Sadiq Khan has approved a £10m grant for the Old Oak and Park Royal Development Corporation to unlock the city’s largest regeneration project.
The finance will help the development agency to unlock its £250m government grant to kickstart development at the £26bn Old Oak development.
The Greater London Authority said the funding will be expected to be recovered from the Housing Infrastructure Fund grant.
It includes £1.8m to be paid in the first instalment, with future allocations to be made in agreement with GLA’s chief of staff in consultation with the executive director of resources.
The first payment will support an immediate expenditure of £4.5m, to cover management support, land assembly, planning and transactions. The remaining £2.5m will come from the OPDC’s existing budget.
Chief of staff David Bellamy will review the progress and risks every month and sign off on future payments.
GLA documents stress that the OPDC regeneration plans are “fundamentally based” around HS2, and warns of “political speculation” around its future to be assessed before funding is released.
The loan requires mayoral approval for a number of operations, including Compulsory Purchase Orders, new employee hires, external financial assistance, and expenditure outside of the approved budget.
A spokesperson for the Mayor of London said: “The mayor is working closely with the Old Oak and Park Royal Development Corporation to develop this complex site that requires careful planning and investment.”
The grant money from the GLA comes just weeks after OPDC interim chief executive David Lunts warned the development agency would be unable to unlock the £250m HIF grant without additional finance.
Lunts also said the OPDC was exploring various new sources of capital, including the possibility of private sector joint ventures and public sector loans.
Khan’s additional £10m comes on top of the existing £9.5m budget and £0.45m add-on, bringing the total GLA funding for the Old Oak project to £19.95m.
The OPDC was setup in 2015 by former mayor of London and now prime minister Boris Johnson to deliver around 25,500 homes at the 1,600 home site. Published accounts show that the agency had spent £29.4m by the end of 2018/19.
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