Last week I wrote that TfL ignored concerns when it agreed to enter a joint venture with private developer Capco to demolish and redevelop Earls Court. The move had been strongly opposed by campaign groups, industry experts, local people, and London Assembly Members including myself (here is the cross-party letter we wrote asking the decision to be deferred).
I’ve explained many times on this blog why the redevelopment is a bad deal for London: destruction of the iconic exhibition space and its massive contribution to the local and regional economy; loss of the high-quality Earls Court and West Kensington estates; and another ‘regeneration’ project that will see luxury flats put on the market at prices very few Londoners can actually afford.
But TfL pressed ahead with the deal because “anticipated returns that TfL makes on its investment over time will be available for reinvestment into the transport system.” This is an £8 billion redevelopment, and the joint venture allows TfL to retain a stake.
The issue then is whether TfL got the best deal. Even though TfL is the landowner, the joint venture creates an entity that is a 37/63 per cent split, with the larger proportion owned by Capco. This means the entity will not be a subsidiary of TfL, which means that the profits will only be from dividends or partnership distributions (and under a distribution policy controlled by the majority owner Capco).
This doesn’t sound to me like TfL fought to get the very best deal it could. I have long argued that TfL needs to redevelop the land around its stations, both as a way to secure income for transport and to help solve the housing crisis. I also believe that retaining a stake in the development is the right way to go. But it needs to be a stake that represents the very best deal for London, and this fails to do so.
These issues are raised with Dave Hill’s commanding detail in his post from this weekend, which you can read here. The London Assembly Transport Committee will have a chance to question TfL Commissioner Peter Hendy about the joint venture when he appears before it on 12 March.