old agreement “following the non-delivery of the redevelopment of the Whitgift Centre within the specified timeframe”, according to official Town Hall papers.

The Croydon Limited Partnership – or CLP – is the joint venture that was formed in 2013 by Hammersons, the owners of Centrale, and Westfield when they were the developers preferred by the Whitgift Centre’s freeholders, the Whitgift Foundation. Between them, they have been sitting on outline planning permissions for their retail wet dream since February 2014.

Under the agreements with the developers, moves towards the Compulsory Purchase Order for most of the Whitgift Centre were instigated by the local authority in April 2014, at huge cost to the council in terms of officer time and legal bills. Millions for the purchase of property have been sitting in escrow accounts since 2018.

“Cabinet resolved to make a CPO to assemble the land needed to facilitate the comprehensive redevelopment of the Whitgift Centre and surrounding land and gave authority to enter into contractual arrangements with CLP and related parties in relation to the scheme,” the report to tomorrow’s cabinet explains.

Centre of attention: Jason Perry when a ‘mere’ councillor and cabinet member 10 years ago

The cabinet member for planning, regeneration and transport in 2014, on what was then a Conservative-controlled council, was the owner of a South Croydon building supplies business… Croham councillor Jason Perry.

“Delegated authority was given to specified officers to take all necessary steps to promote the CPO, acquire land and rights by agreement or under the CPO and to complete the contractual arrangements with CLP,” tomorrow night’s report explains.

One of those contractual arrangements was a “retail remedy” under the Indemnity Land and Transfer Agreement, which agreed that the developers would be forced to pay £4million when given written notice before the deadline of February 21, 2023.

This sum was index-linked, which means that after 10 years even at the most modest inflation rate calculation, Croydon Partners could be looking at a bill of at least £5million if the arrangement is triggered by the Croydon’s executive Mayor… Jason Perry.

The council’s executive director of place, overseeing regeneration and planning in the borough back in 2014, was Jo Negrini, who had been appointed by the Conservatives ostensibly because of her “close” working relationship with Westfield on their Stratford shopping mall when she worked at Newham Council.

Such “closeness” might explain why it was agreed that any remedy payment should be triggered only after 10 years, and not sooner, when it has been clear for years what damage was already being inflicted on the town centre because of the developers’ inaction.

According to tomorrow night’s meeting report, the money is to be used “in order to seek improvements to North End to a cost of £4million indexed (from 5 February 2014) and a programme of asset management initiatives at the existing Whitgift Centre (the ‘Remedy Notice’)”.

The council papers to the cabinet meeting attempt to stress the powerlessness that the council, even as the local planning authority, has over land owners and developers in terms of forcing them to deliver on their CGI’ed promises.

Development blight: why did the council give the developers 10 years before triggering any ‘remedy’ payment?

“The council has limited levers to bring forward the redevelopment of the Whitgift site in terms of land ownership and funding and the ILTA was informed by this context,” the report states.

“However, the ILTA is still relevant and important, including in respect of the remedy provision.”

The council also has “further options”, but these are laid out in a secret “Part B” part of the report, withheld from the public.

The report includes a damning timeline of inaction by Westfield, Hammerson and the Whitgift Foundation.

These edited lowlights remind us that it is almost eight years now since the council staged its public inquiry into the CPO, and that Westfield and Hammerson – “Hammersfield” – were granted planning permission for a second time in April 2018, with a scheme that almost doubled the number of residential units to just over 900.

The fair dink ‘um Aussie outfit that was Westfield was taken over by Paris-based Unibail-Rodamco in June 2018.

Croydon Council has been little more than an emasculated by-stander over the last five years, with the likes of Negrini and the Labour council leader, Tony Newman, getting overly defensive and very touchy if anyone dared to question the lack of progress with the Whitgift Centre.

Meanwhile, the developers in their expensively tailored suits have twiddled their thumbs and pondered how to make their business make money while the high street retail sector continued to tank.

Less than three years after the Brexit referendum in Britain, and by February 2019, the new French management would soon be pulling the plug on any development in Croydon, announcing that it was under a “review”.

Cheerleader: Jo Negrini was hired by Croydon when Jason Perry was in charge of regeneration

It still appeared to be something of a shock for the cheerleaders in the Town Hall when 12 months later URW confirmed that Croydon Westfield was, as one observer put it, “a dead duckling”.

And that was before the drastic impact of covid. Partners Hammerson have been particularly hard-hit.

Thus, Croydon Partners allowed their second planning permission to lapse in 2021, and as the report states, in February last year, the “12-month period for discussion between council and CLP regarding best option as to how to proceed (under clause 11.1 (a) ILTA) ends without agreement having been reached or CLP having given notice that it intends to dispose of its interests”.

The report itself is already out of date, as it refers to the levelling up fund bid which the council submitted last summer, and which was turned down last week. The loss of that £20million funding will doubtless diminish what might be achieved with whatever amount is ultimately squeezed out of the Croydon Partners.

The whole saga has been going on for so long that the Croydon political wheel has turned full circle, and now the same Tories who appointed Negrini and instigated the Whitgift Centre regeneration are being asked to trigger fines on their favoured developers.

The remedy action was discussed at last night’s scrutiny committee meeting. Rowenna Davis, the Labour councillor who chairs the committee, told Inside Croydon, “Getting millions back from developers who don’t develop is a no-brainer. The big question is how we don’t waste any more time.

How much longer?: Rowenna Davis is pushing for action

“Our town centre desperately needs regeneration and residents have already waited too long.

“Scrutiny councillors pushed hard on this yesterday, but we aren’t convinced things will change,” the councillor for Waddon said.

“The council is limited by funding – especially when Croydon lost out on levelling up money.

“Meanwhile the Croydon Partnership needs to seriously step up. That starts with a proper planning application to regenerate our town centre as soon as possible.

“Scrutiny councillors will continue to push on this. Croydon deserves nothing less.”

The Croydon Partnership did not respond to Inside Croydon’s invitation to comment. The last news item on its website is dated June 2020…

Read more: Council concedes the end of its retail dream for town centre
Read more: Crisis for Croydon as Westfield ‘reviews’ its £1.4bn scheme
Read more: Westfield scale down plans, leaving Croydon a ‘dead duckling’
Read more: Mary Portas, Westfield, Bradford and a £1bn hole in the ground

About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in "Hammersfield", Business, Centrale, CPO, Croydon Council, Growth Zone, Heather Cheesbrough, Jo Negrini, Mayor Jason Perry, Planning, Property, Rowenna Davis, Tony Newman, Unibail-Rodamco-Westfield, Whitgift Centre, Whitgift Foundation and tagged , , , , , , , , , , , , , . Bookmark the permalink.

24 Responses to Westfield non-developers facing £5m fine for failed supermall

  1. Liam Johnson says:

    It’s utter incompetence by the original council that agreed this deal with basically no remedy against the developers should they fail to deliver.

    I watched the meeting last night, why does Cheeseburger insist on having such a ‘good relationship’ with our ‘partners’ that have purposefully let the town centre rot for 10 years?

    The developers have done absolutely zilch to help the town, why are we bending over backwards to still accommodate them?

  2. Jim Bush says:

    Surely Covid has been the saviour of the Centrale “shopping” centre ? They never managed to attract many shops to the centre and now a long-term rental to the NHS as a Covid vaccination centre must be their only hope of getting any income from their white elephant?!

    • John B says:

      Centrale is not a new development as the Drummond Centre was there before. It worked well until the downturn began in around 2009 when HMV then Virgin Megastore closed, later TK Maxx, Debenhams then House of Fraser was severely downgraded. The car park was convenient and low cost. Not so much a white elephant but a casualty of the economic downturn and UK government incompetent mismanagement.

      • The high street retail downturn was an observable trend by 2005.

        Which is why a proposed “investment” in a new temple to retailing of more than £1bn (it went up to £1.4bn with the second planning application) was always a very questionable, with predictable results.

        Hammersons is now a basket case of a company, under significant strain.

        URW effect French disinterest in south London.

        Our elected representatives, at the Town Hall and Westminster, should have been on the case from the start, arguing what was best for local businesses and residents.

        Instead, they opted to become cheerleaders for Westfield, with some in bed with landowners the Whitgift Foundation. The resulting disaster was predicted from the start.

  3. Phil Worsfold says:

    What do these developers not see?

    A Borough with 400000 residents and new developments on every street corner must have potential. Don’t they understand that if they built it they would come?

    Croydon could be a retail powerhouse if you applied some common sense and some innovative commercial creativity. It is shameful that the Council put themselves in a position of little or no power.

    It is time to get lawyers involved and to kick some arse. Croydon residents and the council should not be in a position where a developer dictates the future of their town. The current situation is unacceptable and needs to change.

    • 2deal2 says:

      To the left was an incompetent and greedy former Labour council, to the right is a greedy and incompetent current Tory council. Jason Perry as his bunch won’t review themselves – a turkey doesn’t prepare for Christmas.

  4. Kevin Croucher says:

    £5million to compensate for the development blight they have caused really is just a drop in the ocean.
    I got the 119 to Bromley last week, there really is no comparison. How much is it it going to cost to ever make Croydon a place that people would choose to go to instead?

  5. Don White says:

    Are we soon to be looking at another Nottingham Broadmarsh? £500million to leave the mall a wasteland?

  6. Anthony Miller says:

    The whole project was doomed to failure from the start. Instead of incrementally redeveloping the Whitgift Centre site a nonsense plan to pull it all down and rebuild it inside 3 years that would have reduced the Tome Centre to complete rubble and rebuilt it from scratch was launched that not only involved the existing site but CPOing everything around it. Like one of Stalin’s plans by the time it was enacted it was already out of date. The real problem with these plans was …they’re anti competitive. The Council should not be micromanaging business in this way.

    • The council micromanaged nothing. The plans were Westfield’s. The council was but pliant facilitators at the beck and call of private developers, exercising little by way of intervention in the broader public interest.

      • Anthony Miller says:

        The developers were not honest with the Council or the public about how much housing they wanted. Once the CPOs were done the developers turned round and changed their plans which elongated the whole scheme. So the properties that were CPOed were CPOed under false pretences. CPOs should be a last resort. I do not understand why the Council is CPOing for a private venture. Also by the end the plan was sponsored by 3 companies suggesting there were increasing finance issues with each reiteration of the plan. Then there were also the traffic and tram issues. The coup de stupidity was telling all the shop owners they would be evicted and then not going ahead multiple times. The original Whitgift Centre was built in three phases and the roof was added in the 90s. The plan involved redesigning everything in 1/4 of the time and was out of date as soon as it got past the planning hurdles it has to jump twice. These complete reimaginings of entire areas in super fast times that never happen are very poor project management and the over involvement of the state is part of the reason for their failure. The Council should not be CPOing shops it’s as crazy as them trying to run a hotel.

  7. Grahame Symonds says:

    I see the website for Unibail Rodamco Westfield proudly proclaims “Accelerating urban growth.” Surely part of the solution is to publicize and embarrass the Company. They will probably sell up in order to avoid this impacting on other of their schemes around the world. This might offer the opportunity of breaking the log jam. A truly disgraceful lack of competency and integrity on all sides.

  8. Lewis White says:

    Be careful what you wish for— they could sell it to the Chinese………

  9. derekthrower says:

    So the unravelling of this mess is going to be overseen by one of the chief instigators from the very beginning of it. I’ve forgotten it was Croydon Tories and of course Part-Time himself who unleashed Jo Negrini onto us all. The few million penalty clause may even be redeemed by the Developers to get them out of their obligations and set them free of this albatross. The amount recovered though will not be enough to even redevelop a small shopping arcade let alone a large town centre. With so much economic uncertainty and a central Government reaching the end of it’s road there does only seem a miserable time ahead and there goes another decade. Well what goes around comes around.

  10. Lewis White says:

    I just wanna see some decent designs to renew the Whitgift, to create a mixed environment of flats, shops, and offices with a new street pattern that would allow people to walk through a series of sunny, open (but sheltered) spaces and covered areas, not another boring mall.

    The problem is that developers hate to leave their comfort zone, and stick with what they are used to. OK if that is a successful formula, but, with the change to internet shopping, that is not going to be just the same old indentikit malls.

    Hopefully, the boredom factor post-covid, whereby people are waking up to the loneliness of 100% home working, and (I hope) actually want to leave their lonely kitchen table home offices, get out and meet real people , at least on some days every week, should make urban and suburban Croydonians more inclined to get back into Croydon if it offered a good shopping and environmental experience with added interest.

    Kevin above mentions Bromley. I have only shopped in Bromley twice in my life (so far), and I am aware of the fact that it has (or had when I last went there) the Glades shopping centre which included a swimming pool, something that we lack in central Croydon. The town itself has the feel of a country town which was not destroyed but has grown throughout the Victorian era, and subsequent decades, with a pattern of streets, and open spaces- and the Churchill theatre in the middle, not out on a windy limb, like the Fairfield. Bromley has something of the feel of Kingston, but without the Thames. Oooh–and buses that still get you right into the middle.

    I don’t think that the huge number of suburban dwellers who populate the surrounding borough have ever got out of the habit of going into Bromley, even through they have good rail connections (like Croydon) into London, and they are a tad closer to Bluewater. Lewisham folk, too, go there.

    Croydon was always more two-dimensional as a town centre — the High Street, from South End to London Road, plus one offshoot on the East – George Street- mirrored by Crown Hill going down to the Minster. Until the Whitgift Centre came along, that whole area was the Whitgift school, a quaint building and its lovely playing fields. (that is, Middle Whitgift School, now Trinity, and moved out to Shirley –funded when they built the Whitgift shopping centre)

    From conversations with fellow residents in Coulsdon, I know that very few of them go into central Croydon to shop for clothes and other items, but they did, once upon a time. Maybe the parking is too expensive (I have no idea what Bromley charges are) or maybe the disappearance of Allders, and the other department stores has clinched it. The rise of Ikea and the Purley way as a destination for buying furniture, white goods and a host of other things that we used to buy in Croydon has just sealed the fate of the town centre.

    It’s also so scruffy, with overflowing bins and greasy pavements, which puts people off. They don’t have to go there. And many don’t, or we would still have more shop in the Whitgift and Centrale, in spite of Covid and the Internet shopping boom. . Hindsight is a wonderful thing– If Centrale had not been built, the Whitgift would be less empty now.

    It’s clear that if the Whitgift Foundation just sits on its hands, the whole Whitgift Centre will get emptier , and dwindle away.

    Perhaps the Council could invest some of the £5million (thank you Rowena Davis for pushing for the claw back of the money) in a couple of sets of cufflinks and a heavy table, and some “persuaders”, to get Whitgift and Uniwhatsname to sit down to thrash out the future of the area— and not release them until a redevelopment plan is designed and agreed.

    With a full public consultation on the design, of course.

    • Lewis, you’ve been expressing these sort of views for as long as the redevelopment has been a notion. But what makes you think that you, or any residents, has a say?

      We really don’t, and any pretence of a “consultation” is all smoke and mirrors.

      This is a private business scheme. Run solely for the benefit of the landowners and their partners.

      They have treated with contempt their tenants and the public for more than a decade, and there’s no sign of change on the way.

  11. Sam says:

    Croydon is a effing failure

  12. Ken Odeluga says:

    I really just wanted to leave a comment about the quality of the ‘content’. This is a remarkably well written piece and excellently ‘reported’. It’s probably the best (and if I’m being honest, the first, ha!) proper local journalism about my locale I’ve read for over 30 years. I’m glad local journalism isn’t *quite* dead yet. Keep up the good work.

  13. Robert Cherrington says:

    Money talks, right now it’s shouting.

    As a commoner, I am wondering as to how this situation can be fixed. The truth is, don’t think it can.

    People with money, and power jobs, don’t really see us. Their main objective is to make the next buck in the name of progress, so they can maintain their class, investments, and lavish lifestyle.

    Once again, this proves to me that if you have money you can do as you please. I just can’t believe that all these educated, and intelligent people could allow such a situation to arise. Why is their system not working?

    Recently the word compliance has been featured a lot. Why weren’t these companies made to keep to their contractual agreements? Are they that powerful?

    Seems like they are, and for the last ten years people have been getting paid to make a massive debt. Who is going to pay for it now. The land owners and developers need to be accountable. Larger fines and prison sentences.

  14. Ian Kierans says:

    I remember the following –
    Croydon Conservative leader Mike Fisher resigned after it emerged he accepted a £10,000 pay rise, while the council underwent brutal cuts to services.

    Remember the costs left by that Conservaitve Council?
    Well Lord Barwell was both right and wrong when he is reported to have said
    “Hope this will go some way to restoring his reputation. What he did was wrong but he has also done a lot of good for our town.”

    Fisher did wrong but he had the decency to resign. I am sure he did some good but honestly it seems well hidden in comparison to BWH (Fishers Folly) which has done a lot of GBH to this Borough since it was populated (and perhaps prior)

    Newman also said “Finally Cllr Fisher resigns but many questions remain for Croydon Tories re who knew what & when? An independent inquiry must & will follow”
    Well Mr Newman might now be perceived as being a bit hypoctitical on that tweet and is still suspended from the Labour Party.

    Not a lot of decency around and interestingly no calls for an investigation or independent inquiry

    He did not resign nor did he apologise for what he left. Nor have those that participated by action or inaction of both parties.

    Apparantly not a lot of integrity but more importantly and interestingly no calls for an investigation or independent inquiry?

    Surely it is even in the Labour Parties best interests to have an independent inquiry the same as there should be into the Conservatives sordid actions? Or is this another case of the pan calling the kettle grimy ass?

    Pardon my ignorance here but some questions occur –

    The ILTA gives £4 million and more likely close to £5m ok.

    But there is a huge amount of money in that escrow account where is that going?

    There is a lot of property purchased and now owned by whom?

    This Council? Will all that be sold now? Who has ownership of that dosh? Where will all that money in the escrow account go? Is this a ploy to release more ”frozen” assets to pay down the politically engendered Consevative/Labour/Conservative Governemnt (but definitely not residents) incurred debt?

    What about all those people – yes people not premises – who had their livlihoods removed by those compulsory purchases? Will they be compensated? Allowed to return and rebuy those properties?

    Should they ever trust this sorry bunch of local Politicians ever again? Should any resident?

    More importantly will anything be left to rebuild Croydon or its services and Charities?
    So with Perry deep in the stink having his fingers fiddling with that pudding will he do the decent thing and resign? Will he double down and do twice the hours and go full Leatherface persiding over the slashing of everything good left in the Borough!

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