Tag Archives: nama

Battersea Power Station: Out of the frying pan into the fire

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The horror story continues…

Nightmare on Nine Elm Street

The abysmal Vinoly plans for Battersea Power Station that we had all hoped were finally dead and buried with the collapse of previous owners REO has come back to haunt all who care about the beautiful building and the quality of life for all those living in its shadow and the surrounding area.

Just when you thought it was safe Architect Viñoly has been hired as “creative brain” behind developer Mike Hussey’s plan for a new stadium for Chelsea football club. AAAHHHHHHGGGGG……

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REO collapses into administration

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Real Estate Opportunities has been put into administration by a UK judge after its owners failed to repay debts of £501m owed to Lloyds Banking Group and Ireland’s National Management Asset Agency (NAMA).

Administrators Ernst & Young have taken control of the Grade II listed red-brick building and will now either sell the site or the debt to recover the amount owed. The creditors initially called in the loans on 29 November and REO was inviting offers for its controlling stake in the site soon after.

Lloyds told the Guardian: “From the outset we have been determined to secure a buyer who will kickstart the regeneration of Battersea Power Station and we have done everything possible to give the owners both the time and financial support to achieve this.”


“However, after several months of discussions and still no acceptable offers on the table, administration is the only means we have to ensure that a sales process is put back on track. Without a financially stable owner, the site’s future remains unclear and that’s a situation we want to avoid.”

Keith Garner of the Battersea Power Station Community Group, which opposed the Irish company’s plans, called for the power station to be returned to the public sector, with repairs to be funded by the Heritage Lottery Fund.

The group said on its blog: “For the Battersea Power Station Community Group it is just another ‘new beginning’ as the fourth developer limps off stage to boos and jeers.”

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Real Estate Opportunities “debt D-day” approaches

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The financial credibility of the owners of the Battersea Power Station site, REO (Real Estate Opportunities) faces a strong test on the 31st of August when payments are due to both NAMA – the Irish toxic debt bank – and Lloyds Banking group. REO’s creditors have recently appointed Ernst & Young as insolvency advisers in advance of the 31st August deadline. Further details on the ‘debt D-day’ are available via the  The Telegraph and Co Star Group.

The Battersea site was bought in 2006 by REO, which is in majority owned by Irish group Treasury Holdings. This purchase occurred during the craziest period of the Irish property bubble. We can see remnants of the bubble in the current development proposal for the Power Station site. The plans bear all the hallmarks of the worst in speculative urban development that occurred during the bubble. However London has remained somewhat immune to the property bubble, and developers are happy to continue with business as usual and forget anything ever happened. This ‘developers dementia’ is of course good news for REO’s creditors NAMA who have been actively encouraged by some commentators to keep inflating a London property bubble.

Within all of this financial wheeling and dealing the real question is being ignored. That is not how long REO can sustain its current level of debt, but one of how long more the planning authorities in London will go on supporting the speculative urban development charade that inflates such bubbles.

The Battersea site is to be developed with a FAR (Floor Area Ratio) of roughly 5.0. This density is above average for London and well above an acceptable maximum density for a northern European city. Such densities sacrifice important basic human needs like daylight and turn open spaces and streets into canyon like wind tunnels. The only purpose such densities serve is to maximise short term profits for developers.

London’s planning authorities need to develop new thinking and approaches to the development of such iconic locations. Which have at their heart urban design that pays regard to human scale and the longer term societal, environmental and cultural needs of the city, rather than pandering to the demands of the demented developers.

 

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Or visit PlanA our general blog on urbanism, planning and architecture.

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