Silvertown Quays, Royal Docks

Tender description

Silvertown Quays (SQ) is a 50-acre brownfield site in Royal Docks, London owned by GLA. In June 2013, following a procurement for a development partner, GLA entered into a Master Development Agreement (MDA) with the developer, The Silvertown Partnership LLP (TSP). In June 2018, a joint venture of Starwood (SOF-11 Developments UK Holdco Lux S.à r.l.) (SW) and a group company of Lendlease Europe Holdings Ltd (LL) acquired control of TSP. The parties entered into documents including a Deed of Variation of the MDA; see Mayoral Decision 2280 30/05/2018 (https://www.london.gov.uk/decisions/md2280-silvertown-quays), VEAT notice published 09/06/2018 (https://ted.europa.eu/udl?uri=TED:NOTICE:247611-2018:HTML:EN:HTML&tabId=1&tabLang=en), CAN notice published 26/06/2018 (https://ted.europa.eu/udl?uri=TED:NOTICE:272398-2018:HTML:EN:HTML&tabId=1&tabLang=en). The parties now intend to make additional changes to the MDA, considered permissible under regulation 72. Lot 1: A fuller explanation of the changes summarised below is in Part 1 of the associated Mayoral Decision 2784, which is publicly available on the GLA’s website https://protect-eu.mimecast.com/s/CTonCKLMGtLmEyPFMagEl?domain=london.gov.uk: Minimum Requirements and associated financial changes 1. GLA wishes to increase the quantum of Affordable Housing (AH) delivered as part of the development of SQ under the MDA (the Scheme) so that it meets current Mayoral planning policy relating to GLA owned land. This requires TSP to submit a planning application for a new Masterplan complying with two new “Minimum Requirements” (effective once a satisfactory new planning permission has been secured): a. 50% Affordable Housing - 50% of the residential space (by habitable room) must be AH. There is no equivalent Minimum Requirement or anticipated percentage in the current MDA but the existing outline planning permission for SQ provides for 35%. TSP will be obliged to ensure that at least 50% of the scheme's affordable homes (by habitable room) are delivered prior to delivery of 85% of total homes (by habitable room) in the Scheme as a whole. Restrictive covenants will be imposed in the Headleases securing the AH use. b. Non-residential area – the Scheme must include at least 167,225 m2 of non-residential floor space, to maintain a balance of mixed uses. The various specific Minimum Requirements in relation to non-residential floor space currently total 78,090 m2. 2. The changes at para 1 above have led to consequential amendments to the financial provisions of the MDA as follows: a. The Minimum Phase Value payable to GLA as part of each Headlease premium for the Scheme will now be calculated as follows psf GEA (the existing provisions are detailed in brackets): i. The first 1,831,818 sq ft (now excluding AH): £1 (£1) ii. The next 658,434 sq ft: £37 (now excluding AH) (£66) iii. In excess of 2,490,252 sq ft (now excluding AH): £46 (£81) iv. AH: £6.53 (previously within the above thresholds) b. GLA’s Phase Premium Share, the other component of each Headlease premium, is calculated as 50% of the Phase Premium Uplift Sum (a product of subtracting the Minimum Phase Value from the Revised Phase Value). This calculation will now take into account previously completed Phases rather than the Phase in isolation. c. The Developer’s Profit Rate for the purposes of the overage calculation will be fixed at 13% for all Phases as opposed to the current variable rate which is capped at 22%. This lowers the threshold at which overage would be due to GLA. d. Expenditure not attributable to any specific Phase will now be apportioned between the Phases on a fair and reasonable basis rather than being attributed to Phase 1. 3. If the new Masterplan consent materially departs from the assumed development strategy of 1.8m sq ft non-residential use, c.6,100 residential units with 50% being affordable in tenure with associated AH grant provision, GLA may propose revised financial arrangements to be agreed by TSP acting reasonably. Milestone Events 4. The MDA specifies project milestones (Milestone Events) which each have associated Milestone Dates, namely a Target Date, a Long Stop Date (extendable for Delay Events) and an ultimate Drop Dead Date (which are also extendable in the absolute discretion of the parties). Failure to achieve a Long Stop Date or a Drop Dead Date entitles GLA to terminate the MDA. The following changes are being made to the Milestone Events and associated Milestone Dates: a. a new Milestone Event for submission of the new Masterplan planning application; b. revising the Milestone Dates for implementation of Phase 1 works, originally drafted by reference to certain periods after detailed planning permission for Phase 1, to be fixed dates calculated by reference to the “Planning Unconditional Date” under the MDA which the parties agreed (by a letter of 29/03/2021) occurred on 30/06/2020; and Continued at section II.2.14 below. c. in relation to the Covid-19 pandemic, recording an extension of 6 months to the Drop Dead Dates for satisfaction of remaining conditions precedent and for Phase 1. A Covid-19 Delay Event extension of 14 months to the Long Stop Dates for those Milestone Events has been recorded separately under the existing MDA provisions. Continued at section VI.3 below