A cross-practice Bryan Cave Leighton Paisner (BCLP) team advised AGR Renewables (AGR) on an £86m project for the development, sale and construction of one of the world’s most advanced greenhouses, located in Cambridgeshire. While the project was an exciting world first for senior associate Lauren Bishop to work on, she jokes that one of the most memorable aspects of the project was the lack of sleep!
However, she adds, “the close relationship between AGR and BCLP that was established from the outset meant that deadlines were met without compromising on detail. It was also great to get to work so closely with a client that has a real passion for what they do and the ‘one team’ approach that was adopted throughout by both parties will definitely be something that I remember fondly from this deal”.
Bishop says the complexity of the deal was unique. With a footprint of more than 22 hectares, BCLP had to review and get to grips with all the title/development constraint matters impacting the site from the outset, before drafting any transaction documents.
“We also had to consider rights from the occupational tenant’s perspective, but also the conflicting freeholder’s concerns with such works being undertaken on their land. The complexity (within the tight timeframe) required us to efficiently review the title and to relay our findings to the client as/when we found them so that such findings could be factored into the client’s wider development considerations asap”, she recalls.
“For me personally, it has just strengthened my interest in development work – an area that I will definitely continue to work in as my career progresses. The deal has also highlighted to me the importance of working as part of ‘one team’ with your client. In my view, the days of the separation between lawyer and client are far behind us, and for deals to be successful in this current market, firms have to act as one team with their client, which is exactly what happened on this deal.”
The AGR Renewables deal
Whereas most greenhouses use gas-fired boilers to increase air temperature and accelerate plant growth, the AGR project will employ LED lighting to accelerate growth, while warming the structure using heat pumps situated in a nearby reservoir.
The use of waste heat from the nearby water reservoir enabled AGR Renewables to successfully apply for and secure Renewable Heat Incentive (RHI) support. There are very few comparable deals in the market, and it is anticipated that others will now look to replicate this structure and approach, in the UK and overseas, looking to reduce the carbon footprint of agricultural projects.
This project is underpinned by a government subsidy that few market participants have been able to access for these purposes. The RHI requirements enhance the commercial viability of the project but also placed it under technical and timetabling constraints that had to be overcome. Particular care and expertise was required to ensure that the RHI was secured and requirements met, while still allowing for asset optimisation to take place that required longer to develop. For example, BCLP built in a deferred consideration mechanism to allow for improved planning permission to be obtained and valued.
The design and construction is being carried out under an amended form of the International Federation of Consulting Engineers (FIDIC) silver book contract. The reservoir procurement is subject to the requirements of the Reservoirs Act 1975. Among other things, BCLP are advising on the interaction between the statutory duties of the undertaker and the contractual discharge of those duties, including the appointment of the construction engineer.
The project delivers agricultural produce using energy and water in a sustainable way that is uncommon and is commercially and financially structured in a way that can be replicated. Once in full production, the greenhouse will yield an average crop of 35 tonnes of cucumbers per day across the year and stable financial returns for the investors. It is a showcase for the financial and legal expertise in the City of London, which can help make agriculture more sustainable.
The BCLP team was led by partners Kiran Arora and Liana Hewson, with significant assistance from associate director Kenneth Addly; senior associates Simon Buchler, Bishop and Helen Wood; and associates Yousef Shakah, Rohin Ghosh Dastidar and Lauren Hunnisett.
About Lauren Bishop
Bishop, who describes herself as “born and bred” BCLP joined the firm as a trainee in March 2014, qualifying in March 2016. “I’ve been involved in a large number of acquisitions, disposals, developments and financings during my time at BCLP” she says, before going on to describe a few of the highlights.
“I worked as part of a team acting for a well-known real estate investment manager on the acquisition and forward funding of its first UK build-to-rent residential development in Nine Elms, southwest London. As the deal had to be agreed and signed in six weeks, both the developer and the funder really had to work together in a short space of time to not only get the commercials agreed, but to get the deal documented.”
Bishop was also part of the team advising an institutional investor on the corporate acquisition of a large building in Central London for £165m. “This deal was one of the first corporate acquisitions that I had worked on and was definitely a learning curve for all of the right reasons”, she recalls. “As the client intended to redevelop the property post acquisition, the deal really required me to get my developer’s hat on when reviewing title and to think about and consider all of the development constraint issues that may potentially hinder the development from the outset.”
She has also been on two secondments with The Crown Estate, and one as an asset manager, which she says “really taught me first-hand about the key commercial drivers for both tenants and landlords when entering into a lease arrangement. As lawyers, we tend to only get involved with deals once key commercials have been agreed, and sadly tend to miss out on the thinking behind those decisions, so interviewing tenants for units on Regent Street, negotiating heads of terms and even negotiating rent reviews for various units on Regent Street definitely gave me a fantastic insight into the commercial world of retail”.
Looking back on the AGR deal, Bishop says, “the thing I learned the most from this deal was my interest in the renewable energy sector. Before working on this deal, my contact with the energy sector was, I admit, somewhat limited. Not only was this deal a world first in sustainability, but it also involved our client applying for and securing RHI support, when few comparable deals in the market have been able to take this approach. As it is likely that others in the future will seek to adopt this innovative approach, it has been great (at such an early stage in my career) to have been a part of one of the first deals with this structure”.
Despite the exciting new sector, the project threw up major challenges for Bishop to get her head around. The main sticking point being all the third-party consents that were needed before undertaking the project. “Given the tight project timings, the parties had to work together in not only securing as many consents as they could upfront, but also negotiating reasonable and pragmatic transaction documents which allowed the parties to work together in good faith to procure any outstanding third-party consents after the completion of the deal”, Bishop says. “From a real estate perspective, the BCLP team had to constantly think of new and innovative ways of securing the consents post completion of the project, whilst keeping the funder happy that such consents would be obtained – a true balancing act.”
There were also a range of challenges thrown up by the constraints of the pandemic, as Bishop highlights, “we would usually have several face-to-face meetings with a client to talk them through our development constraint findings and to allow the client to ask any questions as/when they think of them”. This, of course, was not possible but Bishop says the reduced commute time was certainly a benefit. “Given the tight deal timings, it was key that both BCLP and AGR were utilising time efficiently and the lack of commute time each day definitely allowed us to do this and to get the deal done”, she says.
To make up for the lack of face-to-face meetings, BCLP arranged a set meeting in the diary with AGR each day to address anything from client questions to deal logistics. “We also utilised video calls every time we spoke to ensure that the face to face meeting environment was maintained as far as possible”, Bishop explains. “When working on deals in the future, I will definitely ensure that video calls (as opposed to just telephone calls) are utilised, as a video call still allows you to build rapport with your client even when working remotely. A memorable moment on the deal has to be when I video called the partner acting for the grower to discuss amendments to our reporting, only to be told that he had to quickly turn off his camera whilst he removed his son from the room who was currently hiding under his desk – a working from home moment that we would just not see in the office!”
About Lauren Bishop
2021-present, Senior associate, Bryan Cave Leighton Paisner
2016-21: Associate, Bryan Cave Leighton Paisner
2014-16: Trainee solicitor, Berwin Leighton Paisner
Who’s Who: the BCLP team
Lead partners: Kiran Arora and Liana Hewson
Assisted by: associate director Kenneth Addly; senior associates Simon Buchler, Lauren Bishop and Helen Wood; and associates Yousef Shakah, Rohin Ghosh Dastidar and Lauren Hunnisett.