Examination of Witness (Questions 220
- 239)
WEDNESDAY 8 MARCH 2000
MR TOM
BLOXHAM, MBE
Chairman
220. Can I welcome you to the Committee. Do
you want to say a few words by way of introduction or do you want
to show the slides? Can you just introduce yourself for the record,
please?
(Mr Bloxham) My name Tom Bloxham and I am the Chairman
of a company called Urban Splash. We are basically private sector
developers who specialise in a lot of brownfield regeneration.
We are quite different from much of the evidence that you have
taken in the way we are striving towards the cutting-edge of regeneration
and we are undertaking those projects. What I thought would be
most useful is to give you a ten minute summary of some of the
projects we have undertaken and to talk to you about the issues
we feel we have undertaken. In particular I feel very strongly
that in the relatively short time I have been involved in this
business, around ten years or so, most of the projects we have
done have been done in partnership with local authorities and
national Government. I would be very pleased to see the emphasis
on urban regeneration rising on the Government agenda but ironically
the ability and the mechanism of delivering urban regeneration
is actually becoming harder and harder to get, in my opinion.
In particular gap funding has ceased to exist because of the European
Court ruling. What I intend to do is to show a series of slides
and explain our history. This morning I should have been travelling
from Bordeaux, having seen Manchester United win, then down to
Cannes to go to a property conference that is going on this week,
however I have the pleasure of being stuck here. However, I am
pleased to do that because I actually think that what you are
talking about—you are the people in power—changes
people's lives and makes a real, real difference to the cities.
There is an opportunity here now. So much in the White Paper is
vital and you seize on the important parts, and as the advert
says the overriding emphasise is, in my opinion, just do it. I
will talk you through these slides very quickly.
The Committee suspended for presentation
by witness. See Page 43.
There are just five matters I want to suggest
very quickly, five action points.
Chairman
221. Very quickly.
(Mr Bloxham) One is gap funding, which I have already
mentioned. Secondly, ISA tax-relief. It is a crazy situation in
the Government, I could publish pornography, I could sell arms,
I could run sex tours and the Government would give me a tax concession
on EIS relief but you cannot do it for brownfield regeneration.
Thirdly, tax on vacant land—it is not all money for us—plenty
of land is lying empty and speculators are just holding on to
it. It should be a carrot and stick to force people to develop.
Fourthly, to encourage developers and people to put the names
of the architects and the companies on the buildings. Fifthly,
and perhaps most importantly, to encourage yourself, the Government,
both local and national, to be good patrons and build good buildings.
A lot of the buildings you put up as a Government are absolutely
second rate.
Chairman: Thank you very much, that has been
very interesting and very provocative. It is just a little worrying
for me that one or two of those derelict buildings either I or
some of my family worked in in the past.
Mrs Ellman
222. From your experience in Liverpool and in
Manchester what would you say are the key things that the Government
should do better to support investments like yours in the inner
city?
(Mr Bloxham) Make partnerships with the people who
are delivering things, joint ventures. Finding people they can
work with and finding people they can trust and actually working
closer with them.
223. What are the impediments to stop those
partnerships now?
(Mr Bloxham) The impediments are it is fairly difficult
for local authorities to enter joint venture arrangements and
in particular where property is concerned they are always, perhaps,
quite rightly, very, very concerned about accusations of fraud,
of not best practice and not going to the highest bidder. The
reality of most of these cases is it takes a year, two years or
three years and several hundred thousand pounds worth of funding
to come from an idea to see whether it is actually deliverable
or not.
224. How would the most effective partnership
work?
(Mr Bloxham) It has to be an open book, joint venture
arrangement. Where the public sector say to a developer, that
is a good idea you have, we are going to run with you for a year's
time exclusively. If you can prove to us within a year you can
do it and you show us you get whatever the profit margin is, we
will go with you.
225. Are you saying that an authority should
select an appropriate developer and then work with them?
(Mr Bloxham) Absolutely. Select the developer, do
not select the scheme. So often people have problem sites and
they encourage developers to come up with schemes. What happens
is some developers do very pretty pictures to win the competition
and then they cannot deliver and over a period of the next two
years they fail. It is better to find individuals and partners
they can work with to develop the scheme.
226. How important is public sector financial
support to the development of the type you do?
(Mr Bloxham) Absolutely vital. Most of the developments
you see there we have done in areas where the market has totally
failed. We were buying property for three or four pound per square
foot, there was no market at all for the property, and we ended
up leaving the areas, proving there was a market for land there.
To do that you have to start by subsidising it and the first project
has to be done very cheaply so people can buy in there with the
confidence that they are getting value for money, with the confidence
to move, and then the prices rise and very quickly after that
to enable the projects to be self-financing.
Mr Brake
227. In your experience, is there still an issue
over what you are required to do to clean up contaminated land
in brownfield areas?
(Mr Bloxham) By and large, no. There was a time, three
or four years ago, when contamination was not an issue at all.
It has gone too far now, as soon as contamination comes in it
is a great big problem. It is about bad land conditions and other
things and usually the cost is not that significant compared with
the whole price of it. On most of the projects you see the price
of the contamination has been in the hundred thousands compared
with a £12 million total project.
228. It is clear to you, the developer, what
you need to do is ensure that the site is clean and in the future
there will not be a possible liability?
(Mr Bloxham) It is not clear when we start. Given
a year down the line when we have done the reports, we get the
information fairly quickly and easily. There is a whole series
of things that need to be done from the idea to be able to deliver
it. Contamination has never stopped us getting involved in sites.
Mr Benn
229. You said a moment ago, it is the developer
not the scheme. How are local authorities going to know or be
better informed about who the right developers are?
(Mr Bloxham) There are a number of issues there, most
local authorities have a very good idea who has delivered in the
past and what people have done. Secondly, I think local authorities
should take more professional advice. Quite often we are being
asked to pitch for very, very big schemes and the authorities
are making decisions with a few officers and members without any
top grade professional advice. It is like doing a job interview,
if you do a job interview you short-list all of the people who
are capable of doing the job and then you pick the one who you
get on best with, it is the same sort of thing with developers.
230. A lot of the developments you showed us
were in or very near to the city centre. Thinking about areas
that fringe around the city centres where the housing market,
residential areas, has, in effect, collapsed, what have you learned
about the work you have done? Have you done a lot of work in those
kind of areas, slightly further away?
(Mr Bloxham) We have done a bit. Most cities are like
doughnuts. In Manchester city centre every developer and his dog
is looking at new developments, however, you still have this ring
around it. The same with Liverpool. The city centre all of the
time is spreading out into that, you are talking generations,
10, 20, 30 years, to revert to the Georgian times when people
were moving further and further out. The same is happening but
much closer to the centre. The second thing you can do is you
can change that if you do really big areas of it. It is no good
just doing social housing, you have to do mixed income levels,
including some very expensive housing and some relatively cheap
housing.
231. The last question was parking and parking
provision on the sites you have been developing. I do not know
what experience you had in terms of what parking provision you
made available for those schemes, do you think we can get away
with less parking provision and still make it attractive to people?
(Mr Bloxham) Sure. Two of those schemes had no car
parking provision at all. A couple more had car parking provision
borrowed from joint neighbours. City centres have full car parks
used in the day time but at night time with a bit of imagination
and swapping over you can do it. If you do not have a car parking
scheme you lose probably 50 per cent of your potential purchasers.
Miss McIntosh
232. Can I ask you on the public funding aspect,
although you do not qualify for EIS are you satisfied with the
current provision for public funding?
(Mr Bloxham) Absolutely not. Up to last year most
of the schemes were funded through gap funding, whereby we saw
a scheme that had social benefits that would cost £12 million
to develop but would only be worth £10 million and therefore
£2 million of funding was received. For the short time I
have been involved in this we, first of all, we dealt with the
DTI City Grant, we then dealt with English Partnerships, we then
dealt with RDA and now because of the European Court ruling the
whole thing has stopped, finished. The principal tool for delivering
urban regeneration is no longer available.
233. How does gap funding work with matched
funding?
(Mr Bloxham) In very simple terms there would be a
scheme which would have social beneficial effects, namely create
new homes in the city centre and create new jobs. If that would
cost £12 million to build and develop and at the end of day
it is only worth £10 million, you would make a case to the
relevant organisation, you would say, "We have a good scheme
here with important benefits, we cannot make it stack up because
it is not commercially viable, we need another £2 million
to get the difference between the costs and the value." That
is the basis of the funding on probably half of the schemes you
saw there.
234. How would you see the solution if you lost
that funding? I have to say with my knowledge of European law
it was illegal. I am amazed that the Government got away with
it for as long as they did. What would you see as the alternative
way? We feel very strongly about having mixed housing, particularly
in the area I represent in North Yorkshire, which is very different
from the area you have shown us. We need to have affordable housing
for young people, particularly in the countryside.
(Mr Bloxham) I do not know, to be honest, is the easy
answer. I am not au fait with all of the European legislation.
The reason it was queried by the European Court was because it
was misused, it was used to attract inward investment. The issue
you see here is very, very different and nothing to do with competition.
You know, I would hope that all of the clever people who are working
there could devise a way of seeing something similar. If we can
avoid a whole new regime again—for the fourth time in ten
years—let us see if we can build on what we know already.
Christine Butler
235. It is a very exciting presentation. What
is the largest scheme you have tackled in terms of floor area,
square metres? Crucially, could all of these ideas and the developments
you already succeeded with be transferred to a very large scale
inner-city regeneration project? I am talking about a masterplan
for urban regeneration, could you handle that if given the chance?
(Mr Bloxham) Britannia Mills, is the biggest one we
are doing, which is three buildings and in combination is about
350,000 square feet, about 400 dwellings. What is interesting
is it would have taken 60 or 70 acres of greenbelt to house the
same number of people in the country as took up three derelict
buildings. I would love to have a go at doing a big thing. It
is very, very frustrating for us. What tends to happen is that
we do one scheme, increase the value of all of the buildings around
it and all of the other owners sit there, doing nothing, do not
develop their buildings and just then sell it on for a huge amount
of money or more regularly they say, "I am not going to sell
yet because my building has gone up 50 per cent this year, it
will go up 50 per cent next year, I am going to sit tight."
236. Could you tackle that or would there be
huge constraints to do something really big?
(Mr Bloxham) As an individual organisation our capacity
is probably about a £100 million scheme. There are plenty
of other companies that we could do joint ventures with.
Chairman
237. How far are you really just a niche market?
If you look at Manchester it has 30,000 plus students, Liverpool
has a huge student population, so are you appealing to a group
of people who have been through the education mill and, perhaps,
like the ambience of those two cities and want to stay there.
Do you think it is applicable to Burnley or Accrington?
(Mr Bloxham) I would say it is absolutely not a niche
market, unless your niche-market is people who enjoy living in
good homes. My opinion is that everyone likes living in a well
designed home. I would not refer you to Accrington or Burnley
I would refer you to Paris, Florence, Barcelona or London. In
most cities and towns the closer you live to the city centre the
better the environment, the higher the property price the more
prestigious it is. Even in London—there is a quarter of
the people living in London compared to Paris, despite it being
twice the size. We have to change those perceptions and we are
doing that with good property. The reason why most people do not
want to live in city centres is because originally they were full
of factories and very smoggy and because of the legacy of that
there are no good houses. You bring good houses in and people
will live in them, surprise, surprise.
238. How many of the buildings you have dealt
with are listed?
(Mr Bloxham) Only two of them.
239. You have not had any problems with English
Heritage?
(Mr Bloxham) English Heritage are transforming themselves
rapidly. A few years ago we did have one—a new elevation,
it is the first picture, it was a very contemporary frontage and
we were refused planning permission for it. We built it anyway—I
was bit naive then and was not worried about rules and regulations—and
two years later we saw somebody taking a photograph of it, so
I said, "What are you taking a photograph for?" He said,
"We are using this as a good example of best practice."
The top rank of English Heritage is transforming itself as an
organisation and they have been very helpful on most of our projects.
On Britannia Mills, the last one, English Heritage wrote in on
the planning thing saying, "We like the scheme, we like the
design but we do not think you should go ahead because there is
no demand for this sort of living in this area."
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