London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing

October 2014

HARINGEY N17 LONDON BOROUGH OF HARINGEY Contents

Confidentiality 2

Introduction 3

The Opportunity 4 Future Growth 4 Tottenham Regeneration Programme 4 North Tottenham 6

The Sites 7 Northumberland Park 7 Wood Green 7 Broadwater Farm 7 Smaller Development Sites 7 Commercial Investment Portfolio 7

Public Funding 8 Transport 8 Housing Funding 8

Delivery Solution 9 Joint Venture Delivery Vehicle 9 Potential Structure 9

Questions And Issues For Discussion 11 Working with the Public Sector 11 Residential Development 11 Funding and Delivery 11

Confidentiality

This document has been produced by Turnberry Real Estate Limited on behalf of Haringey Council to engage in a period of soft market testing as part of a wider business planning process.

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 2 Introduction

Haringey Council (the Council) is assessing for both existing and new residents to benefit local working options to accelerate the delivery of a number families, and is looking for innovative solutions to deliver: of sites that will deliver a significant number of • market for sale housing; residential units, across a range of typologies • affordable housing; and tenures, as well as furthering the continued • private rented; economic regeneration of the borough. The • affordable rented; and Council wishes to exploit the value of its assets • estate renewal. to best effect to produce physical, social and The Council is considering including its commercial economic growth, in particular for existing investment portfolio, and potentially a re-provision of its residents of the borough. operational estate, to form part of any approach in order to ensure that maximum value and financial returns are In particular, the Council is considering establishing a achieved. joint venture funding and delivery vehicle to facilitate and accelerate the regeneration and development of these sites. In order to structure the proposition as favourably as Through this initiative, the partnership will help unlock a possible, the Council is undertaking a period of soft portfolio of sites across the borough, supporting housing market testing to explore a variety of key questions before delivery and economic and employment revitalisation, with committing itself to a particular course of action. the potential to deliver in excess of 8,500 homes. This document provides a high level overview of the The Council is committed to establishing a range of housing opportunity and is intended solely to support the soft market tenures within any new developments / regeneration areas, testing process.

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 3 The Opportunity

The Council is driving regenerative Future Growth change and growth across Haringey and is responsible for delivering a number of Haringey is London’s next significant growth opportunity. According to the Halifax House Price large regeneration programmes, including Index, the annual increase to Q3 2014 for average in Tottenham and Wood Green, as well property values in Haringey was 31%. The Council as a significant programme of estate has been instrumental in already securing a £500m renewals. borrowing commitment from Government to kick- start its regeneration. The Council’s core objectives To facilitate the delivery of these large regeneration are aligned to making the borough a standout place programmes and make best use of the Council’s to be, with more jobs, better housing and greater considerable land assets, the Council is keen opportunity. to explore whether it is appropriate to establish a funding delivery vehicle that is capable of Crossrail 2, the proposed new rail line running leveraging the assets to best effect. through London and into Surrey and Hertfordshire, will add much needed capacity to London’s rail Given the scale of the opportunity, it is clear network and support economic regeneration. Boris that any regeneration vehicle will need to attract Johnson advocated the scheme in his 2020 Vision significant investment from the private sector. Proposal - “The question about Crossrail 2 is not As such, the Council wishes to explore the best whether it should happen, but how quickly we can options for delivery structure(s) that will attract get it moving.” The identified route will significantly investment partners and will catalyse and deliver improve the already strong existing transport development and growth across Haringey. connections in the borough.

The Council’s strategic objectives are: The results of the 2013 consultation on Crossrail 2, carried out last year by Transport for London and • The Council wishes to exploit the value of Network Rail, demonstrated considerable support for its assets to best effect to produce physical, Crossrail 2, particularly for the regional route which social and economic growth, in particular for has since been adopted. Research shows that areas existing residents of the borough; close to a planned Crossrail 2 station could see a rise of values of more than 70% by 2030, directly • The Council is committed to achieving mixed enhancing the latent potential of the borough. and balanced communities, particularly in its estate renewal schemes across the borough; Tottenham Regeneration • The Council is very interested in establishing a range of tenures in larger development areas Programme including both high end and subsidised Private Rented Sector (PRS) to benefit local working The Council is delivering an exciting regeneration families; and programme in Tottenham - London’s next big growth opportunity - capable of delivering 10,000 • The Council is considering its commercial new homes and 5,000 new jobs by 2025. The and operational estate to form part of any regeneration programme is guided by the Strategic approach in order to ensure maximum value Regeneration Framework (SRF), which sets out an and financial returns. exciting vision for the future of Tottenham.

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 4

In terms of housing, the SRF sets out the Council’s North Tottenham ambitions for Tottenham to be known as an area with an innovative and different type of London The North Tottenham area sits within the housing market, where home ownership will Northumberland Park Ward. The regeneration and be more affordable and achievable, both for transformation of Northumberland Park has long been existing Tottenham residents and new residents. a priority for the Council- the area is identified as an It also sets out how the Council aspires for new area of significant change in the Local Development developments to offer the opportunity for a range Framework and falls within the Tottenham Area Action of low cost home ownership products (including Plan boundary. shared ownership), subsidised rent schemes for low income households and high quality, secure, North Tottenham is the greatest opportunity in private rented sector housing. Tottenham for large-scale long-term change, both in terms of the quality and mix of housing and the The Council is determined that housing nature and diversity of the employment offer. The opportunities within Tottenham will be known opportunity exists to turn one of the most deprived across London, bringing in new residents and wards in the country into one of the greatest inward investment. opportunities for economic growth in London.

These ambitions are being supported by circa The North Tottenham area spans approximately 30 £300 million of public sector investment in hectares and includes the area west of the High Road, infrastructure in Tottenham. This funding will referred to as ‘High Road West’ and the area east of deliver: the High Road which includes the Northumberland Park Estate and a number of industrial estates. • an intermodal station at Tottenham Hale;

• the three and ultimately four tracking of the West Anglia Main Line

• the incorporation of the Edmonton Green line into the London Overground network;

• the electrification of the Barking Gospel Oak line; and

• improvements in frequency on the Tottenham Hale to Stratford line.

This sits alongside improvements in road, bus, cycle and pedestrian networks which together help to define the scale of the potential across Tottenham.

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 6 The Sites

Northumberland Park Broadwater Farm

The area east of the High Road, which includes the Broadwater Farm is a predominantly residential Council owned Northumberland Park Estate (1,020 estate on a site of 8.46 hectares. There are council and leasehold properties) stretches 23 hectares 1,075 houses currently on the estate of which and sits between the High Road and the Lee Valley 969 (90%) are council tenants and 106 (10%) National Park - London’s largest open space. are leasehold sold under Right to Buy. There are no habitable rooms at ground level due to The Council is currently in the process of securing a high level previous water table issues. Currently the estate is strategic spatial master plan framework for the area. As well as dominated by one and two bed dwellings (80%). setting out levels of development capacity, the strategic master plan framework will establish key principles of change and The Council’s objectives in respect of Broadwater Farm are parameters for any potential redevelopment of this area. It is to undertake regeneration of the area, redress the tenure anticipated that development in this area could deliver between imbalance and range of unit types and therefore alter the 2,000 and 3,000 net additional new homes for London. currently negative perception of the area

Transport links for the area are essentially very good, with links The area presents an opportunity for a large scale via Northumberland Park station direct access to Tottenham Hale regeneration project. The inclusion of surrounding sites (Victoria Line) and Stratford. could assist further in making an even more comprehensive development opportunity. White Hart Lane station is due to become connected to the London Overground Network by 2015. In addition there are frequent and regular bus services to Wood Green, Finsbury Park and Central London. Tottenham High Road is a 5-10 minute walk. Furthermore, Smaller Development Sites there is the potential to deliver a new station at Northumberland Park as part of the proposed Crossrail 2 plans. The Council owns a number of smaller development sites, located throughout the borough, including a significant opportunity in Crouch End. These sites have the potential to Wood Green deliver, in aggregate, more than five hundred residential units.

The Council owns an extensive portfolio of assets in Wood Green town centre, including River Park House Commercial Investment Portfolio and the Civic Centre. The Council’s commercial portfolio comprises 142 Many of the Council’s assets are out-dated and it is recognised assets (offices, industrial and retail) with a portfolio that by consolidating the Council’s accommodation requirements value of £49 million. The portfolio is dispersed across for delivering public services and civic uses over the short, medium, long term that there is the opportunity for the Council to the Borough and comprises predominantly older gain greater working and economic efficiencies. mixed use stock and secondary / tertiary assets.

The quantum of the Council’s land and asset ownerships in Wood The opportunity exists to rationalise the portfolio, including Green, together with the strategic locality of these ownerships releasing some of the assets to yield capital receipts, which and adjacencies to land outside Council control, present a unique should, alongside a more comprehensive asset management opportunity to unlock a significant regeneration opportunity in strategy, should improve the income profile and reduce the Wood Green. management costs.

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 7 Public Funding

The Council has been extremely proactive Housing Funding in leveraging public funding to support its wider regenerative aims and ambitions for The Council is committed to delivering a significant programme of regeneration throughout the borough. the borough. The Council has a proven Details of some of the funding schemes available are track record in securing significant public set out below. funding from a wide range of stakeholders including Central Government, the Homes A £500 million borrowing guarantee is being put in and Communities Agency, the GLA and other place to support housing and transport infrastructure, in addition to a £41 million funding package that has public bodies. been agreed between the Mayor of London and the Council to support regeneration.

Transport A Housing Zone application has also recently been submitted for Tottenham Hale in line with the Tottenham Strategic Regeneration Framework, which To date, significant public investment, totalling circa £300 sets out to deliver at least 10,000 new homes and million, has been identified to improve Tottenham to 5,000 new jobs by 2025. support:

An Opportunity Investment Fund has been established • Delivery of an intermodal / hub station at Tottenham to enable the Council / GLA to acquire sites that might Hale (£20 million); be beneficial for regeneration in the borough, either for land pooling and subsequent sale or acquisition prior • The London Enterprise Panel has contributed to four- to regeneration on the same site. tracking the rail service through Northumberland Park. This is through the Growing Places Fund that has £110 The Council has created its own Acquisition Fund. This million available; is supported borrowing for a rolling £50 million fund, for the Council to acquire key sites, either to develop • The three (ultimately four) tracking of the West Anglia itself or to undertake land assembly. The fund is new Main Line between Stratford, Tottenham Hale and and already has over £5 million committed. Northumberland Park to increase capacity (£72 million); Additional sources of external funding can potentially be made available by the Council to support the wider • Further transfer of some of the West Anglia suburban development and regeneration objectives across the rail services to the London Overground, such as the borough. These could include Affordable Housing Edmonton Green line; grant, Borrowing Guarantees and/or any other new infrastructure funds set up by Central Government / • The electrification of the Barking Gospel Oak line (£90 GLA. million);

• Improvements in frequency on the Tottenham Hale to Stratford line; and

• Improvements to the road network to deliver better connectivity between Tottenham Hale and Tottenham Green (£41 million).

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 8 Delivery Solution

Joint Venture Delivery Vehicle Potential Structure

The Council is considering establishing an overarching A joint venture funding and delivery vehicle could be established joint venture funding and delivery vehicle with a private between the Council and its selected strategic investment partner. sector partner (a strategic funding investment partner). The key principles of the proposed structure are set out below: Sites can then be taken forward collectively or by way of individual delivery mechanisms (site specific), • The vehicle would be established with the specific purpose of beneath the overarching structure. The structure would carrying out regeneration and development in the borough; allow the ability to provide cross funding, if appropriate. • The Council and the strategic investment partner would The vehicle could also provide, or procure, each hold a 50% stake in the vehicle; development management, asset management and fund management services. It is expected that, • The SDV would be established as a long term vehicle, most at a minimum, the vehicle will provide a strategic likely for a period of up to 20 years with the option to renew if development and funding role in taking sites forward. the partners elect to do so after the end of this period;

Residen'al Development Sites

Estate Affordable Private Market Renewal Housing Rented Sector

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 9 • The Council could contribute the investment • Pre-agreed business plans would be determined on portfolio and development sites. A percentage of this establishment of the vehicle for both the vehicle and the would form the Council’s equity stake in the vehicle; site specific proposals. These plans would incorporate the Council’s objectives for the SDV and the sites; • The strategic investment partner would provide funding to match the Council’s equity stake; • Sites will be worked up and taken forward by the vehicle in accordance with the pre-agreed business plans; and • The strategic investment partner could provide (through contractor relationships) asset • Sales receipts are distributed between the partners on management, development management and a pro rata basis in accordance with the agreed equity fund management services and could also provide distributions or recycled to support the delivery of development / contractor services; additional projects.

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 10 Questions and issues for discussion

Working with the public sector Funding and delivery

What is your experience of working in partnership with What will be your approach to funding given the need a Local Authority partner and expectation for patient investment to unlock future value What governance arrangements would you expect from a Local Authority partner when participating in a What is your view on approach to funding multiple formal joint venture schemes with a mixture of tenures / exit strategies across the borough What is your experience of and attitude to OJEU (Competitive Dialogue / Negotiated procedures) What profit / hurdle rates would you typically target – at scheme and investor level

Residential development How would you manage and ensure delivery – at scheme and investor level What are your views on current and future residential values in Haringey How would you align commercial drivers and objectives with other public sector requirements Confirm your approach to modelling growth and inflation assumptions

How important are future transport connections to unlocking development across the borough

What is your experience in delivering large scale mixed tenure residential-led developments

What is your view on PRS as an emerging sector and how would you view this impacting on a long term partnering arrangement

London Borough of Haringey Funding and Delivery Joint Venture Soft Market Testing October 2014 11