Will the development corporation model deliver at Old Oak Common?

After a year that has seen senior managerial upheaval and bitter criticism from a major local landowner, the Old Oak and Park Royal Development Corporation has been backed with £250 million of government infrastructure funding. Will the development corporation model now deliver, Stuart Watson asks

Old Oak: questions over effectiveness of development corporation model
Old Oak: questions over effectiveness of development corporation model

On 1 April 2015, former London mayor Boris Johnson launched the Old Oak and Park Royal Development Corporation (OPDC).

The corporation was charged with harnessing the planned construction of new stations for the High Speed Two and Crossrail rail links in west London to catalyse the development of one of the UK's biggest regeneration projects across a 650-hectare site. Some 25,500 new homes and 65,000 jobs were promised.

At the time, Johnson argued that a development corporation with planning and compulsory purchase powers was the best model to co-ordinate and speed up delivery in an area that straddles three London boroughs: Hammersmith and Fulham, Brent and Ealing.

The four years that have elapsed since have been turbulent ones for OPDC. In that period, the terms on which the development corporation was founded, its operational decisions, and its perceived slowness in delivering, have drawn flak. However, the announcement in March of £250 million of government Housing Infrastructure Fund (HIF) cash now offers the prospect of a new dawn for the organisation, even if further challenges lie ahead.

OPDC is a mayoral development corporation (MDC), set up by the Greater London Authority (GLA) and reporting to City Hall. It has both plan-making and development control powers within its boundaries, statutory powers relating to infrastructure, regeneration and land acquisition and it can set a Community Infrastructure Levy. However, it does not directly own or control any land.

Instead, OPDC has the option to buy 97 hectares of Network Rail and government land at existing use value as the construction of the rail infrastructure progresses and the land becomes surplus to operational railway requirements. However, after he entered office in 2016, Johnson’s successor Sadiq Khan criticised the option agreement for being entered into too hastily and on terms that were unfavourable to the corporation.

That was only the beginning of OPDC’s problems, however. At around the same time, it became clear that the new Crossrail rolling stock depot at the heart of the site had been constructed without the structural features that would have allowed development above it, effectively sterilising a large portion of the southern part of the redevelopment area.

Responsibility for those misfortunes could not be placed at OPDC’s door, since the decisions leading to both predated its creation. However, the corporation was subject to more direct criticism in February this year when Cargiant, a second hand car dealer that says it is London's biggest and occupies a large and crucial part of the Old Oak site, delivered a broadside accusing it of a "cock up" that rendered the plans for the area "unviable, unaffordable and undeliverable". The company claimed the OPDC had failed to address the cost of Cargiant’s relocation and the provision of site infrastructure.

A senior planner familiar with the issues at Old Oak argues that OPDC’s setup is flawed: "It was not given money to do anything other than commission consultants, it didn’t have resources to buy land or put in infrastructure, so it rapidly became a bureaucratic organisation which has complicated things rather than facilitated them. They have busied themselves preparing plans and policies, but they were supposed to be more than a planning authority. All that has happened to date could have happened had they not been in existence."

Nicholas Falk, founder of consultancy URBED, says: "Development corporations should help in joining up development with infrastructure and packaging public and private finance. They should also be able to take a longer time perspective than other vehicles and acquire land at close to existing use value. However, I believe the Old Oak Common development corporation has had limited access to funds for investment and there are huge problems in dealing with all the site's railway lines."

One problem that OPDC has certainly faced in the past year has been a series of changes in its leadership team. Its first chief executive, Victoria Hills, stepped down in April 2018 to become the new chief executive of the Royal Town Planning Institute and its former planning director, Michael Mulhern, took over as interim chief executive. Mulhern resigned in March and has been replaced on a temporary part-time basis by David Lunts, who will continue to discharge his duties as the GLA’s executive director of housing and land alongside his job at OPDC.

The former British Property Federation chief executive Liz Peace, who has chaired OPDC since March 2017, says: "I do think the public sector can sometimes spend a little bit too long talking about what they would like to do rather than getting on with it, but on the other hand we have a fairly rigorous planning and plan-making structure and it is very difficult to do anything if you haven’t been through that process."

Peace insists that a dedicated regeneration-focused delivery body can make a difference at Old Oak Common: "We can take a broader overview of what is possible in the area, we have statutory powers, we have staff, we are close to the mayor, we have a board with some very good professionals on it. It would have been easier if we had first-hand control over a greater part of the land, but we didn’t."

OPDC’s local plan will go to examination later this year. Among the achievements the corporation claims so far are 3,824 homes completed or started, and a further 5,992 approved or benefiting from resolutions to approve, mostly on the fringes of the area. Meanwhile, consultancy AECOM is leading the production of a masterplan for the area. That task cannot be rushed, says the firm’s cities programme director in London Andrew Jones. "This is a hugely complicated site with lots of bits of infrastructure and land availability barriers. You have rail lines criss-crossing the site, a canal running through it, limited road access into it, and a couple of major new infrastructure projects. At the moment, developers would be put off by the scale of the challenge. If you can work up infrastructure funding, align different stakeholders and get transport providers all in one place then those issues start to become manageable. It is a long game."

The next move, says Peace, is to negotiate the conditions of the HIF funding and then get on with spending it because it must be deployed by March 2023. According to the OPDC, the £250 million will be used to "assemble land, design and build vital roads and utilities infrastructure" necessary to develop the proposed 10,000-home Old Oak North scheme, close to the planned HS2 railway station.

The recruitment of a full-time chief executive is also a high priority. After that, OPDC will look to finally get its hands on some land by acquiring sites through its agreement with Network Rail, which can then be used to enable future development. "Buying land allows you to spend the money quickly and then, in a way, that acts as your bank," says Peace. Further HIF funding will go towards infrastructure, including a distributor road to improve access to the heart of the site.

That plan will bring OPDC into further conflict with Cargiant, because the current proposed route for the road runs through the latter's site. The landowner says that it only reluctantly agreed to work up redevelopment proposals for its 19-hectare site, but its Old Oak Park scheme was subsequently rejected by OPDC as unviable. Cargiant argues that OPDC’s alternative Old Oak North plans for the site are not viable either, as they will not generate an uplift in land value sufficient to pay for the firm's relocation as well as infrastructure and affordable housing provision. Furthermore, it contends that the distributor road will render its business unviable, making OPDC liable for extinguishment costs of £600m to shut the business down.

Peace says she wants to put talks with Cargiant "back on track" and find a solution that allows the road to be constructed and Cargiant to carry on its business until at least 2026 when the HS2 station is scheduled to open.

There must be no "dilly-dallying" at Old Oak because the area has a pressing need for new homes, says Andrew Dakers, chief executive of local business advocacy group West London Business, of which Cargiant is not a member. "All parties need to get back round the table and have a detailed, adult conversation so they can fully understand the requirements for Cargiant to relocate. Then OPDC, Cargiant and their advisors need to roll their sleeves up and try to identify alternative sites. It is not impossible," he argues.

He adds that he is "broadly positive" about the impact of OPDC on the area: "We have three local authorities involved in Park Royal and we felt too often it was falling between the cracks, so having an over-arching body can only be a good thing."

It could be argued that in taking on a site of such complexity, while armed with limited money and no land ownership, OPDC has been dealt a difficult hand to play. However, the recent award of HIF funding partly removes those excuses. At Old Oak, the plan-making phase is almost over and it is time for OPDC, in Peace's words, to "get cracking."

England's eight other active and proposed development corporations

The London Legacy Development Corporation was established as a mayoral development corporation (MDC) in 2012 with responsibility for delivering the legacy plans for the Queen Elizabeth Olympic Park in Stratford. It owns the majority of land in the 226-hectare park and has both development control and plan-making powers. It is also the planning authority for parts of the area surrounding the park, covering a total of 480 hectares.

In 2015, the Ebbsfleet Development Corporation was set up by the government to speed up delivery of the Ebbsfleet Garden City in North Kent and was charged with delivering 15,000 new homes and 30,000 jobs. All of the land within its remit, covering 1,000 hectares, is in private ownership and plan-making powers remain with borough councils in Dartford and Gravesham. However, it does have development control powers as long as projects meet with the objectives of local plans. It can also fund infrastructure by offering loans that are recouped when projects are built.

England’s first metro mayors took office in 2017 and among the powers granted to them was the ability to set up their own MDCs. The first such body, the South Tees Development Corporation was created in August 2017 to oversee the regeneration of 1,800 hectares including the former Redcar steelworks. It has land acquisition and compulsory purchase powers, and in February acquired 570 hectares of the site, but planning functions are retained by Redcar and Cleveland Borough Council. The Greater Manchester Combined Authority has also announced that it intends to consult on establishing a mayoral development corporation for Stockport town centre. City-regional mayor Andy Burnham has said that another Greater Manchester council has lodged a bid with him for another MDC.

In June 2018, the government announced that councils would be able to apply to create locally-led development corporations to deliver large scale settlements under the garden communities agenda. To date, none have been established, but three district councils in north Essex – Braintree, Colchester and Tendring - plus Essex County Council are working with civil servants to explore options for the creation of a North Essex Development Corporation, to progress three new garden communities in the area.

The government said last month, in its response to last year's Thames Estuary 2050 Growth Commission report, that it would explore the potential for "at least two" new locally-led development corporations in the Thames Estuary. 

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