The City of London is considering using compulsory purchase powers to break an impasse on a major new development.
The City Corporation is eager to facilitate plans by Italian insurer Generali to build a 420,000 sq ft, 15-storey tower at 120 Fenchurch Street, EC3, which have been held up by an entrepreneur refusing to sell a small building within the site.
The 390,000 sq ft of offices planned for the development have been earmarked by M&G as its preferred option for a new 300,000 sq ft City HQ.
Former Weatherall Smith agent Giles Rooney owns the long leasehold to 118-119 Fenchurch Street through his holding company Linville. The Clothworkers’ Company owns the freehold.
Generali is understood to have made several offers to buy the 5,000 sq ft strip for substantially more than its latent value of around £1m.
However, Rooney, who is being advised by Savills, has yet to agree a deal.
Generali won planning permission for the scheme in March 2012 subject to a section 106 payment of £2.6m and a Crossrail contribution of £2.3m.
A source said: “This is a rare opportunity for the City to replace several redundant buildings with a significant new development. You can understand why they want to make sure this doesn’t jeopardise it.”
The City has a long track record of intervening to expedite developments it considers essential to its future as a global business hub.
In 2011 it intervened to assist the development of Land Securities’ and Canary Wharf Group’s Walkie Talkie at 20 Fenchurch Street, buying a stake in the project that allowed it to protect the scheme from rights of light injunctions.
CBRE is advising Generali; Knight Frank is acting for M&G.
jack.sidders@estatesgazette.com
