Olympic village is torch bearer for East London regeneration dream
1 June 2009 | By Luke McLeod-Roberts
Law firms will play a pivotal role in delivering Olympic village success.
News that the £1.1bn Olympic village would be fully nationalised after private sector interest in the scheme dried up has been largely overlooked, with the furore over MPs’ expenses continuing to take up most of the headlines.
But the fact that £324m of public money was recently injected into the 2012 Olympic village should not have come as a big surprise, according to Slaughter and May corporate partner James Featherby, who is adviser to lead developer Lend Lease.
“The village was a certainty ever since the Government committed to doing the project,” he comments. “It was always going to happen, regardless of who was providing the financing. All that happened was that the Government decided that the private financing wasn’t attractive enough.”
Featherby was first appointed, alongside commercial real estate partner Dermot Rice and project finance partner Steven Edwards, in 2006, when Australian company Lend Lease put in a bid to become the project’s principal developer.
The firm did not have a pre-existing relationship with the company, which Featherby says was looking for a broad range of expertise covering the development aspects and the corporate angle.
Slaughters also advises Lend Lease’s UK subsidiary Bovis Lend Lease, which has been charged with the project management aspects of the £1bn village, but which, controversially, is likely to be usurped by other companies on the construction aspects.
The building of the village is currently up for grabs, with Ardmore Construction, Galliford Try and Wates having put in bids.
But while media reports have focused on the growing pressures on the taxpayer to cough up ever-increasing financing for the 2012 Olympics, there is one conspicuous major private sector investor also making a contribution. Westfield will be launching a £1.5bn shopping centre in the expanded Stratford City station, to open in 2011. Ashurst real estate partner Hugh Lumby is extremely upbeat about his client’s project, for which his team is advising on agreements with the Olympic Delivery Authority (ODA), the London Development Agency (LDA), London & Continental Railways (LCR) and the London Underground.
“It takes a company with a terribly good balance sheet [to pull this off],” he says. “West London Westfield shopping centre has been successful - it’s a whole lifestyle experience. This is going to be in East London so it’ll be a more eclectic mix to reflect the situation. Bringing a massive beacon centre to an area that’s not the nicest will drive regeneration.”
Very diplomatically put, but the jury is still out on whether shops can save poor areas. Although given that those wanting to get to the Olympic site will have to pass through the shopping centre, sales should be all but guaranteed.
Nabarro real estate partner Rob Raimes advised Westfield on pre-let agreements with anchor tenants John Lewis and Marks & Spencer, which were respectively advised by Michael Stancombe at Lovells and the M&S in-house team, while Denton Wilde Sapte partner and head of retail Chris Denny is advising on occupational leases. Ashurst will be advising on putting in the infrastructure across the whole site, including bridges and roads, jointly procuring facilities with the ODA.
Just as important, in terms of the long-term regeneration, will be the purchase of a proportion of the Olympic village housing stock post-2012 by registered social landlords First Base and East Thames, which will make flats available on an affordable housing basis.
To get the project completed in the next three years, the ODA has put in place a five-firm panel made up of Berwin Leighton Paisner, Clifford Chance, DLA Piper, Freshfields Bruckhaus Deringer and Pinsent Masons. To date a lot of the work they have done has been on the planning and environment side of things, on which Pinsents has taken a key role, with a relationship with the ODA’s head of development control Viv Ramsey stemming back to 2004. It also has a role advising promoters, although Pinsents partner Richard Ford will not mention any names.
But then again, Denton Wilde Sapte corporate partner Richard Barham, who advised on establishing both the bid company and the operating company for the Games, still counts its work in the incipient project as one of its achievements.
In fact, recently it pitched for work elsewhere on that basis, but was disappointed to learn that every one of the 18 firms vying for the job claimed to have a key role on the Olympics.
2012: who’s got what?
Firm: Slaughter and May
Who: Corporate partner James Featherby, commercial real estate partner Dermot Rice, project finance partner Steven Edwards
Client: Lend Lease
What: £1bn development of Olympic village
Firm: In-house advice
Who: Paul McNicholas
Client: Bam Construct
What: £35m construction of Chobham Academy school
Firm: Herbert Smith
Who: Real estate partner James Barnes
Client: London & Continental Railways
What: £4bn development of Stratford City
Firm: Pinsent Masons
Who: Richard Ford
Client: Olympic Delivery Authority (ODA)
What: Planning and environment
Firm: Freshfields Bruckhaus Deringer
Who: London managing partner Tim Jones and rail and social infrastrcture co-head Sally Roe
Client: ODA and London Organising Committee of the Olympic and Paralympic Games (Locog)
What: Commercial, construction, IP, planning, procurement
Who: Real estate partner Hugh Lumby, with real estate partners Anthony Burnett-Scott and Jamie Chapman, construction partners Marc Hanson and Alex Cunliffe, infrastructure partner Jan Sanders
What: £1.5bn Stratford City shopping centre development
Firm: Denton Wilde Sapte
Who: Corporate partner Richard Barham
Client: Department for Culture, Media and Sport
What: London’s successful bid for the 2012 Olympics. Advised on the establishment of both the bid company and the operating company for the Games, Locog
Firm: Berwin Leighton Paisner
Who: Projects partner Tessa Kimber
What: Legacy projects
Firm: Clifford Chance
Who: Construction partner Tim Steadman
What: Negotiations with Team McAlpine
Firm: DLA Piper
Who: Projects partner Peter Rout
What: Procurement and negotiation of aquatics centre, security and logistics