Agenda item

Appendix 2 to the report is in the private business section of the agenda at Item 18.

The Cabinet Member for Regeneration and Social Housing presented a report on redevelopment proposals in respect of land at the junction of London Road and North Street, which was a significant gateway entrance to Barking Town Centre.

The Cabinet Member explained that the former White Horse public house site was owned by Robyna Limited and had remained boarded for a number of years, while the Council owned the adjacent site that was currently being used by Transport for London as a bus layover facility.  A range of options for the area had been considered, including the Council developing its part of the site in isolation or seeking to compulsory purchase the land owned by Robyna Ltd, with the latter option discounted in view of Robyna Ltd’s desire to deliver development which would significantly weaken any case for the Council to use compulsory purchase powers.  Therefore, Be First had been in ongoing discussions with Robyna Limited regarding the potential for a comprehensive, residential led redevelopment scheme across the combined sites, which had resulted in outline plans for the construction of 164 built-to-rent units, 35% of which would be affordable (35% discounted market rent), with some commercial space on the ground floor of the development. 

Under the proposed arrangements, the Council would acquire the freehold ownership of the Robyna site and grant a 250-year head lease (plus 3 years for the development period) for the combined site, subject to the payment of an agreed head rent.  Agreements would be entered into and a joint planning application submitted in late 2018, with construction planned to commence during 2019 and completed in 2021/22.  The Council would retain termination rights in the event of the development failing to complete or default by the developer and it was also noted that appropriate due diligence had been carried out with regard to Robyna Ltd and Yara Capital, its asset manager in the UK.

The Cabinet resolved to:

(i)   Agree to enter into necessary agreements with Robyna Ltd to enable them to develop a residential-led development on land owned by both the Council and Robyna Ltd, upon satisfaction of various conditions precedent; whereby the Council would acquire the freehold ownership of the Robyna Ltd site and grant Robyna Ltd a head lease on the combined sites for250 (+3 for construction) years subject to the payment of a head rent and all subject to appropriate due diligence;

(ii)   Approve a loan of up to £35m to Robyna Ltd based on the terms set out in Appendix 2 to the report, with the borrowing to be funded through the General Fund from the Public Works Loan Board;

(iii)   Delegate authority to the Chief Operating Officer, in consultation with the Director of Law and Governance and the Cabinet Member for Regeneration and Social Housing, to agree the final terms of the loan and the contract documents to fully implement and effect the proposals set out in the report; and

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