Earls Court: Hammersmith & Fulham leader repeats call for return of estates as Capco seeks ‘third party capital’

Earls Court: Hammersmith & Fulham leader repeats call for return of estates as Capco seeks ‘third party capital’

More than six months since Hammersmith & Fulham Council knocked back the idea of a new and bigger masterplan to rev up the glacially slowgoing Earls Court redevelopment scheme, has there been much forward motion? Answer: not really. But there have been a few stirrings of note.

The latest takes the form of a letter from the council’s Labour leader Stephen Cowan to residents of the adjoining West Kensington and Gibbs Green housing estates. These were earmarked for demolition when the giant scheme was given permission by a prior Conservative administration in 2013 and are currently subject to a conditional land sale agreement (CLSA), whereby sections of the estates would pass into the hands of developer Capital and Counties (Capco) as and when it provides replacement homes for those knocked down.

Cowan wrote to estate residents last November, saying that should a new masterplan go ahead, it “would see the two estates return to council control”. But although that masterplan was rejected in January, Cowan’s new letter says that on 2 March Capco’s chief executive Ian Hawksworth, “told the Council that the Capco board had agreed that it is in the best interest of both Capco and the Council to return the West Kensington and Gibbs Green estates, Gibbs Green School [a separate site on the latter estate] and Farm Lane [a separate site nearby] to the Council”.

Cowan adds: “I have written to the Capco board urging them to stick to to this statement and do so quickly.” He also says that in return for cancelling the CLSA the council would reimburse Capco for cash already handed over and could do so “with ten days’ notice”. The council says that Hawksworth made his remarks at a private meeting at the Town Hall. A spokesperson for Capco has issued the following measured response to Cowan’s letter:

The London Borough of Hammersmith and Fulham have expressed interest in pursuing alternative options for the estates. Capco continues to engage with LBHF and other stakeholders in relation to future plans for the estates. In the meantime, the Conditional Land Sale Agreement, a binding agreement entered into with LBHF in relation to the estates in 2013, remains in place.

This latest communication from Cowan to those living on he “People Estates”, as the long-running anti-demolition campaign has dubbed them, was made two days after Capco’s interim financial results – for the six months ending 30 June 2018 – showed it had knocked £52m off the value of the Earls Court scheme, taking it down to £707m. This followed a £131m reduction in February. In 2015 it was reckoned to be worth £1.4bn.

A combination of falling demand for the most expensive new “prime” properties in Central London, stamp duty changes and Brexit-related uncertainty are blamed for the bulk of the Capco project becoming becalmed, including the site of the now-demolished Earls Court exhibition centre buildings, which were supposed to give way to a new urban “village” through a joint venture with Transport for London. Capco owns most of the company, TfL owns the land, through which runs a weave of Underground and other rail lines. The interim results report says that Capco with TfL will seek “the introduction of third party capital” to help them build things there. The site has stood empty for some time.

In May, Capco said it is looking to separate Earls Court from Covent Garden, its other big London asset, which continues to be profitable. The company has sold off the Empress State building, a high rise office block – and originally a hotel – at the edge of initial masterplan area which it had bought with a view to converting to residential use within the larger scheme. The buyer was the Mayor’s Office for Policing and Crime, which had previously leased it. That brought in £250m.

The interim results also say that most of the flats in the Lillie Square section of the project, a joint venture with interests of the troubled Kwok family that received its own planning consent in 2012, have now be sold. Some of the intended replacements for homes lined up for levelling on Gibbs Green and West Kensington were planned for a part of Lillie Square. The interim report says that “basement works” for some of these have been completed to “facilitate the first phase of replacement housing”. If and when such a phase will actually occur remains to be seen.

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