In the midst of the retail-led regeneration scheme in Croydon, Tim Hellier, Paul Grace and Sam Burstall offer insights on securing a timely compulsory purchase order
Almost 20 years ago, in 1998, Croydon Council published its ambition to transform the town centre and with it Croydon’s image. Vision 2020 sought to regenerate key sites in the south London town and, as it evolved, reviving Croydon’s retail offer became an increasingly pivotal part of the strategy, with the limitations of the outdated Whitgift Centre well understood.
Over the next decade, plans came forward from Minerva (joined latterly by Lendlease) to bring forward the Park Place retail scheme, and a compulsory purchase order (“CPO”) to facilitate that scheme was promoted and ultimately confirmed in 2007. But as John Lennon said, “Life is what happens while you’re busy making other plans,” and the worst financial crash since the 1930s killed off hopes of bringing the scheme forward. It was back to the drawing board for Croydon.
Fast forward to 2016 and Croydon is on the up. In the fallout and gloom from the financial crash, two heavyweight developers, Westfield and Hammerson, saw the potential that Croydon presented and formed a joint venture (Croydon Partnership) to redevelop the Whitgift Centre site and adjoining land. Croydon Council regrouped and brought in an experienced new senior development and regeneration team.
But it would not be straightforward. The retail core in and around the Whitgift site was made up of a complex myriad of freehold and leasehold interests held by property companies, funds, an insolvent bank, major retailers, as well as circa 150 occupational interests. It is no coincidence that Croydon’s retail core has been so challenging for developers. A new CPO was required.
In the space of just three years, Croydon Partnership has come from a standing start to secure planning permission in early 2014, followed by a confirmed CPO and stopping-up order in September 2015.
The scheme is a £1bn-plus mixed-use retail-led regeneration of circa 1.5m sq ft, improved town centre permeability and public realm and up to 600 homes, which will create around 5,000 jobs.
Planning for turbulence
Compulsory purchase involves the forced sale of third-party land and is therefore a rigorous process. On a complex site, a considerable amount of work needs to be front-loaded on matters such as land referencing, negotiations with affected landowners and occupiers and demonstrating that the scheme is deliverable. To reduce overall timescales, preparations for making the Croydon CPO were undertaken in parallel with the planning application process. A stopping-up order also needed to be secured. Aligning the planning, CPO and stopping-up procedures required meticulous preparation to facilitate a programme that met the objectives of the council and the partnership.
Promoters of CPOs should be prepared for tactical and commercial objections from those whose land is being acquired, who will often seek to slow down the process for negotiation purposes. In the midst of the Croydon CPO process, the council and the partnership had to defend a judicial review of the planning permission in the High Court brought by a landowner.
Heading into one CPO inquiry, an objector was overheard briefing his barrister to use his cross-examination to “keep the pressure on” for the parallel negotiations taking place over compensation. This is the commercial reality of the CPO process.
Only one shot at a CPO
CPO is not the forum to embark on speculative proposals. While there is some overlap, securing a confirmed CPO requires a different and broader test to be met to the planning process. The central test is demonstrating that there is a compelling case in the public interest to justify sufficiently the interference with the human rights of those with an interest in the land affected. If a CPO fails to be confirmed, there is usually no way back for the scheme after what will have been a costly and time-consuming process.
For the past 15 years or more, it has been a central objective of the council to realise the potential of Croydon’s retail core, which has become increasingly outmoded over that time compared with competing centres in London and the South East. Westfield and Hammerson both have second-to-none experience of delivering high quality retail-led development. The proposals have strong support from the London Plan and Croydon’s up-to-date planning framework. Against this background, the scheme was well set to satisfy the test to justify the use of CPO powers.
Wider legal and valuation issues
In addition to establishing the case for a CPO and undertaking what can be extensive land referencing activities, preparations for making a CPO typically require consideration of wider legal and valuation issues, such as procurement, state aid and best consideration. These should be considered at the outset, working closely with specialist legal and valuation advisors.
“Old school” cross-examination
In contrast to the predominantly written development consent order infrastructure planning process, where cross examination of witnesses is almost unheard of, when objections are made in the CPO world a traditional inquiry will be held. Witnesses need to prepare fully and ensure their evidence will stand up to forensic scrutiny.
On the Croydon CPO, a number of landowners went down the well-trodden path for commercial objectors of trying to persuade the inspector that they were ready and willing to bring forward their own proposals, or would participate as investors in the scheme. Such objections can occasionally succeed, but inspectors, as was the case with the Croydon inquiry, are generally alive to the fact that excluding interests from a CPO in the expectation that a deal will be reached would leave an objector with an extremely strong negotiating position which would inevitably undermine delivery of the scheme.
“Viability” is another concept which is often attacked by commercial objectors to a CPO. An objector to the Croydon CPO put forward the case that demonstrating viability in accordance with the RICS guidance Financial Viability in Planning was central to the test to be applied by the secretary of state in deciding whether to confirm the CPO. This approach was rightly rejected by the inspector and secretary of state. RICS guidance is concerned with viability in the planning process and is principally a tool to assist with assessing section 106 and affordable housing contributions. In the CPO context, the test is not whether the scheme is “viable” in a narrow, financial appraisal sense, but a broader judgment of “whether there is a reasonable prospect of the scheme being delivered”.
Developer’s experience and track record
Demonstrating deliverability, while of little relevance to planning applications, is central to securing a CPO. Public sector partners should seek a developer who has a track record of delivery. Croydon has suffered from stalled regeneration plans and the experience of Westfield and Hammerson working with the council was essential to tackling Croydon’s retail core. The Croydon project partners were ready for the long haul and had a strong history of delivery, even in challenging economic conditions. A less convincing developer past performance would have been more vulnerable to attack in the CPO process.
In summary, on sites where land ownership is complex, CPO remains a vital tool if the objectives of planning policy are to stand any chance of being met in a reasonable timescale. A visitor to Croydon’s town centre today would be rewarded by the healthy sight of cranes, which increasingly adorn the skyline. Work continues to enable scheme delivery but the process to date sends out a strong signal that Croydon and the UK has a planning system in place that can operate effectively and reasonably swiftly. In the past, it has not been unknown for similar schemes involving CPO to take up to a decade. But thanks to a rigorous approach to planning and delivery, those aspirations of the planners from the 1990s for a revitalised Croydon in the run up to 2020 are getting closer to being realised.
Tim Hellier is a partner, Paul Grace associate director and Sam Burstall senior associate in Berwin Leighton Paisner LLP’s planning and environment practice. The team advised Westfield and Hammerson on the planning and CPO process.
