1 Presenting the commercial opportunity
to potential buyers
Figure
2: The location of the Greenwich Peninsula
The Greenwich Peninsula is located in East London
and is in a major regeneration area, the Thames Gateway
Source: Office of the Deputy Prime Minister
1. The Dome is located on a strategically important
site. The Greenwich Peninsula marks the western end of the Thames
Gateway (Figure 2), one of the main growth areas proposed
for economic regeneration and development in the South East of
England. Public investment in remediation, servicing and landscaping
works and in transport links has opened up the site for intensive
and profitable redevelopment. In 1998, Ministers decided that
the Millennium Dome would itself remain as a legacy after the
Millennium Experience Exhibition and asked English Partnerships
— the national regeneration agency which owned the site,
to find a sustainable long term use for it.
2. The initial unsuccessful competition to find a
future use for the Millennium Dome began in March 1999 but failed
to find a buyer able to complete the deal on acceptable terms.
There were several reasons behind the lack of success of this
original Dome sale competition. The objectives for, and process
of, the first competition were complex. The difficulties were
exacerbated for those bidders which depended on the deficient
business records and weak commercial performance of the New Millennium
Experience Company. Second, it was inherently difficult to sell
the Dome separately from other parts of the Greenwich Peninsula
site, and difficult for the Government to derive sufficient confidence
about the deliverability of innovative proposals from bidders.
In March 2001 the Government initiated a new sale process which
led to a deal with Meridian Delta Ltd and the Anschutz Entertainment
Group (Anschutz) for the redevelopment over 20 years of the whole
northern Greenwich Peninsula, including reuse of the Dome. This
complex deal preserves the Dome in place until 2018, housing a
large indoor arena and leisure complex, and provides for a major
office development and some 10,000 new homes on the adjacent land
(Figure 3). Meridian Delta Limited is a joint venture between
Lend Lease, an Australian property company, and Quintain Estates
and Development plc. Meridian Delta selected the Anschutz Entertainment
Group to operate the Dome. Anschutz is a major owner of sports
teams around the world with a track record of designing and building
and operating major indoor arenas.[2]
3. During the initial Dome Sale competition only
the 48 acres of land beneath and immediately around the Dome had
been offered for sale, with an indication that up to a further
20 acres of land adjoining the Dome could be available provided
that bidders could show that they were essential for their proposed
use of the Dome and an integral part of their proposals. When
the initial competition came to an unsuccessful end in early 2001
the competition team, advisers and the Board of English Partnerships
came to recognise that the 68 acres under and adjoining the Dome
itself might not be viable for sale on its own.[3]
4. The next sale process nevertheless began on the
same formal basis as before, allowing for additional land to be
made available only where it was an essential part of bidders'
proposals for the Dome. Although English Partnerships were in
practice open to proposals for much more of its land on the Peninsula,
some 170 acres in total (Figure 4), it believed that to
advertise the fact would attract bids from property developers
who were only really interested in the land itself. Ministers
had decided that the priority would be to find a sustainable use
for the Dome itself, with regeneration of the Greenwich Peninsula
as a secondary objective. So English Partnerships and the Department
invited market interest on the basis that the Dome and immediately
adjacent land was available - some 48 acres of land under the
Dome itself and 20 acres used during the Millennium Exhibition
for visitor reception and administration. Interest in further
land owned by English Partnerships on the Peninsula, some 100
acres, was not ruled out but nor was it explicitly advertised.
As a result some potential bidders were unclear about how much
land was on offer. It was not apparent to all that there was an
opportunity to bid for other land.[4] Figure
3: The Meridian Delta Scheme
The main elements of the deal are:
1. Change of use and retention of the Millennium Dome, with some external alternations;
2. Erection inside the Dome of a 20,000 seat Dome Arena;
3. Creation of the Dome Waterfront, a sports, leisure, entertainment and retail complex within the Dome;
4. Construction of Millennium Square; a large plaza between the Dome and the London Underground station serving it, and designed to accommodate large crowds and special events;
5. Car Parking to serve the Dome Arena and Waterfront;
6. Up to 10,010 residential dwellings, student and special needs housing;
7. Up to 325,000 square metres of office, research and development floorspace;
8. Up to 18,600 square metres of light industrial, business park floorspace;
9. Community uses including schools and health care provision;
10. 48 acres of Public Open Space;
11. A new Hotel;
12. Up to 22,800 square metres of retail and up to 11,000 square metres for food and drink.
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Source: Meridian Delta
5. Public sector vendors are most likely to maximise
the value they receive if they inform all potential bidders of
the exact parameters of what is on offer The Department maintained
that there would not have been more interest if the vendors had
been clear how much land was on offer. Their advisers had spoken
to some 150 potential partners and had found very little interest
in the Dome, whereas the proposals put forward by Meridian Delta
were very strong. The Department were satisfied that there was
no offer around the corner that had not been tapped. Potential
bidders were shown the full extent of English Partnerships' landholdings
on the Peninsula, and which portions were absolutely available
with the Dome, but at no stage was anyone prevented from talking
about what other land they needed. In their opinion the reason
why companies did not proceed was that very few of them wanted
to be involved in finding a sustainable use for the Dome itself.
The fact that Meridian Delta, having in discussion detected the
availability of more land, were willing to invest time and money
in working up proposals for the Dome itself, suggests that other
potential bidders might nevertheless have been incentivised to
do the same.[5]
Figure 4: The
North Greenwich Peninsula
English
Partnerships own most of the land on the Peninsula; important
areas are owned by London Underground Limited and by private companies.
Source: English Partnerships
2 C&AG's Report, Part 1 Back
3
ibid, paras 1.20-1.23 Back
4
ibid, Part 2; Qq 15, 21 Back
5
Qq 9, 23 Back
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