APPENDIX 49
London Development Agency Briefing Note
on the agreement dated 15 November 2005
This memorandum is intended as a briefing note
for the House of Commons Transport Select Committee on the principal
provisions of the Agreement relating to both the delivery of and
access to the proposed transport and related infrastructure at
Stratford City required for the Olympics.
1. EXECUTIVE
SUMMARY
Summary
The Agreement:
(a) provides for the transfer of land required
for the 2012 Olympics (the "Stratford Lands") to EP;
(b) preserves the interests of the Stratford
City developer (ie LCR and SCDL and referred to together as "SCDP")
in their proposed redevelopment of a key development area within
the proposed Stratford City development (referred to as "Zone
1"); and
(c) secures the necessary infrastructure and
access rights over Zone 1 required to accommodate the 2012 Olympics.
In summary, the Agreement:
1.1.1 contains an unconditional commitment
that the freehold of the Stratford Lands will be transferred to
EP for £1 as soon as practicable and by no later than 16
January 2006;
1.1.2 enables the LDA to make the Olympics
CPO in a manner of co-operation with SCDP;
1.1.3 provides certainty of delivery for
the necessary Olympics infrastructure within, and access rights
over Zone 1; and
1.1.4 requires any scheme implementation
proposals put forward by SCDP (pursuant to its existing contractual
arrangements with SOST) when SCDP is seeking to drawdown land
(and particularly Zone 1) to safeguard the appropriate rights
required for the delivery of the Olympics.
2. KEY COMPONENTS
OF THE
AGREEMENT
2.1 Robust Olympic CPO
SCDP agrees:
2.1.1 not to seek judicial review of the
LDA's Olympics CPO made on 16 November 2005. SCDP had sought to
argue that its land interests and those of SOST (as Crown land)
were incapable of being the subject of a CPO; and
2.1.2 to continue to progress its development
proposals for Stratford City.
Zone 1 is now included within the Olympics CPO
but not: the freehold interest in it (as this will be owned by
EP); the interests of LCR and SCDL in Zone 1; or any interest
in Zone 1 subsequently created by either of them.
Under existing development arrangements, SOST
declares (at the request of LCR) land to be surplus where it is
not required for the Channel Tunnel Rail Link ("CTRL"),
the proposed extension of the Docklands Light Railway and the
operational rail network but only in cases where LCR has an "implementable
scheme" for the development or sale of such relevant land
which scheme proposals must now safeguard appropriate rights for
the land intended for the 2012 Olympic Games.
2.2 Guaranteed delivery of Olympic Infrastructure
at Stratford City
2.2.1 Delivery of Olympic Infrastructure
Land will be made available under the Agreement
on the basis that the delivery of the critical and identified
infrastructure and access rights for the Olympics within Zone
1 is secured.
2.2.2 All owners of Zone 1 to be bound
by safeguards to deliver Olympic Infrastructure
Any owner of Zone 1 or any part of it shall
be burdened by the following matters upon acquisition:
2.2.2.1 if development is implemented on
Zone 1 the owner shall also be obliged to design and construct
the following "Zone 1 Infrastructure" for the Olympics:
(a) the town centre link being the pedestrian
bridge link between Zone 1 and Meridian Square;
(b) enhancement works to Stratford regional
station to address the impact of the Olympics; and
(c) any other infrastructure within Zone
1 required for the Olympics and which is referred to in the strategy
to be agreed between all relevant parties pursuant to the Stratford
and Olympics planning consents and planning agreements;
2.2.2.2 Step-In Rights in favour of EP and/or
the Olympic Delivery Authority ("ODA") to enter upon
Zone 1 as necessary (ie in default of SCDP/or the relevant owner
of Zone 1) to ensure the Zone 1 Infrastructure is carried out
and completed; and
2.2.2.3 access arrangements required for
the use and enjoyment of the Zone 1 Infrastructure once it is
constructed.
2.2.3 Construction Standards for the
construction of the Zone 1 Infrastructure
The Zone 1 Infrastructure works must be:
2.2.3.1 designed and constructed in a good and
workmanlike manner and in accordance with planning law and with
SCDL's plans and specifications;
2.2.3.2 started no later than 30 June 2008 with
a projected construction completion date of no later than 30 June
2011; and
2.2.3.3 designed and constructed by consultants
and contractors whose terms of engagement allow the exercise of
step-in rights by EP or the ODA and require them to comply with
the terms of their engagement in relation to the quality of the
relevant service or construction work and the time by which it
is to be delivered as referred to above.
2.2.4 Step-In Rights for EP/ODA to carry
out the Zone 1 Infrastructure
The Step-In Rights are in favour of EP or the
ODA and are the safeguard by which the Zone 1 Infrastructure works
may be carried out if SCDP (or any other Zone 1 owner) has drawndown
Zone 1 and fails to undertake the Zone 1 Infrastructure or, if
once commenced, it fails to adequately carry out the Zone 1 Infrastructure
works. The Step-In Rights:
2.2.4.1 arise if EP or the ODA determine
that SCDP will not achieve the required quality or timing for
delivery of the Zone 1 Infrastructure; and
2.2.4.2 constitute EP's or the ODA's rights
to have a licence to enter and remain on such parts of Zone 1
as may be necessary to procure completion of the relevant Zone
1 Infrastructure.
EP or the ODA secure further necessary rights
to enable delivery of the Olympics by having rights to go on to
the Zone 1 land as follows. If by 30 June 2008 any Zone 1 land
has not been transferred to LCR and the CTRL works have been completed,
EP or the ODA may occupy the relevant part of Zone 1 as licensee
for the purposes of constructing the Zone 1 Infrastructure in
place of the Stratford City developer. If by 30 June 2008 any
Zone 1 land has not been transferred to LCR and the CTRL works
have not been completed, then EP or the ODA may still occupy the
relevant part of Zone 1 as licensee in order to construct the
Zone 1 Infrastructure but in this case EP/ODA shall work together
with LCR so that their contractors are granted such access as
may be required for the carrying out and completion of their respective
works.
2.3 The Olympics Facilitation Agreement ("OFA")—delivery
of Olympics infrastructure outside of Zone 1
The OFA is intended to achieve the overarching
delivery of the Stratford City Olympics and is primarily concerned
with that part of the Stratford Lands outside of Zone 1 (this
is because the Agreement is intended to cover the delivery of
the Zone 1 Infrastructure). It is specifically stated that the
Olympic Village is to be constructed on the Stratford Lands outside
of Zone 1.
If by 31 March 2006 the Parties have not exchanged
the OFA, the LDA may proceed to acquire any interest in the Stratford
Lands outside of Zone 1 (other than the freehold in such part
of the Stratford Lands as this shall be owned by EP).
3. CONCLUSION
The Agreement gives a reasonable mechanism enabling
EP/LDA to ensure that either SCDP completes the Zone 1 Infrastructure
works in a timely manner or provides the rights for EP/ODA to
"step in" and complete the Zone 1 Infrastructure.
21 November 2005
(1) The Secretary of State for Transport
("SOST");
(2) London and Continental Railways Limited
("LCR");
(3) Stratford City Developments Limited
("SCDL");
(4) Duelguide Holdings Limited;
(5) Stanhope PLC;
(6) The Urban Regeneration Agency (English
Partnerships) ("EP"); and
(7) London Development Agency ("LDA").
4. OTHER NEGOTIATIONS
IN RELATION
TO THE
OLYMPIC PARK
Mr. Caborn [holding answer 28 October
2005]: There are 284 businesses (of which 96 are in or adjacent
to Marshgate Lane) in the Olympic Park area that the London Development
Agency is seeking to engage with individually to understand their
relocation requirements and to discuss with them the LDA's offer
to acquire their premises by agreement.
164 of these have appointed advisers in order
to start negotiations and the LDA has reached in-principle agreements
with 31 businesses, of which 22 have signed Heads of Agreements.
The majority of the businesses in the Olympic
Park area will need to move by mid-2007. However around 53 of
the businesses will not be required to relocate until later in
the process, as vacant possession of their land is not required
until 2009 . . .
Mr. Caborn [holding answer 28 October
2005]: The businesses or parties with an interest in the land
to be acquired under a confirmed Compulsory Purchase Order are
compensated under the statutory Compensation Code.
They receive the market value of their premises
or other land interests. In addition they are entitled to the
following: a disturbance payment in terms of either the business'
relocation or extinguishment, a statutory loss payment can be
made to commercial and residential owners/occupiers based on a
percentage of market value of their property or interests. They
are also paid the reasonable costs of their legal advisors and
surveyors. Each party with a compensateable interest is entitled
to appoint a chartered surveyor to negotiate the compensation
on their behalf with the acquiring authority. Disputes as to the
level of compensation payable are referred to the Lands Tribunal.
If the CPO is confirmed the date of land valuation
is either a date the parties agree as appropriate, or the date
the acquiring authority takes possession of the land. This will
not be before the date on which the Secretary of State for Trade
and Industry issues his decision concerning confirmation of the
CPO.
The London Development Agency (LDA) today tackled
head-on claims that the relocation process for businesses in the
2012 Olympic Park area is being unfairly conducted.
The LDA's Executive Director of Regeneration
and Development Tony Winterbottom said:
"It is because the Olympic Games presents
such an unrivalled opportunity for some of the most deprived parts
of East London that we have been involved in Backing the Bid.
The London 2012 Olympic Games will transform the Lower Lea Valley,
from Tower Hamlets and Newham up through Hackney to Waltham Forest,
and will give local communities the boost they deserve—a
legacy of 9,000 new homes, double the jobs in the Olympic zone
alone, business opportunities, fantastic new sports venues, new
schools—and Europe's largest new urban park in 150 years.
"More than 80% of the land in the Olympic
Park area is already under public control. Now we have won the
Games, the obligation is on the LDA to secure the remaining 19%
of the land. We have made every effort to engage with all 284
businesses within the zone for the past two years, even though
we did not yet know that we would get the Olympic Games and were
going above and beyond our obligations in doing so. Since the
bid decision we have engaged in dialogue with more and more businesses
and have to date reached agreement with a total of 24 businesses.
Of the remaining businesses, nearly 50% have
appointed advisors with a view to commencing negotiations with
the LDA. This percentage is increasing by the day.
"The approach we have taken continues to
meet the requirements of the Compensation Code. The LDA has given
a clear commitment that no business will be financially worse
off as a result of relocation and has already made clear to businesses
on the site that we will continue to offer voluntary agreements
alongside the CPO process.
"There are a handful of businesses who have
been demanding unjustified amounts of money—multiple times
the market value—and seeking to use the leverage of the
media to get what they do not believe they could attain by independent
arbitration. We have to be fair both to the businesses but we
must also protect the tax-payer from speculative exploitation."
Recent false claims made to the media include:
— LDA has insufficient funds to pay
for relocating businesses in the Olympic Park area. This is untrue.
The LDA does have sufficient funds to do this.
— There is an inherent "affordability
gap" between existing sites and alternative sites. This is
untrue. There is suitable land of comparable value nearby.
— That the LDA has offered relocation
sites "50 miles away from current sites". This is simply
untrue. As London's Development agency, LDA landholdings are within
London, where, as a major landowner, has more than enough land
to relocate every business if necessary and has offered to do
so. The relocation process is "putting at risk 11,000 jobs.
In fact the relocation process will more than double the number
of jobs in the Olympic Park area alone, from around 5,000 to more
than 11,000.
— Newham "never wanted the Olympics
in the first place". In fact, not only has Newham Council
been one of the most enthusiastic backers of the 2012 Bid, and
a MORI poll showed that 78% of East End businesses backed the
Bid.
— That "only one deal has been
done': in fact 24 agreements have been reached and many more negotiations
are at an advanced stage.
— That eviction is "imminent".
This is untrue. Two years (Starting in July 2005) has been built
into the construction timetable before starting the construction
of the Olympic Park to ensure businesses have sufficient time
to move to appropriate sites. This should ensure both successful
relocation and that the Park can be delivered on time. Businesses
that can demonstrate that they will need more than two years to
relocate are being handled as special cases.
The LDA has made clear to all the businesses
that it will pay market value for land interests in line with
the Compensation Code and these values will be in line with the
RICS Appraisal and Valuation Framework. The disturbance payable
to businesses will facilitate their relocation to alternative
premises. Businesses are free to go to independent arbitration
or the Lands Tribunal to settle the matter, if they are unhappy
with the values offered.
The LDA will abide by the decision reached.
In seeking to help the individual businesses
concerned, the LDA has been going above and beyond the requirements
of the Compensation Code in offering to negotiate voluntary provisional
relocation deals in advance of July 6th and in offering to pay
for the necessary legal and surveying fees incurred by businesses
wishing to take up the offer. The LDA is continuing to go over
and above the requirements of the Compensation Code in offering
not only to pay the necessary fees of lawyers and surveyors for
the businesses but also in offering to secure alternative sites
for the businesses. The LDA process has been independently investigated
and commended by the RICS (Royal Institution of Chartered Surveyors).
8 September 2005
PLANNING APPLICATION BOUNDARIES
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