The King Alfred Development Agreement comes to PRG Dec 6…but!

29.11.18…..Both Crest Nicholson (with Starr Trust) and Brighton & Hove City Council officers must collectively surely all be on tranquillizers by now or ready to take to the bottle to steady nerves.  The report going to Policy Resources and Growth on December 6 is 20 pages of high intensity stuff.  A lesson in what it takes to put a development together financially, to ride the political and economic waves whilst gambling with mega-millions that you can get it done and sold and move on with profit instead of ruin.

We learned from the Karis attempt that viability was marginal.  And in the end it was probably not doable and why they lost backers ING and were unable to use their ill gotten planning consent.  It is with the Crest/Starr attempt too.  But there is an almighty battle going on by all parties to make this one work.  It is an heroic effort, regardless of what we think or feel or what dismay we harbour towards the enabling collossus needed in order to deliver a leisure centre to BHCC….as specified….

It may or may not squeeze through the pitfalls ahead.

Here is the 20 page report going to committee.  It is quite a read.

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The i360 debt restructuring issue comes to PRG Dec 6 but….!

28.11.18…..The i360 is in deep financial difficulty….but soon after opening, so was the Marks Barfield London Eye and the special person who got it out of trouble is now tasked with rescuing the i360.  Read on!

Frank le Duc has waded through the 3 documents and put up an article on Brighton and Hove News that is your quick way to understand what is happening now that i360 cannot meet its interest repayments to BHCC on that whopping loan they got from us.

One-year breathing space for Brighton i360 as new boss takes charge

And these are the relevant documents going to Policy Resources and Growth for decision and AGREEMENT on December 6…..!

https://present.brighton-hove.gov.uk/Published/C00000912/M00008108/AI00070453/$20181128114354_018007_0061586_CommitteeReportTemplate210617newsavedformat.docxA.ps.pdf

https://present.brighton-hove.gov.uk/Published/C00000912/M00008108/AI00070453/$20181128114354_018210_0061587_FinalGVABrightoni360RefinedOptionsPaper271118.pdfA.ps.pdf

https://present.brighton-hove.gov.uk/Published/C00000912/M00008108/AI00070453/$20181128114355_018211_0061588_LDPReportDecPRGREDACTEDKPIS.pdfA.ps.pdf

King Alfred: keep calm; so far, its all carrying on!

23.11.18…..I need to put something up right now to keep the story STRAIGHT because a wrong steer from an Argus article seems to have inspired a wrongheaded letter to the Argus as well as questions from Cllr Druitt at Tourism, Development & Culture Committee on 22nd November.  I refer readers to a previous post here which gives VERBATIM the questions to a Council meeting and the VERBATIM replies!  THAT is the truth.  Two deadlines, if you like, for Crest to deal with, NOT a final one “to sign” by 24th October!

So, here is the position TODAY!

On Tuesday when the Argus letter appeared, and featured online as well, I invited Rob Starr to comment behind it.  He rang me.  In our conversation he told me that all the lawyers for all parties were meeting in London on Wednesday to finalise details for the Development Agreement, giving time for prep of the Agenda item which goes online by noon of the 29th, for the December 6 meeting of Policy, Resources & Growth which  has to sign off the Agreement.   As far as Starr is concerned (The Starr Trust is a 50% partner with Crest Nicholson), it is all going ahead.  Crest  would only pull out if they fail to get planning consent for the scheme they won the bid on, is his position.

Thursday afternoon,  Green Party Cllr Druitt asked two King Alfred questions….neither of which would have been necessary if the Argus article he referred to had been correct and if officers had been keeping opposition councillors in the loop! There has been a truly shameful sidelining of the Project Board which involved a councillor from each party on it.

He asked (1) “How much more time is the council willing to give Crest Nicholson to consider the viability of the KA development, and to what extent has Brexit played a part in the uncertainty surrounding the scheme’s viability” as well as (2) “If the Administration had maintained the King Alfred Board is there a possibility that the project may have benefited from closer scrutiny, allowing us to have progressed one way or another, past the current stage?” 

Nick Hibbert replied for the Council in a way that gave little away.  No mention of lawyers meeting even!  Such is the pressure on officers concerning this scheme!  He confirmed that Brexit has impacted on viability, that since gaining agreement for the £5.2m towards the affordable housing (Sept, from Govt agency), they have sought a firm commitment (that 24th October deadline to reply with commitment to sign by the end of the year) and that a report would be coming to PRG on 6th December.  Nothing new there whatsoever.  To the 2nd of Tom’s questions he merely said they were “looking at a proposal to see if it is deliverable….report on the 6th December”.

Make of that what you will, but, everyone, please don’t speculate or assert in ways that confuse people or create a multitude of competing rumours.  And be careful who you listen to and what axe they have to grind!  Check the facts!  We all need to keep a very clear head on this to be effective going forward.

Reliable Local Democracy reporter Sarah Booker Lewis also attended this Thursday council meeting and her report is posted to both Brighton & Hove News and The Argus websites.

King Alfred….Crest news expected at PRG in December….probably

02.11.18…..In the wake of the 24th October deadline for Crest to commit to signing the Development Agreement by the end of the year, and their reply requesting more time, a few moves and details have emerged that can be passed on here.

Firstly, whilst saveHOVE was unable to get the Argus to do an article, complaining Tory cllrs were more successful.  See the error-strewn result in What the Papers Said.  The 24th was NOT a final deadline for signing anything. The comment trail is of more interest, including a couple of comments as Rob Starr weighed in to defend himself there.

See the King Alfred article on this blog giving chapter and verse as provided to saveHOVE by the council leader himself about the 24th deadline for a LETTER of COMMITMENT.

The cllrs did have one valid point to make, however.  Ward Cllr Andrew Wealls tweeted saveHOVE his frustration at being entirely out of the loop.  And this seems wrong; but if I can email the council leader and get facts I think cllrs could do so too.

And I did.  Cllr Yates informed me by email on the 25th that a meeting would take place on Friday, 26th October between Crest Nicholson and the council.  He further indicated that “if required I’ll make a further statement before that if the position changes or we need to be clearer sooner”. In tweet exchanges it was made clear that not even he was invited to attend.  It was expert officers on their own who met with Crest (and presumably Rob Starr too).

And the result of that meeting was….?

In a further, 29th October, email to saveHOVE Cllr Yates confirms that a report is “due” to go to Policy, Resources & Growth Committee on December 6th “and updates will be undertaken with wards cllrs, group leaders (Yates, Janio and MacCafferty) etc well before then”.  The PRG Agenda is normally published on the council website one week ahead of meetings, by noon on the Thursday.

It is a good idea to monitor the financial press for any news of Crest Nicholson’s financial position in the meantime.  As with the previous schemes from Karis and City Grove….financial viability within Crest as much as for the scheme itself has become questionable.

 

Crest Nicholson fail to commit – seek delay for King Alfred Development Agreement

25.1.18…..At the end of yesterday I emailed Council leader Cllr DanYates and Rob Starr enquiring after the letter which BHCC required of Crest Nicholson committing to signing the Development Agreement by year’s end.  I have had no replies as I write at 2pm, but BHCC have now issued a Press Release:

“Following formal confirmation of funding in September from the Housing Infrastructure Fund the council has been working with Crest Nicholson Regeneration to conclude the development agreement.

The council wrote to the developer earlier this month to ask them to confirm their commitment to the delivery of the King Alfred scheme. We have received a response from Crest that restates their commitment but which is seeking a little more time to further update their viability appraisals. The council continues to be in contact with them and we are expecting a more detailed response shortly.

 “In parallel with the developer’s ongoing viability review, the council will meet with them to agree options for progressing delivery of the scheme.  We remain committed to ensuring a scheme which delivers a new leisure centre and pool complex for Hove alongside a significant housing development

“We will provide an update on the project at the Policy, Resources & Growth Committee on 6 December.

Many thanks to Bex Bastable at the Brighton & Hove Independent who got this first and shared ahead of going to Crest and doing a wider report for the paper.  The free print edition comes out on Friday.  Available in Hove outside the Blatchington Road newsagent and at Hove Library.  Keep a lookout Friday for an online piece after contact is made with Crest.

Over the last couple of days, I have had email with David Jewell and David Ford about Crest Nicholson, looking at concerns about the company, now vulnerable to takeover bids.  Knowing what the financial press have had to say about them is important to any understanding of what the press release is telling us.  But viability issues around construction cost rises are a serious consideration and I refer you to the article I put here on King Alfred two days ago about my questions to two council meetings and email from Rob Starr.

David Jewell observed:  “I note the profit warning issued by Crest to the London Stock Exchange a few days ago and the fact that their Finance Director, appointed in 2017, has been “let go”. Crest state that they want to reduce their stake in aspirational housing, i.e. houses worth more than £800,000, and to invest less in their land bank as well as shift some of their stock of £600,000 houses via “block” sales.

Crest Nicholson issued a press release dated 17 October 2018  advising the London Stock Exchange and investors of the Company’s expected results prior to the end of its financial year on 31 October. With the slow-down in sales being experienced in the second half of the year, particularly in higher value “aspirational” housing, the Company expects profits to reduce to around £170-190 million in 2017/18 against £207 million the previous year. Margins are also expected to reduce to less than the 18% previously expected. As a result the company has come up with a new strategy including taking steps to maximise the value in its portfolio. In order to preserve the value embedded in its land and development pipeline, the Company is pausing its growth ambitions to align with current market conditions, slowing down build rates and reducing land expenditure. The Company believes that by maintaining current levels of output from its high-quality land pipeline, rather than driving for revenue growth, it will improve the level of free cash flow generated by the business. The Company states that it has made good progress in growing its sub-£600k homes by recycling capital from more challenging areas and higher prices. The Company’s Chief Financial Officer, appointed in 2017, will be leaving shortly.”

Chris Hawtree spotted this from The Telegraph on 22.10.18

David Ford sent me a link to an ominous piece from The Guardian

What I wonder now if this.  Are we looking at a revised upward cost for the scheme which the council will have to perhaps contribute more to?  Are we looking at a repeat of the Karis visits to P&R to increase the number of flats to make it more viable?  Or are we looking at Starr losing Crest and having to find someone else to deliver the housing part of the scheme?  Or abandonment of it all.

The two Davids speculate about a chess move from Crest….would signing be a poison pill to put off takeover bidders?  What move is most advantageous to Crest as they manoeuvre in choppy waters?