Silvertown Quays, Royal Docks

Concepts

• silvertown quays
• urban development
• silvertown partnership llp
• royal docks
• development partner
• mixed use development
• construction work
• june
• master development agreement
• brownfield site

Location

London

Description

Silvertown Quays (SQ) is a 50-acre brownfield site in Royal Docks, London owned by GLA. In June 2013, following a procurement for a development partner for a mixed use development at SQ, GLA entered into a Master Development Agreement (MDA) with the developer, The Silvertown Partnership LLP (TSP).

Ammendments to Previous Notice

Award Detail

CPV Codes

• 45211360 - Urban development construction work

Indicators

• Contract modified due to unforeseen circumstances.

Legal Justification

Reg. 72(1)(c) of the PCR 2015 applies for two reasons.First, Mayoral planning policy was changed by the draft new London Plan in December 2017 and the adopted London Plan 2021. This now sets a strategic target for public sector landowners to deliver at least 50% affordable housing on each site and across their portfolio. Second, changes and delay have been driven by the unforeseeable Covid-19 pandemic. Delay was caused by direct impacts such as staff illness and caring responsibilities. Also, the Developer introduced the following measures to respond to the change in circumstances: • re-phasing to delay launch of open market sale housing; • diversification of asset classes, including uplift from 20% to 50% AH, and introduction of Build to Rent housing and light industrial commercial space; • reduction in residential and commercial revenue assumptions; • increase in developable area; and • re-design of planning-approved assets to accommodate post Covid19 use demands.

Other Information

Continued from section VII.2.1 below: Sub-Phases 1. The MDA divides the Scheme into Phases. Each Phase will now be divided into Sub-Phases, each Sub-Phase comprising at least two Plots (independent buildings). GLA intends to pre-approve the Sub-Phases for Phase 1, which will enable Sub-Phase 1.1 to be brought forward under the existing outline planning permission. The use of Sub-Phases for future Phases will require GLA’s approval under the MDA. Where a Phase has been divided into Sub-Phases, the conditions that need to be satisfied under the MDA for TSP to commence works and draw down a Headlease interest will need to be met in relation to the relevant Sub-Phase rather than the Phase as a whole. The Headlease premium will continue to be calculated on a whole Phase basis and will be payable on drawdown of the first Sub-Phase Headlease. Overage will still be calculated on a Phase basis following completion of the final Sub-Phase. Phase-related Milestone Events will still generally apply to the Phase as a whole rather than each Sub-Phase. Conditions 2. Funding Condition: GLA is to clarify the evidence it will require to satisfy the Funding Condition under the MDA. Where Phase 1 has been divided into Sub-Phases, the evidence of sufficient and available funds from committed sources to construct all of the works within Phase 1 will be satisfied by TSP demonstrating that funding is in place for at least one plot in the first Sub-Phase and that a funding strategy is in place for the rest of the scheme. 3. Headlease Grant Conditions: One of the conditions to the grant by GLA to TSP of the Headlease for Phase 1 in the existing MDA is that the Developer has either made a “Substantial Commencement of Works” or that the “Phase 1 Pre-let/Occupancy Condition” has been satisfied. The schedule of “Milestone Events” in the MDA referred to satisfaction or waiver of the Pre-let/Occupancy Condition. The parties intend to record that this condition has been waived. In relation to the Substantial Commencement of Works condition, rather than requiring £2.5 million of expenditure by the Developer on qualifying costs relating to the relevant works, the amended MDA allows GLA to approve another sum (in GLA’s absolute discretion) which allows the £2.5 million figure to be adjusted to reflect the introduction of Sub-Phases. Brand Pavilions 4. One Development Objective in the MDA is the creation of an avenue of Brand Pavilions (BPs). The MDA will now require a cluster rather than an avenue. In addition, the MDA requires TSP to obtain GLA's approval if the number of BPs is to be reduced to fewer than 15. GLA will approve a minimum of 5 BPs. 5. TSP is obliged to include at least 66,750 sq m of BPs in the Scheme. The Minimum Requirements for BPs in relation to Phases 2 and 3 will be amalgamated (the aggregate requirement for those Phases remaining the same) and education, manufacturing, logistics and performance will be added to the list of potential primary uses. Other Minor Changes 6. GLA will confirm that the only dock wall works required in Phase 1 will be those within the Phase 1 boundary, not wider dock wall works to other areas. 7. GLA will support TSP in reaching an agreement with the Royal Docks Management Authority for in-filling Pontoon Dock and the surrender of its lease of that area. 8. The MDA does not currently specify the basis for all measurements referred to. It will be confirmed that all are GEA. 9. GLA and TSP will clarify the process for establishing a Delay Event for the purposes of extensions to Long Stop Dates. 10. The original MDA required the Scheme to include retention and restoration of Millennium Mills which included the Rank Hovis building (RHB). After a fire on 23/06/2019, having taken expert advice, GLA intends to arrange for the demolition of RHB and TSP will no longer be obliged to retain and restore RHB. TSP will instead reimburse GLA for their demolition costs (up to £3m) on draw-down of the Headlease of the relevant area.