Harringay, Haringey - So Good they Spelt it Twice!
Lendlease Threatens Haringey with £5M ‘Loss of Profits’ Claim over Axing of HDV
Inside Housing is reporting today that Lendlease threatened Haringey Council with a multimillion pound lawsuit for loss of profit from their controversial development vehicle, ahead of a vote to scrap it last week.
The day before the council meeting in which the HDV was formally dropped by Haringey, Dan Labbad, chief executive officer for international operations and Europe at Lendlease, wrote to Joseph Ejiofor, council leader, and Zina Etheridge, chief executive.
In the letter he warned: “If the council proceeds to seek to abandon HDV, that will expose the council to a significant loss of profits claim as well as a restitutionary claim for Lendlease’s costs, and a claim for the value that Lendlease has contributed to the council.”
Cabinet papers last week revealed the council’s belief that it had to pay another £500,000 to cover Lendlease’s costs, in addition to the £2.5m already spent on setting up the HDV.
Mr Labbad, however, wrote that Lendlease’s costs to date are £5m. He did not give any estimate for the amount of profit the company believes it would have made.
Originally, the council predicted that the land transferred into the vehicle – to be jointly owned between it and Lendlease – would eventually be worth £4bn after development.
Tags for Forum Posts: haringey development vehicle, hdv
Replies to This Discussion
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Permalink Reply by Roger on
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... she can afford it...
..."Pinnacle Group, a housing and regeneration management firm, today announced Ms Kober’s appointment as its director of housing.
The company was also one of three shortlisted bidders for the HDV, on a joint ticket with Starwood Capital and Catalyst.
Her responsibilities will include “enhancement of the customer experience within existing contracts, new housing operating models, on-going development of Pinnacle’s [private rented sector] offer, and refinement of Pinnacle’s leasehold block management services”, Pinnacle Group said in a press release."...
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Permalink Reply by John McMullan on
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And people wonder why we were so suspicious of the deal. Just shows how one sided it always was.
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Permalink Reply by kotkas on
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It’s a contract with an exit clause. Most well written ones have one and it’s usually proportionate to certain termination conditions etc. This issue is microscopic in relation to the burning issue of will come to replace the HDV other than platituses.
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Permalink Reply by Diamond Lights on
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What disappointed me most was that having rightly concluded the risk was too great to proceed with the original the new council gleefully binned the whole thing off rather than engaging with Lendlease to salvage selected bits and a working relationship. The result is this entitely predictable legal wrangle and the magic self financing wholly owned company in lieu of a housing plan.
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Why are you surprised? The opposition to the scheme, and its subsequent scrapping was a purely political move.
The elected cabinet would rather pass on £5m of exit penalties to the people of the borough than risk their political reputation by renegotiating/re-scoping the deal.
The irony of it all is that it's the very individuals they profess to protect who will bear the brunt of the burden - those who rely on the council for basic services and the upkeep of council property.
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Actually, it was 100% political. The opposition and the ceremonial scrapping of the scheme.
It's pretty widely reported that as the Anti-HDV sentiment built up, it basically became political kryptonite. Councilors of all colours and persuasions were going to enormous lengths to claim their opposition to the scheme. That was the defining issue of the local election, and what got the current cabinet in place.
As for the anti-HDV's word of the year - demolition. The reality is that wherever the council chooses to build next, they will have to knock something down. People will be relocated. That's the uncomfortable truth. The flipside is that something will be built - but who cares - people are ruled by loss aversion and that's what got the anti HDV campaign so much traction.
'Demolition' is not unique to the HDV, and if you genuinely want more homes, in commutable, inhabitable locations - then you shouldn't have an issue with it.
You are right on one topic. Yes, the individuals whose homes were to be rebuilt, now have roofs over their heads. These roofs, however are at risk of collapsing on them - as is the case with Broadwater estate - and the uncertainty is much greater now.
But the council 'pledged' to build 1000s of homes! If they had a true sense of civic responsibility, pragmatism and common sense they would have renegotiated/rescoped the contract to more favourable terms all around, instead of replacing it with vague 'pledges' and awkward silence on what's next for housing.
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