As most will be fully aware, proposals have been put forward to build a new Crystal Palace on the park top site. The deal would involve around £400m for the new building and £100m to refurbish the park in line with the designs of the existing Master Plan. Last week the council agreed to enter into an exclusivity deal with Mr Ni and his ZhongRong group from China to allow them to further develop their plans.
The proposal means that a lease would be given to Mr Ni for the park. He would develop the top site with his new Crystal Palace building. Details of what this would include are not finalised but it would include a large area of public access and exhibition space. The rest of the park would also remain for public use.
There is a substantial discussion on these proposals on the Virtual Norwood web site. But here is a report on the Council meeting that made the decision.
This is a report, not a personal view:
Apart from the elected members on the Executive, contributions came from Mark Bowen, Director of Legal and Democratic Services and Marc Hume, Director of Renewal and Recreation.
This Agenda item was only about whether or not to grant the exclusivity period so it was difficult to squeeze in some of the associated issues. However, many were touched upon.
There was enthusiastic support from the Executive for the proposal. The positives were emphasised – that the development would have a positive impact on the area, it would provide the funding to regenerate the park etc. They were keen though, supported by Marc Hume, to emphasise that this was all subject to a satisfactory and acceptable proposal emerging at the end of the next stage of discussions. There was never any doubt that the exclusivity would be agreed. The exclusivity deal itself has still to be negotiated and the terms are covered by confidentiality. Generally these agreements prevent the council from disposing of the property or actively seeking other bidders during the exclusivity period. This is to give the developer some protection for the large amount of money they will have to invest while working up their plans.
There was only limited discussion on whether or not to develop at all. The principle of development was accepted as the only way to raise the large funds needed to regenerate the park.
A plan showing the extent of the exclusivity area was distributed. The area included the terraces and an extension down to include the lake. However, this has no relationship to the area for development, which remains as the top site. The extended area was to prevent the council from entering into an agreement on the adjacent sites which might prejudice Mr Ni’s proposals.
Why the rush? Basically because Mr Ni (pron: knee) wants to get on with it and the council saw no reason to delay the process. It was the way the Chinese expected to work and with the safeguard of the planning process to come, why not?
But there may be other potential developers out there? If there are, they have done a good job at hiding. The council did not go out and seek Mr Ni. He approached them with a vision and enthusiasm that was hard to match. Others could do likewise. The door was not shut on other proposals and they could always be considered. Even with the change in the ground rules, it is unlikely that a genuine alternative would appear. Mr Ni’s proposals are based on a large dollop of personal commitment. The history of the site (3 previous, failed attempts to develop) demonstrates how difficult it is to find a satisfactory proposal. Mr Ni is in effect offering to pay £100 million for a lease. The only form of development that would actually justify such a sum would be a shopping precinct, which is out of the question. However, no agreement has been reached with Mr Ni yet, so other proposals can still be put.
Is the procurement process legal? Yes. Legal advice has been sought.
Would the amendments to the legal protection for the site, lead to an open season on the site if this proposal subsequently collapsed? Other forms of protection will have to be relied on. The wording of any amendments cannot be scheme specific but wording will have to be carefully drafted to build in as much protection as possible. The land will continue to be owned by LBB who will have the final say on any development. Normal planning rules will still apply.
What influences can we have on the proposals in relation to design, size and scale? Nothing is set in stone; that is the purpose of the engagement process.
What engagement process? Nothing will be agreed until there has been widespread consultation. Mr Ni says he is keen on community buy in. The Council has reminded him of the urgent need to make firm proposals on the engagement process. The Planning Application is expected in autumn 2014. This is an ambitious target and puts some pressure on the community to make the best of the opportunity to engage.
Will reports on the progress of the negotiations comeback to members? Yes there will be reports to the Executive as and when appropriate.
How confident are the council of Mr NI’s credentials? Due diligence has been carried out and is continuing using all sources available. There is no reason now to doubt his ability and resources to carry this project through.
But what is the fallback position if the scheme starts but then defaults? It is usual for the council to negotiate some form of financial guarantee or bond. This will be part of the exclusivity period negotiations.
What about the future viability of the scheme? This is a very important consideration for the council who don’t want to be left with a white elephant. Although Mr Ni has said he will bankroll the scheme for 10 years, the council will need to be convinced that the ongoing scheme is commercially viable to provide ongoing sustainability for the building as well as ongoing maintenance for the park.