The regeneration game
26 July 2004
12 July 2013
13 January 2014
7 May 2013
8 November 2013
24 September 2013
Regeneration offers huge opportunities for real estate lawyers, but it also delivers a serious challenge to those of us schooled on traditional property development schemes – speculative ventures involving one fund and one developer and, hopefully, at least one tenant, with the local authority sidelined into giving planning permission. Those of us now looking to command a role in taking forward the Government’s so-called renaissance agenda must become the renaissance men and women of the regeneration age. We must acquire and develop new skills and be able to thrive in new disciplines and we must prove our adaptability to new types of clients.
The legislative structure that governs key elements of regeneration work, planning and compulsory purchase, is being restructured to encourage and to deliver regeneration. No longer is it enough for us to have a mere nodding acquaintance with planning gain principles and to know a General Vesting Declaration (GVD) is not an advanced version of a DVD. As the different parts of the Planning and Compulsory Purchase Act 2004 come into force over the next year, we must show that we understand fully not only the substantial differences of the new law, but also the issues driving planning policy.
It must be noted that revisions to Planning Policy Guidance Note 3 and Circular 6/98 are in prospect with the intention that affordable housing is not just planned, but also delivered, no doubt with the recommendations of the Barker report in mind.
Regeneration is regularly procured on public-private partnership (PPP) lines, giving those who have been involved in commercial PFIs or PPP projects something of a head start, for example the private sector investment in the London Greenwich Peninsula project totals £4bn. We must be able to demonstrate that we can take a key role in regeneration projects that will involve huge numbers of different parties and stakeholders. A single client might well be a joint venture involving both public bodies and private businesses and that client might be a limited partnership or other investment vehicle with some partners’ contributions being part of the site being regenerated. It all makes for very demanding negotiations.
Berkeley Homes has created a partnership vehicle specifically to link up with regional development agencies and other players in the regeneration industry, with a view to unlocking the potential of some major urban sites and to exploiting the market for affordable housing and key worker housing. Many regeneration projects will interest the media and, in those cases, we will have to be able to thrive in an atmosphere that is under the media spotlight and that may well be very new to us.
Competent real estate lawyers already work well with other disciplines. In the case of our dealings with construction professionals, both sides are usually pretty clear as to who should do what. Regeneration projects involve a new type of professional – the master planner.
There is a premier league of visionary master planners who can claim to have revitalised cities around the world and can look forward to being involved in the biggest regeneration projects. In addition, many architectural practices are seeking to establish a competitive edge by bringing master planners in-house. Sometimes, master planners are given briefs almost as wide as those given for post-war reconstruction – they not only have to be able to formulate a bold vision of the future of a city, but also must understand the various policy issues and, of course, be able to deliver that vision to the satisfaction of all the stakeholders. Whether we are talking about international superstars or architects wanting to look at the really big picture rather than the drainage details, we need to be able to establish effective working relationships with them.
Regeneration will invariably involve development on brownfield land as major greenfield planning permissions are becoming an endangered species. We might have colleagues who specialise in environmental law and the mark of a professional in any discipline is to know when to take rather than give advice. But, if we are to win, retain and develop a key role in regeneration, we must be able to convince our new clients that we will not melt away in negotiations at the first mention of “contaminated land” and that we can deliver creative solutions to environmental issues.
Regeneration might mostly be funded privately, but it is inspired and controlled by government, in its widest sense. Those real estate lawyers who last considered administrative law at law school and who can just about bluff their way through explaining judicial review to a small-time developer will not stay in the regeneration industry for long. We must fully comprehend the obligations that the plethora of public bodies involved in regeneration face. Understanding the different functions of the various publicly-funded bodies involved in regeneration would be a start.
Some of us have perhaps become hyper-specialised. We only do, say, developments for the retail sector. But regeneration is radically different from old-style redevelopment in that it is effected for the benefit of the public at large and everyone involved in it must be able to respond to the public’s complex demands and the Government’s attempts to interpret those demands. Regeneration involves property of all types from the cradle to the grave – or in regeneration terms, from the obstetric facilities provided and run on PPP principles via the light transport system, to the multi-faith garden of remembrance. And critically, it involves somewhere for people to live in the meantime.
We keep coming back to homes – the keystone in regeneration. The housing supply is a key socio-economic driver that might even delay the UK’s entry into the eurozone and the Barker report pointed up its capability to polarise society. Real estate lawyers, even those whose memories of ‘ressie’ work have become hazy, should be ready to embrace housing issues. Affordable homes are being planned with a view to being delivered and there is no way that social housing issues can be ignored – these have loomed even larger since Housing Corporation chief executive Jon Rouse has required registered social landlords to consider refugees and the homeless. But that is not all.
Commonhold might not interest large numbers of commercial occupiers anxious to move property requirements off balance sheet, although it looks like it may well interest the public, so there is yet another topic to be understood.
It is clear that a real estate lawyer seeking to penetrate the regeneration market must raise the level of their game significantly.
But the acquisition of new skills does not mean that traditional skills can be left behind. It will be clear that there is much more to regeneration than what we once called conveyancing, although technical excellence in land law is essential to the aspiring regeneration lawyer. Imagine that the master planner’s ideas infringe a restrictive covenant and one of the neighbourhood’s awkward squad claims the benefit of that covenant. No one else is going to step up for that one – it is our call.
David Taylor is group head of DLA’s real estate group