Park Royal and Old Oak Common: Why Cargiant claims the ‘Canary Wharf of West London’ will never be built

Park Royal and Old Oak Common: Why Cargiant claims the ‘Canary Wharf of West London’ will never be built

Sadiq Khan’s City Hall calls it “the UK’s largest regeneration project” and it was hailed as a future “Canary Wharf of the West” under Boris Johnson. But last month, the largest private landowner within the 1,600 acres of Old Oak Common and Park Royal, where this vast new piece of London is intended to take shape, loudly and publicly slammed the mayoral body set up to deliver it.

Cargiant, a major second hand vehicle sale and refurbishment firm employing 770 people, called for a “full inquiry” into the strategy of the Old Oak and Park Royal Development Corporation (OPDC) and claimed its financial calculations for the project “just don’t add up”. It said the OPDC will get nowhere near delivering the 25,500 new homes and 65,000 new jobs it has been promising and for that reason the government should not give it the tidy sum of £250 million of public money it had asked for to help it on its way.

Managing director Tony Mendes spoke plainly: “This is an absolute scandal and Old Oak Common is fast becoming known as Old Oak Cock-up”. Strong words, they brought a strong response from City Hall. “These comments are barely worth the paper they are written on,” was one reported response. Another was more diplomatic but also more pointed: “The Mayor is disappointed Tony Mendes is looking to frustrate a project that will deliver tens of thousands of much-needed homes and jobs”.

The row continued in Estates Gazette, where OPDC chair Liz Peace stuck to her target numbers and enthused about “the largest and perhaps the most exciting mixed use regeneration programme in the UK”. She said that she and the OPDC are working cooperatively with local landowners and business to that end. But Mendes scorned this as “barely credible”. He asserted that, on the contrary, the OPDC bid for the £250 million of government money “is based on utilising land which we own and which is essential for the operation of our business”.

It is therefore unsurprising that Mendes did not greet with delight last week’s announcement by Chancellor Philip Hammond that the £250 million has indeed been awarded to the OPDC. And while government, the Mayor and the corporation said the money would prepare the ground for 13,000 of the new homes it says will be built, Mendes retorted that “it does nothing of the sort”. What makes him so sure?

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To understand this row it helps to grasp how important to the OPDC vision the land Cargiant occupies is and the size of the task of transforming it. Neither Park Royal nor Old Oak Common are as leafy as they sound. The first covers the western side of the regeneration area. It contains around 1,700 businesses, notably food manufacturers, and has been described as “the bread basket of the capital”. The largest area of formally designated strategic industrial land in the city, Park Royal currently employs about 43,000 people. The Mayor says he wants to strengthen and “intensify” it through the OPDC, increasing job capacity by 10,000 and also building 1,500 homes there.

On the eastern side of the regeneration area, Old Oak Common is no sylvan enclave either. Bisected on its east-west axis by the Grand Union Canal, it is threaded with railway tracks and sidings. A recent addition to the landscape to the south of the canal is a Crossrail depot, where over half of the Elizabeth Line trains will eventually be stabled. Also in what has come to be called Old Oak South is the site of the forthcoming High Speed Two (HS2) station, images of which were released by the government on 5 February. The prospect of what will be called Old Oak Common station being put there is what led to the OPDC area being identified as a regeneration zone in the first place – rail investments are big catalysts for wider development. It has been billed as an interchange of similar size to Waterloo, a “superhub” as the government calls it, connecting Heathrow, Central London, Birmingham, Manchester and Leeds.

Greeting publication of the designs, Liz Peace underline the case that the planned HS2 station represents an opportunity “to create a vibrant new quarter of London that will bring jobs, housing and a whole new social infrastructure” for the benefit of local people and newcomers alike. It is, after all, in Old Oak, on both sides of the canal, that the brand new London neighbourhood and the vast majority – 24,000 – of the new homes are pledged to be. But it was just two days later, on 7 February, that Cargiant went public with its objections to what the OPDC is promising and the way it has been going about its work. In jarring contrast to all the upbeat assessments, the company painted a picture of slow progress, recurring ineptitude, fanciful predictions and poor treatment of itself at the OPDC’s hands.

Though situated in Old Oak North – the area north of the canal – some of the company’s displeasure was directed at the plans for Old Oak South. Alarm about these had already been expressed by veteran architect and city planner Sir Terry Farrell. In March 2016, Sir Terry, who had previously conducted an assessment of Old Oak’s development potential for Hammersmith & Fulham Council, pointed out that construction of the Crossrail depot had failed to make provision for it to be decked over at a later date, creating space for offices and homes to be built above it. In his view, this showed a lack of foresight under Mayor Johnson, which risked turning the wider project into London’s “worst cock-up in 50 years”. Cargiant cited Sir Terry saying it could cost £1 billion to get the depot moved somewhere else and claimed that the OPDC had “accepted that the development at Old Oak South could not happen” as a result.

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However, the company’s most detailed and urgent critique was of the OPDC’s approach to Old Oak North, where it is situated. There had been a tense build up to this. A letter from the OPDC’s lawyers to Cargiant’s, sent earlier this year and seen by On London, reveals a wrangle over OPDC proposals to build a road, at that time to be called Park Road, whose route would impinge on Cargiant-owned land. As the planning authority for the area, the OPDC has the option of using compulsory purchase powers (CPO) to take ownership of land it wants. Concerns had been expressed by Cargiant that land taken from it to make way for the road, along with additional space for future building, would have a serious impact on its operations. The OPDC’s lawyers maintained that the impact would be minimal. However, the same letter stated plainly that the OPDC had yet to undertake a detailed assessment of Cargaint’s operations as a whole. The letter went on to say that the OPDC did have information about these matters that Cargiant itself had provided. But for Cargiant that wasn’t good enough.

On 4 February, Cargiant’s owner, Geoffrey Warren, wrote to the Ministry for Housing Communities and Local Government (MHCLG). This is the department to which the OPDC had made its bid for the £250 million, a substantial portion of the government’s housing infrastructure fund (HIF). Cargiant had not been able to see the bid document – or, to its annoyance, play any part in compiling it – but had already advised the MHCLG that it did not believe it could possibly meet the necessary requirements to succeed. Warren restated this point in his letter, and added:

“In view of the consequences for Cargiant, we would have no option but to challenge the process being undertaken by the OPDC to deliver these plans and seek to hold it transparently to account, at every legitimate stage.”

He continued:

“It cannot be right that such an important and long-standing major business – built-up over 40 years and directly employing over 700 local skilled workers – faces potential closure when a basic and fundamental assessment of the impacts of the proposals has not taken place. Such an assessment should have taken place with informed talks with Cargiant when the original bid was contemplated.”

Warren went on to explain that Cargiant has suggested to the OPDC an alternative route for Park Road, designed for it by engineering giant Arup. He assured the MHCLG that this would “enable the successful delivery of early infrastructure without significant impact on our business operations” although he claimed that adopting the alternative route it would also entail the OPDC submitting a completely fresh HIF bid. As we now know, the department was not persuaded by this argument. The OPDC has, however, said that it will give the Arup alternative consideration.

However, Warren’s argument to the MHCLG went wider than the alignment of the proposed Park Road. In his letter of 4 February he maintained that:

“Even if the delivery of Park Road were to be facilitated through joint working with Cargiant, we believe the costs of developing the Cargiant land to be prohibitive and that such development is extremely unlikely to be capable of being delivered without enormous further public subsidies that simply cannot be justified”.

He continued:

“In such a scenario it is wrong to lose further important local industrial land, especially when so much has already been lost to residential development, causing unprecedented price rises in both land and rents.”

Warren said that the designation of Cargiant’s site for regeneration had already caused it to put on hold plans to enlarge its business by investing in new facilities to enable 24-hour working and “create many hundreds more jobs” – an expansion that would demand no money from the public purse at all. And he went on to cast doubt on the OPDC’s objective of intensifying industry in Park Royal, saying the many businesses there had no interest in helping it happen. He was, effectively, contending that pretty much the whole basis for Old Oak Common and Park Royal being subjected to a full, public body-led regeneration was hugely flawed and that putting further public money into it would be a complete waste. He signed off by giving notice that Cargiant felt it had “no option but to now put this issue fully in the public domain”.

That duly happened three days later. The heading of a lengthy press release reprised Sir Terry Farrell’s comments of 2016 – “Old Oak Cock-Up”. In it, Cargiant said that although “small scale development at the fringes of Old Oak North would be possible” it bluntly stated that a “comprehensive scheme” taking in Cargiant land “cannot be delivered”. It stressed the complexities of delivering the infrastructure necessary for creating a residential neighbourhood in Old Oak North: not only will new roads be required, the canal and the railway lines would need to be bridged; the land there is undulating and contaminated, adding to the difficulties and, therefore, to the expense. To these financial strains it added Mayor Khan’s and OPDC’s policy that 50 per cent of the homes delivered across the OPDC area as a whole should meet the Mayor’s definition of “affordable”, the point being that the more affordability any housing scheme has to provide, the less money is likely to be available to pay for the things that are needed to make a residential area function – transport links, utilities, community amenities and so on. And on top of all this would be the cost of the removal of Cargiant from its land in the first place.

As the aerial photograph above shows, Cargiant is well named. There is a lot of it: a large mosaic of factory workshops, offices and parking spaces. For a brand new residential neighbourhood to be built in its place, the whole lot would have to be knocked down and cleared. That of itself would cost plenty of money. In any case, Cargiant does not want to disappear, and re-locating the business would cost plenty of money too, if were that practical. As Warren stressed to the MHCLG, the price of land for industrial use has been rising and Cargiant currently has no site lined up elsewhere that it could move to.  Warren said in his letter that should suitable land to relocated to be unavailable, the business might well end up being shut down – “extinguished” is the official term – by the OPDC using CPO. It says the price of either a theoretical relocation or extinguishment has been estimated at £600 million. Add that to the taxpayer’s bill, the company argues, and the OPDC’s vision of a fine new London district is plainly unviable, however that word is defined.

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The OPDC’s view of the project is, as you’d expect, very different. But before getting on to that, there’s a bit more backdrop to Cargaint’s displeasure to sketch in.

Boris Johnson’s vision for the area began to take shape back in 2013. He set up the OPDC two years later under the chairmanship of his deputy mayor for planning, Sir Edward Lister. Cargiant, knowing that its future had been thrown into flux, decided to take the initiative. If its premises were going to be knocked down and something built in its place, why not try to become the builder?

In partnership with developers London and Regional Properties, the company came up with proposals for redeveloping its site into a residential neighbourhood called Old Oak Park, which aspired to producing thousands of the new homes Mayor Johnson had envisaged. It factored in meeting the expense of relocating Cargiant. The company (quite literally) began preparing the ground for such a move by assembling land elsewhere in West London outside the OPDC area, starting in 2015. It says it made substantial progress towards putting enough to together to create a new Cargiant home.

The Old Oak Park plan progressed further than number crunching and some nice CGIs of a high density settlement rolling back from the north bank of the canal. Its evolution involved ongoing, regular discussions with the OPDC of that time within a formal planning performance agreement and a series of public consultations, the fourth and last of which took place in July 2016. Published feedback suggested a favourable response from local people and community groups. The final version was for a development of 6,500 new homes, commercial spaces with scope for 8,000 new jobs, a “cultural quarter”, a primary school, health and community facilities, a new High Street and a new London Overground station to be called Hythe Road.

But that was as far as the Old Oak Park scheme got. By the time of that fourth and, as it turns out, final consultation exercise, the OPDC landscape was already changing. Two months earlier, Sadiq Khan had succeeded Johnson as London Mayor. Johnson’s departure from City Hall also meant Sir Edward Lister’s departure as OPDC chairman. In June 2016, as part of a broader stocktake of what he had inherited from his Conservative predecessor, the Labour Mayor Khan ordered a review of how the OPDC programme was progressing. In November he declared on the strength of the review’s findings that Johnson had left things in “a mess”. He drew particular attention to a signed understanding that had been reached with the government over the transfer of public land, which he said represented a bad deal for London. The review also recommended that Transport for London conduct “a thorough options appraisal for repositioning or retrofitting the Crossrail depot” and the appointment of a new OPDC chair.

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Map of Old Oak North land ownerships

Liz Peace became that replacement, though it was not until March 2017 that the new Mayor named her as his choice. By then, Cargiant had published findings of its final public consultation. But in May 2017, the OPDC appointed a new masterplanner, AECOM, to put together a new delivery plan for a 30-plus year period and a draft Local Plan, focussing on Old Oak North. And by the end of the year, it was pretty clear to Cargiant that the new OPDC under the new Mayor was not going to support its Old Oak Park scheme. In late 2016, the corporation had appointed leading consultants GL Hearn to assess the plans’ financial viability. A draft initial appraisal produced in August 2017 concluded that it fell short – the projected profits from the scheme were judged insufficient to meet the share of the cost of the transport and other infrastructure and the “affordable” housing that Cargiant would be required to contribute as a condition of being granted planning consent.

Negotiations about these things are completely normal between developers and planning authorities. But Cargiant contends it was never given a fair chance to make its case. It says that, despite having worked with the Johnson era OPDC when putting the scheme together, it wasn’t told by the Khan era OPDC until November 2017 that all previous assumptions about the infrastructure needed had been changed. The company also complains that GL Hearn’s final report wasn’t shared with it until July 2018, even though it had been presented to the OPDC five months earlier. The previous month, the latest draft Local Plan for the whole OPDC area had been published. The Old Oak Park scheme is now dead and the upshot of all this, according to Cargiant, is that a “narrow window” during which the development of its site and its business relocation could have got underway has now closed. It says it has spent £8.5 million on working up what it considered a very good scheme that would have delivered good results for all concerned. Nonetheless, it calls itself “a reluctant developer”. It is now a thwarted and fed up one too.

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So where does the OPDC stand on all of this? Liz Peace CBE is a considerable figure in the world of real estate, a former chief executive of the British Property Federation, chair of the Government Property Agency, chair of trustees of think tank Centre for London, and a member of Mayor Khan’s Homes for Londoners board. Speaking to On London a couple of weeks before the government took its decision about the £250 million of HIF money, she did not accept Cargiant’s uncomplimentary characterisation of the state of play with Old Oak and the rest of the regeneration programme. She had already written in Estates Gazette that the HIF money would enable a “public-led intervention” to “give the Mayor and OPDC the certainty that up to 10,000 new homes and 5,500 new jobs would be delivered for Londoners by the early 2030s” as a direct result and described Cargiant’s approach as “disappointing”.

Asked to address some of Cargiant’s criticisms in more detail, she described the concerns raised about the Crossrail depot as a “red herring” in the sense that what’s done is done and complaining about it now is a distraction. “It is in the way, but it’s going nowhere and we can get round it,” she said. “Decking over it would cost £1 billion. It won’t be decked over or moved elsewhere unless a developer is prepared to find the cash. We deliberately haven’t started on Old Oak South precisely because the HS2 station is getting underway there. That puts it out of bounds for the next eight years.”

She said the presence of Cargiant north of the canal puts its 46 acres out of bounds too, at least for the time being, but public land to the north of Cargiant is already accessible. Peace has told told Mayor Khan that the provisional terms for its transfer agreed under Mayor Johnson had actually been OK. Now, with the HIF money becoming available, it is entirely logical for the OPDC to concentrate its initial efforts there. These will open up that section of Old Oak North for the first of the 10,000 homes it has in mind (the government’s mention of 13,000 reflects hopes that the same “unlocking” process will eventually pace the way for a further 3,000 close by).

Eventually, though, further progress towards the 10,000 depends on Cargiant vacating the necessary space. Peace described Cargiant as “a fabulous business” and characterised Geoffrey Warren’s producing the rejected Old Oak Park plan as admirably enterprising: “They will want my land, here’s an opportunity for me.” But she stuck to the OPDC view that that plan didn’t stack up financially. “It had some flaws. It needed a lot of infrastructure and the problem was that they assumed a lot of it would be provided by someone else”. Who might that someone else be? Could Transport for London pay for the new Overground station? Peace pointed out that TfL at the moment doesn’t have much cash to spare. As for the wrangle over the road, she mentioned Cargiant’s alternative route suggestion and said she was “hoping for a negotiated outcome”.

What about Cargiant’s more general complaints about the OPDC in the last couple of years? Peace accepted that there had been “a bit of a hiatus” with the change of Mayor and that, of course, the recruitment of new masterplanners meant that some previous assumptions about how the new neighbourhood would take shape changed. She acknowledged that the 50 per cent affordable policy makes the housing finances “challenging” but that the Mayor had introduced it “for good, sound reasons” and that, with the help of some grant funding, the challenge can be met. She also stressed that nearly 4,000 homes in other parts of the regeneration area have already been completed or started, with planning approval for nearly 6,000 more granted or on its way.

There had been a long wait for a decision about the HIF bid, which was submitted to the government last September. Peace described the wait as “a source of huge irritation”. But now, at last, the money has been awarded, and she greeted this public sector funding as “fundamental to meeting the Mayor’s ambitious housing targets” and as making “economic sense” that “sends the right message to the market” and will “unlock opportunities for public and private sector collaboration”. The money has to be spent by March 2023. OPDC says it will begin by getting utilities, drainage and an energy centre put in, along with the “early construction of Union Way”. It turns out that Union Way is a new name for the contentious Park Road – Hammersmith & Fulham turned the name Park Road down for being the same as or similar to other streets in the borough.

For Peace, the government’s decision is another step on a long, ever-changing regeneration journey that will take 30 years or more to complete. Old Oak Common station is a beacon on her horizon: “We can now kick start that northern arc of land and by the time that’s done HS2 will be there. That will create more viability and I will be banging on investors’ doors, if they are not already banging on mine.”

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Where does Cargiant fit into that prognosis? The OPDC still wants the company’s land redeveloped eventually because it remains fundamental to delivering its plans for Old Oak North. But Cargiant’s stance now is that this has become financially impossible. The draft Local Plan for Old Oak North includes a table (on page 46) showing how many homes would be built on the land of each landowner in the area during the 20 year life of the plan and beyond. It allocates 5,300 in total to Cargiant’s land and a further 900 to the spaces occupied by two business centres adjoining it, which Cargiant owns. So that’s 6,200 homes that will not, in reality, ever be built, according to Cargiant.

Before the HIF bid was accepted, the company called for an inquiry into the OPDC’s fitness to spend £250 million of public money wisely, given what it crossly termed “their track record of appalling waste and failure”. After the bid succeeded, Tony Mendes said that any use of CPO powers “to take operational Cargiant land” would be challenged every step of the way. In October, the Local Plan was submitted to planning inspectors for examination on behalf of the MHCLG. Next month, the examination process will move into its public hearings phase. Big regeneration programmes are long distance events. A great deal can happen and change along the way, including market conditions, national governments and London Mayors.

They also entail compiling a sort of social and economic balance sheet, with many factors to be weighed on either side. There will aways be losers as well as winners, and there will always be arguments about the balances struck between them and what outcomes represent the overall greater good. A cynical view is that Cargiant has simply moved into a new, hard bargaining phase of its response to its predicament with the ultimate goal of forcing the best financial result for itself that it can get. But if so, what would you be doing if you were them? Meanwhile, Liz Peace has set out her position followed the success of the HIF bid. “We’re keen to make sure that operating businesses are not negatively impacted wherever possible,” she says. “OPDC is committed to working constructively and flexibly with all landowners, and we look forward to future meetings and discussions.” There won’t be any shortage of those.

Categories: Analysis

1 Comment

  1. Mo hirani says:

    OPDC should NOT be allowed to waste anymore taxpayers money. They will not be able to deliver affordable homes and jobs they keep mentioning. Cargiant are big and well established company, and are a very important part of the local community. Myself and all my family and friends have been buying cars from Cargiant for more than 25 years and will carry on doing so.

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