Authority will take stake in Prussian Blue scheme to counter right-of-light disputes
The City of London has agreed to acquire a stake in a 50-storey Wilkinson Eyre scheme to help the developer combat right-of-light disputes that could scupper the project.
Mitsubishi Estate last year won planning permission for the development, at the corner of Bishopsgate and Leadenhall Street, which will deliver 86,000sq m of office space, along with a top-floor public viewing gallery and shop, café and restaurant space. The proposals are 10 storeys taller than an earlier incarnation of the scheme approved in 2015.
Earlier this year, the developer – also known as MEC London Property – warned the City that the prospect of disputes with neighbouring landowners over the impact of the scheme meant it was unable to commit to around £24.5 million of groundworks and foundations over the next six months.
It said the delays would push back the scheme’s 2022 completion timescale and called on the City to intervene by taking a stake in the development, which allows it to use powers under the Housing and Planning Act 2016 to ensure that a project can be carried out within a reasonable time.
A report to Tuesday’s meeting of the City’s planning and transportation committee said MEC had told officers that the scheme’s development programme could not be met unless right-of-light claims were settled or the authority intervened using its powers under Section 203 of the act.
“Completion in 2022 is considered in the public interest due to anticipated imbalance between supply and demand for new stock at that time, based on the City’s employment trends,” it said.
“In order to maintain the development programme, commitment to the groundworks and foundations packages totalling approximately £24.5m needs to be made in the fourth quarter of 2018 and the first quarter of 2019.
“The developer advises that having already expended approximately £36m in respect of the development to date, [it] is not able to make this further commitment while there is a significant risk to this investment, in that a third party could seek an injunction.”
Documents provided to the planning and transportation committee said that as of July, settlement terms had been agreed with 19 parties in relation to 35 buildings acknowledged to have rights-of-light issues arising from the Prussian Blue development. Terms were agreed with a further 18 parties in relation to another 34 buildings also seen as being affected in a way that was potentially actionable.
The report said the City’s property advisory team was satisfied that MEC’s request for the corporation to intervene was a “credible and legitimate approach” that was far from unique to the developer.
Committee members resolved unanimously to approve the acquisition in principle, subject to the town clerk being satisfied that appropriate indemnities were in place.
The owners of RSHP’s Leadenhall Building were among the objectors to Wilkinson Eyre’s Prussian Blue proposals when the 50-storey version of the scheme was approved last year.
They complained that the10-storey increase in height would “negatively impact on the amenity” of the most high-profile occupiers on the upper floors of the building by infringing on their views to the west.
Officers rejected the complaint. “This is a private view from an area that is not publicly accessible,” they said. ”There is no right to, or protection of, such views.”