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Manx Connections - the Offshore Home of the Elephant’s Developers

Further research as a follow-up to our previous blog post has uncovered some unexpected connections between the Elephant & Castle and the Isle of Man. The Isle is infamous for two unsavoury practices – offshore banking and corporal punishment. Corporal punishment ceased in 1981, but offshore banking remains popular, as does incorporating companies offshore to cane the backside of the British tax authorities. We have several guilty parties at the Elephant and they include the developers of;

  1. Strata Tower was developed and owned by a SPV(Special Purpose Vehicle) company registered on the Isle of Man. Some of the penthouses are also registered to a SPV holding company on the Isle of Man.

  2. Tribeca Square site sold to a company based on the Isle of Man.

  3. Eileen house is developed by a company based on the Isle of Man and which also helps its customers avoid stamp duty by setting up SPV’s on the Isle to buy the finished flats.

Heygate developer Lend Lease’s global corporate structure is too complex for us to see whether it shares its fellow developer’s fondness of offshore companies. However, we have found that its development arm - Lend Lease Residential PLC doesn’t pay a penny in UK corporation tax.

Last year Lend Lease UK’s parent company in Australia recorded an annual profit of over £300m.

Lend Lease has no inhibitions about profiting from public assets though. As well as the Heygate and ‘One the Elephant’ developments - both on public land - it was Lend Lease’s development arm which bought the Millenium dome plus 150 acres of Greenwich Peninsula for the princely sum of just £1. It built the Olympic Village with the help of hundreds of millions in public funding, and has used more former public land for a £1.3bn scheme at Stratford.

We are about to get into a fresh range of ‘consultations’ for several major developments, including that for the shopping centre, and will no doubt hear the usual claims about the benefits they will bring to the community - the developers have to secure vital planning approvals, after all. The first condition of planning approval should be that the developer will not suck all the financial reward, not just out of the Elephant, but out of the country.

Aylesbury Regeneration - social rent or affordable rent?

Southwark Council has just signed up Notting Hill Trust as its development partner for the Aylesbury estate regeneration and this week saw an article in the Evening Standard praising the regeneration plans for not following the bad example of the Heygate. While we agree that the plans do look better on paper - half of the 3,500 new properties will be ‘affordable’, of which three-quarters will be for social rent – a small alarm bell has been rung by the language used in the regeneration documents to describe the social housing element. In the legal agreement for the most recent phase of the Aylesbury redevelopment site 7, the definition of ‘social rented’ worryingly refers to the HCA definition of Boris’s ‘affordable rented’ housing product of up to 80% market rents:

Also, there is no reference to the National Rent Regime in site 7’s legal agreement. This is the regulatory framework which decides the level of social rents based - among other things - on the average level of income, and it is standard practice for definitions in these legal agreements to include a reference to the National Rent Regime. Below is an example of the wording normally used in a standard legal agreement used for securing social rented housing:

So the worry is – what will the rent be for the new social housing? A social rent in the Aylesbury’s SE17 area is currently about £115 pw for a 2-bed flat; on the other hand one of Mr Johnson’s ‘affordable rents would be way beyond this at around £240pw if it were at 80% of market rent.

FOI appeal update

Apologies to those who have been following this appeal and were expecting a decision from the Information Tribunal last week. Unfortunately the decision has been delayed once again and is not now expected to be released until the end of May. We will keep you informed as and when we manage to find out more details on this.

Is there a doctor in the house?

Regenerations provide homes, jobs, new trees etc but a serious side effect can be self-delusion; symptoms include a tendency to ignore or mangle the facts and wishful thinking. It can strike anyone after long exposure to the regeneration industry, but those most at risk include councillors, council officers and, unfortunately, architects. A recent sad case has just come to our attention. It concerns a Mr P, senior architect and masterplanner of the New Heygate. The symptoms of his condition are manifested by confusion over numbers, a hazy recollection of past events and an inability to appreciate the effects of his actions on others. Mr P’s delusions (see here – http://youtu.be/a-W6wwVj5dA and http://youtu.be/vyQyt0T1Iho) include the belief that only 800 people were forced of the Heygate estate to make way for his masterplan (it was nearer 3000); that they all moved into new homes on early housing sites (they didn’t because none had been built), that 83% of them agreed to this ‘through the democratic process’ (they didn’t, because here was never any ballot, still usual in democracies); that they can even now return to the New Heygate (they can’t, because Mr P’s new homes will be too expensive, whether you’re an ex-tenant or ex-leaseholder). Unfortunately facts are seldom a cure in such serious cases, but these may prevent Mr P’s condition becoming contagious, and we nonetheless remain hopeful for his speedy recovery.