Kings Crescent and Alexandra National estates

Sunday, January 20, 2008

Kings Crescent and Alexandra National estates

We are writing with some disappointing news regarding the regeneration plans for these estates. Regular readers of our reports may recall that back last March we appointed new partners to take these forward. In both cases the preferred partners were developers Durkan Ltd with the Metropolitan and Community housing associations potentially providing the social housing.

We began to consult residents on the future shape of their estates, while “behind the scenes” our financial and legal teams attempted to negotiate what’s termed the Principal Development Agreement. Unfortunately while the consultation with residents went well, it was not possible to agree a PDA.

In our view there two main problems. One was that the consortium wanted to be allowed to make an 18% profit on the social housing alone, while national guidance recommends 10%. The other was that they wanted a significant number of interim review tests. These are points at which they can review the financial viability of the schemes and walk away if they do not forsee sufficient profit. Given the past history of KC in particular, we were not prepared to agree to the number of review points they wished.

The result was that negotiations were formally concluded last week, and that that consortium – MetComm Futures – will no longer be involved.

The reserve consortiums appointed for each estate have now been contacted, and both have confirmed that they remain keen to be involved. New plans will now be worked up for both.

Residents are being informed via the attached letter.

Obviously it is deeply disappointing for us and them that this has occurred. It will result in at least a nine month delay in the planned reconstruction. On the positive side however –
* the centre of Kings Crescent has been cleared with the derelict buildings demolished and the area temporarily available for some extra parking and a football pitch
* everyone on KC now has individual central heating, compared to the previous unreliable communal system
* Alexandra National has been emptied and secured
* a draft PDA is complete which should make negotiations with new consortia quicker and easier

We will do our best to keep you informed as things develop.


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