Decision details

The Cabinet will be asked to consider and approve proposals for a loan to Benson Elliot, who hold a long lease for the Vicarage Field Shopping Centre site which is owned by the Council, on commercial terms for an initial three-year period to facilitate the development project to be led by Benson Elliot.

The Cabinet Member for Economic and Social Development introduced a report on the proposed terms of a loan facility to Lagmar (Barking) Limited, a wholly owned subsidiary of Benson Elliot Real Estate Partners IV LP, to facilitate the redevelopment of the Vicarage Field site in Barking Town Centre. 

The regeneration plans for the site included 855 residential units, a 150-room hotel and 350,000 sq.ft. of retail, leisure and public service space.  Discussions, led by Be First on behalf of the Council, had identified the potential for the Council, as freeholder of the site, to provide funding to Benson Elliot, who held a 99-year renewable head lease for the site, to take the project forward, in line with the Council’s Investment and Acquisition Strategy objectives. 

The report set out the proposed commercial terms of the loan facility, which would generate additional annual revenue to the Council of circa £1.2m in the first three years in the form of a contribution to Be First’s income target, and the steps needed to take the project forward.

The Cabinet resolved to:

(i)  Agree borrowing of up to £35m from the Public Works Loan Board within the General Fund to facilitate the redevelopment of the Vicarage Field site in Barking Town Centre, as set out in the report;

(ii)  Agree to lend £35m to Lagmar (Barking) Limited, a wholly owned subsidiary of Benson Elliot Real Estate Partners IV LP, substantially on the terms set out in paragraphs 2.15 to 2.21 of the report;

(iii)  Agree that Be First, as agent for the Council, lead the negotiations in respect of the loan facility, including appointment and management of commercial, financial and legal due diligence advisors, with Benson Elliot Real Estate Partners IV LP;

(iv)  Note that detailed negotiations shall be supported by a team of financial, commercial and legal advisors appointed to advise Be First and the Council on the proposals, the Council’s costs in connection with the loan to be reimbursed by Benson Elliot Real Estate Partners IV LP;

(v)  Delegate authority to the Chief Operating Officer, in consultation with the Director of Law and Governance and the Cabinet Members for Finance, Growth and Investment and Economic and Social Development, to scrutinise the due diligence reports, negotiate terms and agree the contract documents to fully implement and effect the proposals set out in the report; and

(vi)  Authorise the Director of Law and Governance, in consultation with the Chief Operating Officer, to execute all the legal agreements, contracts and other documents on behalf of the Council.