GREATERLONDONAUTHORITY

REQUEST FOR ASSISTANT DIRECTOR DECISION — ADD400

Title: Gateways — Revenue Funding

Executive Summary: To providefunding to the London Borough of Barkingand Dagenhamto assist them to undertake valuation, master-planning and development appraisalworkto support the BarkingRiversideGateways HousingZone.

Decision:

The Assistant Directorapproves:

• Revenue expenditure of £50,000 in the form of a grant to LBBarkingand Dagenhamfor valuation, master-planning and development appraisalwork at BarkingRiversideGateways.

AUTHORISING ASSISTANT DIRECTOR/HEAD OF UNIT:

I have reviewedthe request and am satisfied it is correct and consistent with the Mayor’s plans and priorities. It has myapproval.

Name: Jamie Ratcliff Position: Assistant Director — Programme, Policyand Services

Signature: Date: ‘ k?g’— 20

ADDTemplate May2014 1 PART I - NON-CONFIDENTIAL FACTS AND ADVICE

Decision required — supporting report

1. Introduction and background

Barking Riverside

1.1. BarkingRiversideis a brownfieldsite of over 170 hectares situated on the north bank of the Thames at the heart of the Mayor’sLondon RiversideOpportunityArea.The site is owned by Barking RiversideLimited(BRL);a joint venture (JV) company, owned by GLALand and Property Limited (CLAP)and London& Quadrant New Homes.The purpose of the JV is to prepare the Barking Riversidesite for redevelopment, providingserviced development plots for house buildersand essential physicalinfrastructure, includinghighways,utilities, public realmand communityfacilities.

1.2. In 2007 BRLsecured an outline planning consent for 10,800 homes, as well as health, education, shopping, communityand leisurefacilities.Detailed planning consent for the first two stages was secured in 2009. To date, a localcentre (the RivergateCentre), as wellas 697 homes have been completed and occupied, with a further 461 homes due to complete by March2017.

1.3. BRLhas been workingcloselywith the GLA,HMTreasury,Transport for Londonand private sector funding partners to finalisefunding arrangements for the extension of the Gospel Oakto Barking LondonOvergroundline to the site, whichwillsee a significantchange in the strategic direction of the project; unlockingthe full potential of the whole site for 10,800 homes and 65,SOOsqmof commercial,retail and leisuredevelopment.

1.4 In MD1565, the Mayorapproved the provisionof funding by CLAPto contribute towards the costs of the railwayextension and in MD1594, the Mayordirected Transport for London (TfL)to enter into a funding agreement and a land and works agreement with BRL,to enable the deliveryof the BarkingRiversideExtensionby 2021. The agreements were completed in March2016.

1.5 As a consequence of the new railstrategy, BRLhas prepared a revised masterplan whichwas submitted as a section 73 planning application in January 2016.

Gateway Sites

1.6 The sites described in this report as the ‘Gatewaysites’ are three areas whichsurround the Barking Riversidedevelopment which are highlighted in Appendix1- InterventionAreas, namely: 1) Thames Road 2) RiverRoad (northern part) 3)

1.7 The three areas present a very poor route into BarkingRiverside,whichdetracts from the high qualitydesign of the new development and has a negative impact on values and therefore development viability.The current industrial uses also separate BarkingRiversidefrom the recent development at ThamesViewEast, as well as the HousingZone at BarkingTown Centre, to which the GLAhas allocated £42millionto deliver2,295 homes. Residential-leddevelopment of the Gatewaysites would facilitate better connections between BarkingRiversideand BarkingTown Centre and also integrate Thames ViewEast into the wider residentialcommunity.

1.8 Thames Road and Creekmouthare currently designated as Strategic IndustrialLand(SIL),and part of the RiverRoad area is a locallysignificant industrialsite. The London RiversideOpportunity Area Planning Framework(adopted September 2015) recognisesthat the Thames Road and Creekmouth

ADDTemplate May 2014 2 areas could be released from SILand re-designated for housing use (see Appendix2 — OAPF diagramshowingthe potential release of industrialland). The London Boroughof Barking& Dagenham (LBBD)plansto de-designate the areas as part of their LocalPlan review,which is currently underway. Initialestimates suggest that the three areas have the potential for 6,000 new homes.

1.9 Giventhe development constraints inthese areas, it is unlikelythat a change in planning policywill providea sufficient incentivefor the private sector to deliverthe transformation required without further interventions from the public sector. The site constraints include flood risk,remediation requirements and fragmented land ownerships(there are around sixtyseparate ownerships in these areas); meaning that the land values for residential use are comparable to or lessthan the existing use value, depending on individualsite constraints.

1.10 The preferred solution is a comprehensive,planned approach to the regeneration of the area to secure new homes, high quality public realm,and to maximisethe speed of delivery.This paper seeks approval for the GLAto support LBBDto lead this workthrough co-funding valuation, high levelmaster-planning and development appraisalwork.

1.11 Capitalfunding for land acquisition inthis area willbe made availableto LBBDas part of the second HousingZones programme;MD1632 designated ‘BarkingRiversideGateways’a HousingZone and allocated £30m of funding to contribute towards land acquisition.This revenue funding will complement this capital funding and enable comprehensive,high quality development.

2 Objectives and expected outcomes

2.1 Thispaper seeks approvalfor the GLAto contribute half of the costs (to a maximumof £50,000) of valuation, master-planning and development appraisalworkin relation to the BarkingRiverside Gatewayssites. The remainderwillbe funded by LBBD.Thisexpenditure willbe incurredduring 2016-17 and willbe funded through underspend on the BarkingRiversideJV project. This has been approved in principleby the Assistant Directorof Strategic Projects & Property.

2.2 LBBDhas already begun some of the feasibilitywork: land registrytitle informationfor allthe relevant titles has been collated and Glennyhas been engaged to providevaluation advice. Glenny has extensive experience of this type of advice, as well as wide-ranging localknowledge.

2.3 ASeniorStrategic Plannerfor the GLAwillproduce high-leveldevelopment capacity work and LBBD has engaged a planning consultant to produce development appraisals informed by the valuation and development capacitywork.This initialwork should facilitate the production of a land acquisitionstrategy whichwillidentifythe key sites where HousingZone investment should be focused. It is likely,however,that further master-planning workand appraisalwork outside of these originalinstructions may be required before the sites can be acquired.

2.4 Once sites are acquired, LBBDand GLAwould seek to procure one or more development partners to develop the sites for predominantlyhousing use. It mayalso be possible to workwith some existing ownersto procure development partners, rather than acquiringthe land.

2.5 LBBD’sDecemberAsset and CapitalBoardapproved the development and submissionof a Housing Zone proposal for the BarkingRiversideGatewaysarea and a further report willbe presented at a later Cabinetseeking approvalfor the land acquisitionstrategy. This report willincludea request for CPOpowersto be used on these sites if necessary.

2.6 In addition, the GLAis exploringthe option of acquiringsites to delivershared ownershiphomes at scale, using funding from the FirstSteps ChallengeFund. Sites within the BarkingRiverside

ADOTemplate May 2014 3 Gatewaysarea could be suitable for this. DecemberHousingInvestment Group (HIG)considered the option to acquire sites through the FirstSteps ChallengeFund, and a further paper willbe brought to a later HIGcontaining a modelled proposalfor direct land purchase, which mayfeature sites in these areas.

3 Equality comments

3.1 No adverse impacts on those with protected characteristics have been identified at this stage, and the needs of those with protected characteristicswillbe considered as master-planning work progresses. Thisfunding willfacilitate the deliveryof housing (includingaffordable housing) on these sites.

4 Other considerations

Keyrisksand issues

4.1 The main riskis that this funding is insufficientand an increase in expenditure is necessaryto complete valuation, master-planning and development appraisalworkfor these sites. This is not a financial riskto the GLAas the GLA’sfunding contribution is capped at £50,000 and LBBDwillcover any cost overruns. Ifit is deemed that further expenditure on these sites would be beneficialin order to better facilitate development,a further decisionwillbe sought from the GLA.

4.2 At present, it is estimated that the project budget willbe sufficient savings have already been made as the initialmaster-planningwork has been undertaken by a SeniorStrategic Planner at the GLA.

Linksto Mayoralstrategies and priorities

4.3 Thisfunding willcontribute to the followingkey Mayoralstrategies and priorities:

The LondonPlan - Promotegrowth in east London - Deliverthe objectivesof the London RiversideOpportunity Area Planning Framework - Deliverhousing of high design quality

Mynr’ ffcusirigStregy - Contributeto housingdeliveryin London,includingaffordable housing

My.QflEcnnrnk Lop nt5tragy - Regenerate a deprivedarea of London

4.4 Thisfunding is alignedto the BarkingRiversideGateways HousingZone. LBBDsubmitted a Housing Zone visiondocument and details of the financialinterventions required and the housing units to be deliveredthrough interventionsin this area. This proposal was assessed against pre-published criteria and, havingdemonstrated a need for regeneration whichwillunlockhousing delivery,Barking RiversideGatewayswas designated a HousingZone in MD1632.

Impactassessments and consultations

4.5 Planningapplicationssubmitted on these sites willinclude an EqualitiesImpactAssessment,where appropriate.The LondonRiversideOpportunityArea Planning Framework(adopted September 2015) recognisesthat the Thames Road and Creekmouthareas could be released from SILand re designated for housing use. Opportunity Areasare identified inthe London Plan,whichhas been subject to an EqualityImpactAssessmentwhichis availableon the GLAwebsite.

ADDTemplate May2014 4 5 Financial comments

5.1 The decision is being sought for revenue expenditure to a maximumof £50,000 towards the provisionof funding to the London Boroughof Barkingand Dagenham (LBBD)to assist invaluation, master-planning and development appraisalworksto enable the deliveryof a BarkingRiverside GatewaysHousingZone. The remainderof the costs willbe funded by LBBDas wellas any cost overruns,as GLA’sfunding contribution is capped at £50,000.

5.2 The expenditure willbe allocated from BarkingRiverside— JV project budget, which incurred spend to date of £164k against the designated budget for 15/16 financialyear of £238k. The expenditure willbe incurred in 16/17 financialyear and allthe required budget adjustments willbe made to account for any underspend.

6 legal comments weLtUmaRestetQfqs±qn

5.1 Under section 30 of the Greater LondonAuthorityAct 1999 (the ‘Act’)the GLA,after appropriate consultation, is entitled to do anything that willfurther the promotion, within , of economic development and wealth creation, socialdevelopment and the improvementof the environment.

5.2 Furthermore,section 34 of the Act allowsthe GLAto do anything which is calculated to facilitate, or is conduciveor incidentalto, the exerciseof any functions of the CIA. Inthis case, the GLAwishes to providefunding to LBBDto help support valuation, high levelmaster-planning and development appraisalwork in relation to the regeneration of BarkingRiversideGateways.Accordingly,the funding may be viewed as being calculated to facilitate and conducive and incidentalto the promotion of economic and socialdevelopment within Greater London.

Funding

5.3 The proposed grant of up to £50,000 to LBBDmay be viewed as a conditionalgift rather than a contract for services and supplies. Paragraph 6.4 of the GLA’sContracts and Funding Code requires that the funding be distributed fairly,transparently and in accordance with the GLA’sobligations regarding equality of opportunities. To this end, the officers have set out in paragraph 4.4 above how they have met the said requirements. Furthermore,the officers must ensure that an appropriate funding agreement is put in place between the CIA and LBBDbefore any commitment to the funding be made.

7. Planned delivery approach and next steps

Activity Timeline

•LBBDCabinet approves land acquisitionstrategy and CPO powers June 2016

Appendices and supporting papers:

Appendix1 — BarkingRiversideGatewaysInterventionAreas Appendix2 — OAPFdiagram showingthe potential release of industrialland

ADOTemplate May 2014 5 Public access to information Informationin this form (Part 1)is subject to the Freedom of InformationAct 2000 (FOlAct) and willbe made availableon the GLAwebsite withinone working day of approval.

If immediatepublication ri5kscompromisingthe implementation of the decision (for example, to complete a procurementprocess), it can be deferred until a specificdate. Deferralperiods should be kept to the shortest length strictlynecessary.

Note: Thisform (Part 1) willeither be publishedwithin one workingday after approval or on the defer date.

Part 1 Deferral:

Is the publication of Part 1 of this approval to be deferred? NO IfYES,for what reason:

Untilwhat date: (a date is required if deferring)

Part 2 Confidentiality: Onlythe facts or adviceconsidered to be exempt from disclosure under the FOl Act should be inthe separate Part 2 form,together with the legal rationale for non-publication.

Is there a part 2 form — NO

ORIGINATINGOFFICERDEClARATION: Draftingofficerto confirmthe following(V) Drafting officer ElinorSavage has drafted this report in accordance with GLAprocedures and V confirmsthat the Finan.ctan_dLga1 teams have commented on this proposal as required, and this decisionreflects their comments.

HEAD OF GOVERNANCEAND RESILIENCE:

I confirmthat financialand legal implicationshave been appropriatelyconsidered inthe preparation of this report. Signature Z Date /7’ /4

ADDTemplate May2014 5