Urban development construction work

Tender description

Silvertown Quays ("SQ") is a 50-acre brownfield site in the Royal Docks area of London owned by GLAP. Following a procurement for a development partner for a mixed use development at SQ, GLAP entered into a Master Development Agreement ("MDA") with The Silvertown Partnership LLP ("TSP") whose members were Chelsfield Properties Ltd ("CPL") and First Base Ltd ("FBL"), in June 2013. TSP has applied to GLAP and GLAP intends to agree to a "Change of Control Event" under the MDA, whereby a joint venture of a Starwood entity, (SOF-11 Developments UK Holdco lux S.a.r.l) (“SW”) and a group company of Lendlease Europe Holdings Ltd (“LL”) (the “JV”) would acquire CPL (and indirectly its 33.33 % interest in TSP) and directly the remaining 66,66 % of TSP. Associated documents will be entered into in relation to the MDA in connection with the proposed Change of Control Event. Those documents will bring about changes (summarised in section II.2.4 below) which are consequential and / or non-substantial. Pursuant to a competitive dialogue launched in 2011, GLAP selected TSP as its development partner for SQ and entered into the MDA with TSP in June 2013. TSP has now requested GLAP's approval under the MDA to a proposed Change of Control Event involving a corporate restructuring of the ownership interests in TSP as referred to in section II.1.4. In GLAP's view, its approval of the Change of Control Event, the implementation of that Event and the entry into the associated documents referred to below (together the "Relevant Matters") will not constitute an award of a new contract which is substantially modified compared to the contract procured in 2011/12, for the reasons set out in Section IV.1.1. Consequently, the Relevant Matters do not give rise to an obligation to conduct a new procurement procedure. GLAP intends to enter into various documents in connection with the Change of Control Event. To the extent that these record changes to the MDA, those changes are consequential to the Change of Control Event and/or non-substantial in nature. These may be summarised as follows: 1) A Change of Control Consent Letter – This will record GLAP's consent to the Change of Control Event and provide for the entry into other documentation referred to below. 2) A Deed of Guarantee and Release – This will document a guarantee from a JV guarantor in substitution for the existing guarantor under the MDA, BREPS LLP. 3) A Deed of Variation of the MDA – This will effect variations to the MDA which may be categorised as follows: 3.1) Variations which are consequential on the Change of Control Event, such as updating the definition of "Change of Control Event" and other definitions in the MDA which refer to parties connected to TSP, to reflect the revised corporate structure. 3.2) Variations which provide additional clarity or control for GLAP, such as the requirement for all works at Millennium Mills to form part of the 50 % of the development of Phase 1 which must be completed before the Head Lease for Phase 2 can be drawn down under the MDA. Two new "Milestone Events" are also to be inserted into the MDA, being submission of the approved planning application for the detailed planning permission for Phase 1 and the "Interim Phase 1 Completion Date" (which requires defined elements of Phase 1 to have achieved practical completion by that date). If Milestone Events are not achieved by the relevant "Milestone Dates", the MDA may be terminated. 3.3) Variations which correct minor drafting errors which have been identified in the MDA. 4) An Approvals Letter – covering: 4.1) Approvals issued by GLAP pursuant to the existing MDA provisions. These include adjustments to Milestone Dates for existing Milestone Events, which are being updated to ensure that A realistic timetable is in place to enable the project to progress. Other approvals include those in relation to an update to the existing business plan, a formal approval of the latest phasing plan and an amendment to the form of Head Lease attached to the MDA so that the alienation provisions allow for underlettings permitted by the sales and lettings strategy under the MDA. There is also a separate confirmation regarding such underlettings (or the associated agreements) occurring prior to the completion date for the relevant Phase; 4.2) Recording the current position in relation to certain aspects of the MDA, such as development expenditure incurred to date; 4.3) Confirmations as to GLAP's understanding of certain provisions in the MDA, in particular where two separate provisions in the MDA appear to be inconsistent; 4.4) Recording the parties' intentions and agreements in relation to, for example, the appointment of a group company of Lendlease Europe Holdings Ltd as development manager for the scheme following a phased transition from the existing development manager, First Base Limited.