Imperial’s response on financing queries

The College sent a response to some of our queries on the the financing of the Imperial West development.  But its letter of 6th March 2012 answeres none of our specific questions.  In the interests of fairness, we have posted below a link to the letter.

We continue to believe that the College could have chosen to develop the Imperial West site without a commercial financial partner, with a much lower commercial content, and at a density and building height that would have made it a good neighbour to the surrounding area.

Imperial’s letter is here IC Letter of March 2012

The questions we asked Imperial were:

  • who in reality is ‘the applicant’ for the current planning application? Is the College in the driving seat (as we have been assured) or the joint venture company Voreda Capital?
  • what is the explanation for the statement in the College 2012/11 accounts saying The College, through the College Fund, sold a 150-year lease over land at the Imperial West site for cash proceeds of £22 million and generating a profit on disposal of £18.2 million’?
  • What land has been sold, to whom, and what has happened to the ‘profit’ ?
  • Is the College a 50% partner in Woodlands 1 LLP, and a 50% stakeholder in the Woodlands 1 LLP lease?
  • Who are Voreda Woodlands Holdco, registered in the Isle of Man,
    who feature on some of the Companies House documentation for Woodlands 1 LLP?
  • The Financial Statements for Woodlands 1 LLP, for December 2009 to March 2011, end by stating ‘There is not deemed to be one controlling party’ for the company.   Does this mean that there is shared or divided control between IC and Voreda, and hence divided control of the development and the planning application?
  • What explanation is there for the following statements in the November 2011 report on Imperial West to the College Council?  How are these statements compatible with a planning application which claims that any affordable housing would make the scheme unviable?‘The scheme has the flexibility to deliver either future academic buildings or profitable development sites. The brief of 2/3 academic and 1/3 commercial use delivers an indicative post planning land value of £58m versus the £28m cost – a net uplift of £24m after planning costs of £6m’.and  ‘£12m of land gain has already been secured through Phase 1 and the planning work undertaken will remain valuable for any future schemes for the site’.

We have got nowhere in pursuing these issues with Imperial College.  We made very clear to LB Hammersmith & Fulham that we expected the local authority to pursue these issues, before any decision was made on the planning application.

There is little sign that this has happened.  As with any developer proposing a development with little or no affordable housing, Imperial were required to provide a ‘Financial Viability Assessment’ of the development.  This is needed in order to establish the level of affordable housing that a developer should be able to provide, while also making a resonable commercial return.

The viability assessment provided by Imperial was put together by its own long-term property consultants (Savills).  The council then had this assessed by the District Valuation Service.  Like all such assessments, the council does not make these documents public, on grounds of commercial confidentiality.  LBHF goes further in having adopted an unusual ‘protocol’ which means that even councillors only get to see these assesments by special request and under the eyes of security guard, and are then not allowed to discuss the contents with anyone (even their fellow councillors on the Planning Applications Committee).

In these circunstances, the only way in which a councillor can ask questions about the assessment is by the Planning Applications Committee moving into confidential session, excluding the public.  This happened on July 25th in the case of the Imperial West application. But there is of course no public knowledge of what questions were asked or what answers given.

Hence there as yet no answers to basic questions about what level of profit or investment return Imperial College is expecting from the completed development.  For a university body (and as such with charitable status) this feels wrong.  Some information may eventually appear, in the form of College accounts, but it is all too easy for institutions to disguise key figures in such documents.

 

 

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