Memorandum submitted by Igloo Regeneration
and Muse Developments
IGLOO AND
MUSE
1. The Igloo Regeneration Fund (Igloo) has
been described by the United Nations as the world's first responsible
property fund. Igloo invests, on behalf of a group of major fund
managers, pension funds, charities and ethical investors in well
designed, environmentally sustainable, mixed use urban regeneration
on the edge of the UK's top 20 city centres. Igloo's fund manager
is Morley, a wholly owned subsidiary of Aviva plc.
2. Muse Developments (Muse) is one of the
UK's leading exponents of mixed use regeneration with an unrivalled
track record in the delivery of major developments through public-private
partnership including such flagship schemes as Newcastle Quayside,
Hulme Regeneration and Barbarolli Square in Manchester; a forward
development programme of nationwide regeneration projects valued
at £5 billion; and the role of development manager to the
innovative and very successful English Cities Fund. Muse previously
traded as Amec Developments and is now a wholly owned subsidiary
of Morgan Sindall plc.
ISIS WATERSIDE
REGENERATION
3. Igloo and Muse have formed a joint venture
to invest in Isis Waterside Regeneration, a joint venture with
British Waterways (BW) in which BW have 50% and the Igloo/Muse
JV has 50%.
4. Isis Waterside Regeneration was a significant
innovation when it was formed in 2002. It provided British Waterways
with a way of engaging long term private investment finance and
development management skills to release the financial, social,
environmental and waterside value of its larger and more complex
property assets.
5. Isis has delivered financial returns
to British Waterways to help maintain the canal network, delivered
urban regeneration in places like Manchester and Leeds and is
delivering significant enhancements to the waterside environment.
WATERWAY ENHANCEMENT
(COTSWOLD CANAL)
6. Isis provided support to British Waterways
in undertaking its analysis of the viability of the re-opening
of the Cotswold Canal and as Isis's private partners we were,
and are keen to support this initiative if it can be made viable.
7. We have been impressed by the innovative
approach of British Waterways in forming Isis and in the extent
of activity they have been undertaking during the course of Isis's
existence in restoring, expanding and enhancing the canal network.
8. An holistic approach to waterways restoration,
re-opening and construction, which recognises the public benefits
as well as the commercial viability of these initiatives and uses
the latter in part to achieve the former is something we wholeheartedly
support. We believe the waterways contribution to wellbeing, sustainability
and other public policy goals in the UK is under-valued and that
a more proactive and strategic engagement through vehicles like
Isis would help to reap these benefits.
BRITISH WATERWAYS
9. British Waterways has also developed
its own skills in this period and while it is unlikely ever to
have the culture, resources or competitive advantage to undertake
the physical development element of urban regeneration it is developing
its skills and its internal resources both to maximise the value
it is capable of achieving from its assets and its ability to
act as a partner with both the other public and the private sectors.
10. However to present a balanced picture
we should also air some of our concerns. We are acutely aware
of the recent financial pressures on British Waterways and this
has caused difficulties for Isis as it seeks to balance financial
returns (and in particular consistent cash flow to BW from what
is still a relatively small portfolio of projects from a relatively
young venture with a necessarily lumpy cash flow profile) with
social, environmental and waterways benefits.
DEFRA
11. We have been surprised that DEFRA has
not been more pro-active in working with BW to maximise the potential
of BW's activities to achieve social and environmental benefits
in particular. Given DEFRA's primary policy objectives around
sustainability as well as the government's wider policies it seems
strange that BW appears to be primarily focussed on securing revenues
to minimise grant in aid investment in the waterways when there
are major policy wins in areas like urban regeneration, new housing,
design quality and sustainability that are relatively easy to
secure and promote.
SECURING POLICY
OBJECTIVES THROUGH
PUBLIC PRIVATE
REGENERATION PARTNERSHIPS
12. We have also been aware of a reluctance
within BW to embrace these policy agendas and to promote the role
of BW, and of its initiatives like Isis, in securing their delivery.
13. Igloo is also involved in a similar
public private partnership in the East Midlands with the East
Midlands Development Agency (emda) and English Partnerships and
our experience is that Blueprint has been better at achieving
both financial and public policy goals in its activities which
are essentially identical to those of Isis.
CONCLUSION
14. In conclusion we find British Waterways
good and generally improving, though not yet perfect, partners
and we believe that, if appropriately incentivised and resourced,
they could be a major force for good and for the achievement of
a number of important public policy objectives in the UK through
the range of their activities and particularly through their waterside
regeneration role.
Submission by Chris Brown
Chief Executive of Igloo Regeneration; and
Nigel Franklin
Managing Director, Muse Developments
March 2008
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