Examination of Witnesses (Questions 19280
- 19299)
19280. You have heard me say in opening that
the Promoter is willing to embrace finding a solution to that
challenge in relation to number 40 within the joint study that
has already been agreed to between the parties in relation to
the other properties?
(Mr Barton) That is right.
19281. And that joint study would be able to
embrace that challenge and all those various more detailed aspects
of that challenge which are set out on the remainder of this page,
would it not?
(Mr Barton) Yes.
19282. You showed us the artist's impression
on page 27 of the Environmental Statement.[16]
You do appreciate that that is a very early stage of design?
(Mr Barton) It is, and it is
worth noting that it is not our artist's impression, it is one
created by yourselves.
19283. It is ours, but the Environmental Statement
makes clear, and I have reiterated the point today, that we of
course understand that there would have to be substantial detailed
design work to come up with an acceptable solution. Yes?
(Mr Barton) That is right.
I think the principle I was trying to establish is that, given
our chance to redesign this, a podium option is not an option.
We would want to get in off the new reduced level.
19284. You have told us that you do not think
that a new entrance at the lower level, directly off the level,
is likely to be realistic because of the presence of the plant
and so forth. I have indicated that we agree with you on that.
(Mr Barton) The options are very limited.
19285. So we are looking at the challenge which
is set by line one on LS10, are we not—
(Mr Barton) Yes.
19286.—and a joint study to look into
finding a solution for that?
(Mr Barton) Yes.
19287. Mr Mould: Thank you very much.
19288. Mr Fookes: I have no re-examination,
thank you.
The witness withdrew
19289. Mr Fookes: Could I call my next
witness, Mr Matthew Harrington.
Mr Matthew Harrington, sworn
Examined by Mr Fookes
19290. Mr Fookes: You are Matthew Harrington.
You are the Sales Director of Land Securities with responsibility
for co-ordinating the company's response to the Bill and your
particular involvement is in the letting side of the business.
Is that correct?
(Mr Harrington) Correct.
19291. Perhaps you could describe the building
to us in terms of the size and the number of people employed and
the type of tenants you have in the building?
(Mr Harrington) Certainly.
Numbers 10, 20 and 30 Eastbourne Terrace are three separate buildings
comprising approximately 20,000 square metres which also incorporates
40 and 50, so 10, 20, 30, 40 and 50 are complete holdings, that
is 20,000 square metres, and the whole of Eastbourne Terrace employs
approximately 1,500 people. Those individuals are split between
10, 20, 30, 40 and 50 and we have heard from Stephen that there
are about 700 in number 40 and about 800 people in 10, 20 and
30, so quite a few people. Numbers 10, 20 and 30, all of those
were constructed in the 1960s and, as we have heard, 10, 20 and
30 are the subject of a planning application as we want to bring
those up into the modern era. We have done that with number 40
and it has been very successful in order to retain companies in
the Paddington area because CB&I, who are the tenant, would
have moved out of Paddington, but because we offered them a new
building, they stayed in the area and obviously secured the 700
jobs that exist today. All we are trying to do is replicate that
exercise in 10, 20 and 30.
19292. Do the CB&I hold meetings and have
visitors coming as well as their full-time employees there?
(Mr Harrington) Yes, CB&I
are an engineering company with a global presence, their headquarters
being in Houston, Texas. They have numerous meetings involving
their projects, this is their UK headquarters and, therefore,
yes, there are numerous visitors there to Paddington.
19293. If we go through the four points of our
concern in order, perhaps we could turn to the first one on LS1
and would you like to give the company's position on this.[17]
(Mr Harrington) Yes, we have
heard this morning that the joint study has been proposed and
I think both parties subscribe to that and it is a very positive
way forward. We have always had a fairly healthy relationship
with Crossrail in trying to reach some mutual agreement, but I
think where we have fallen to one side on this particular proposal
is with the costs involved of such a joint study. In fact it is
our concern that the AP3 Environmental Statement obliges Crossrail
to further detailed design affecting landowners and that they
should be paying the cost. So far they have offered us 50 per
cent of the cost capped to £20,000 and you have got to remember
that those consultants will be engaged by Land Securities and
that, therefore, the charge will remain with us, irrespective
of how the eventual charges or costs end up. We do not think that
£20,000 is sufficient, certainly not if it is capped, to
cover the exercise, particularly as—
19294. The £20,000 relates to what?
(Mr Harrington) The £20,000
is a figure that Crossrail have put forward as a capped amount
that they are prepared to pay to cover the costs of involving
architects, mechanical and electrical engineers and numerous consultants
required to validate the effect of the podium entrances on our
buildings.
19295. This joint study is to examine Crossrail's
proposals for altering our existing plans?
(Mr Harrington) Yes.
19296. Would that cap then apply if number 40
were included in this joint study, as has been suggested just
now?
(Mr Harrington) I would presume
so. Number 40 has so far been excluded until this morning from
that study and, therefore, to include it would only strain further
the amount of work to be paid for out of that £20,000.
19297. The second point, that Crossrail should
submit proposals for the alteration of the entrance, do you have
any comments on the access to number 40?
(Mr Harrington) Well, my
comments from the commercial point of view are that the podium
that is being proposed, and I think we have heard that this morning,
is not something that a commercial developer would wish to incorporate
in any design primarily because it would not attract a modern
occupier to the building. I struggle, I have been struggling and
I have asked around within our corporation of any other buildings
which have been designed like this in recent times with an external
podium and we have failed to come up with any examples.
19298. Number 3, can you explain what number
3 is about and also the reference which I made earlier to 7 Soho
Square, also known as 2-4 Dean Street?
(Mr Harrington) Yes, I can.
Our concern here is, and we are not quite sure because Crossrail
have been unable to tell us, exactly what the impact of constructing
a podium at number 40 will entail and the degree to which it will
impact on the plant and the EDF substation which sits below. Our
concern is that if they disturb these elements of the building,
then the occupiers will not have cooling, they will not have electricity
and, therefore, CB&I will be unable to function and carry
out their business. This is a similar scenario to where we were
in June 2006 with another one of our properties, number 7 Soho
Square or 2-4 Dean Street, where tunnelling works underneath would
have the consequence of possibly encroaching on the plant in the
basement of that building and in that scenario we came to the
agreement with Crossrail that there would be a put option, and
a put option is an option to buy our interest, should such an
event happen at a future date, at market value. That is all we
are trying to replicate on number 40, so the precedent has been
set, we think the circumstances are the same and we cannot understand
why they are being regarded as different. Purely what we are asking
for here is that Crossrail recognise the precedent and would buy
our building in the event that our occupier was unable to occupy
it.
19299. Just looking at that mechanism which
was agreed for number 7, it is LS11.[18]
What happened there was that the Promoter entered into this agreement
to "acquire the whole of the freehold of...[the] property
at 7 Soho Square in the event that it proves unlettable due to
Crossrail's works". Then the mechanism is set out: "The
Promoter must deliver to Land Securities the final design plans
for the works in the vicinity of the property. If [they] show
that the works will either require the Promoter to", and
we do not need to worry about the first one because that relates
to a Tesco store on the first floor, but if the works require
the relocation of "the plant room or the communications room
so as to prevent it from being serviced or occupied in a manner
commonly accepted and required by commercial property landlords
and tenants, then Land Securities can serve a `put-option' notice
on the Promoter requiring the Promoter to acquire the whole building.
The Promoter must then acquire the whole building at open market
value, subject to referral to expert determination in the event
of any disagreement as to value". That is the mechanism.
Do you see any reason why that mechanism should not apply equally
to this building?
(Mr Harrington) No, none whatsoever.
16 Committee Ref: A219, Extract from Crossrail Environmental
Statement AP3, Artists impression of Proposed Works at Eastbourne
Terrace, billdocuments.crossrail.co.uk (SCN-20070207-002). Back
17
Committee Ref: A219, Summary of Land Securities' concerns (SCN-20070207-001). Back
18
Committee Ref: A219, Mechanism agreed for purchase of 7 Soho
Square in the event that Crossrail's works render it unlettable
(SCN-20070207-005 and -006). Back
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