GOVERNMENT OFFICES GREAT GEORGE STREET

London, United Kingdom

The refurbishment of Government Offices Great George Street (GOGGS) is at once a flagship case study Development Team of a successful private finance initiative (PFI)—a U.K. program put into effect to transfer the development Owners risks for government projects from the public to the private sector—and also a high-quality renovation Her Majesty’s Treasury project that treats government property and employees with the same care as a developer would treat , United Kingdom private sector owners or tenants. www.hm-treasury.gov.uk GOGGS is a Grade II–listed building in the heart of , opposite the houses of Parliament and Her Majesty’s Revenue and Customs . Originally completed in 1917, it has been since 1945 the main office of Her Majesty’s London, United Kingdom Treasury (HMT), which is headed by the chancellor of the exchequer. Designed for an earlier age, GOGGS www.hmrc.gov.uk was determined to be inadequate for today’s civil service and its renovation was put out for bid as a PFI Private Finance Consortium project. In 1996, Exchequer Partnership (EP) was selected as the developer. Exchequer Partnership (Stanhope; Under the PFI program, developers bid on the project and the winning team assumes all develop- and Bovis Lend Lease) ment and operational responsibility for a negotiated term in exchange for collecting a fixed annual pay- London, United Kingdom ment. For this project, EP negotiated an annual rent of £14.1 million (Û22 million/$21 million) for Phase 1 and £17.1 million (Û25.7 million/$31 million) for Phase 2 for terms of 35 and 33 years, respectively. Development Manager The GOGGS PFI was the first such HMT project for which a standard terms and conditions contract was Stanhope, PLC negotiated. The contract stipulated a schedule of fees and payments for certain cost-related occurrences. London, United Kingdom www.stanhopeplc.com The GOGGS project was also the first PFI project for which a government/developer team conducted a funding competition among potential lenders for the right to finance the development, a process that Construction Manager saved £13 million (Û19.5 million/$23.6 million) over the life of the concession. Bovis Lend Lease Under the PFI, EP would be responsible for maintaining GOGGS for 35 years according to agreed London, United Kingdom standards. This long term encourages EP to act as an owner would act under the same circumstances. For www.bovislendlease.com example, knowing that it is responsible for the building’s maintenance over the term, EP is likely to con- Architects sider durability an important factor in specifying materials and architectural elements. For the project, this has resulted in predictably higher initial development costs and lower operational costs. Other con- Foster & Partners London, United Kingdom ditions in the negotiated contract included a provision that the HMT staff would not have to vacate the www.fosterandpartners.com premises during the building’s refurbishment and a provision that EP would be responsible for obtain- Feilden & Mawson ing any necessary permits. The PFI arrangements allowed the government to transfer key risks—such as London, United Kingdom latent defects—to the developer, and to outsource the management of a depreciating asset. www.feildenandmawson.com

COMMERCIAL · WINNER WINNER · COMMERCIAL 29 Project Data

Site Area 2 hectares (5 ac)

Facilities 93,903 square meters (1 million sf) total leasable area

Land Uses office The renovation included the elimination of many corridors (representing 27 kilometers, or 17 miles, Completion Dates of walls), light wells, staircases, and other unproductive space and the redesign of the work areas as flex- July 2002 for Phase 1 ible, modern, efficient office space providing an open and collaborative working environment. The November 2004 for Phase 2 amount of usable space was increased by 25 percent and the number of HMT employees/contractors ac- commodated by the building rose from 850 to 1,200 in Phase 1 and to 3,100 in Phase 2. Other measures Jury Statement taken include the replacement of all 3,150 windows and all doors; the updating of mechanical, electri- The public/private refurbishment of a cal, and telecommunications services; and the installation of artworks throughout the building. Grade II–listed property opposite the EP delivered its brief. Because of the smooth development process, the government is using GOGGS houses of Parliament reintegrates the as a template for future PFI projects. The consolidation and enhancement of this government workplace Victorian era building with its West- minster neighborhood. All 93,903 have contributed to a reduction in staff turnover and sick days and to an increase in productivity. square meters (1 million sf) of office space has been leased back to the government, and the refurbishment of Government Offices Great George Street has emerged as a new model for the development of worker-friendly government office buildings with out- standing design and amenities.

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