Harbouring doubts

Following a bitter 20-year dispute, redevelopment of the controversial Lots Road power station site in Chelsea has finally been given the go-ahead. But its opponents are not going down without a fight, says Douglas Evans

Circadian, a subsidiary of Hutchison Whampoa, is continuing its fight in the courts to uphold the validity of the Secretary of State’s January 2006 grant of planning permission for a major redevelopment of the Lots Road power station site and the remainder of Chelsea Harbour.

This extraordinary saga, which began with the 1986 grant to P&O Property Holdings of permission within Hammersmith and Fulham (H&F), remains unfinished business. The final phase of Chelsea Harbour was not built and, following the decommissioning of the Lots Road power station within Kensington and Chelsea (K&C), the unified site, including Chelsea Creek, remains the subject of bitter battles.

Opposition ranges from those who prefer low-rise replication to those who do not wish tall buildings to be built either in that borough or within H&F. Meanwhile, Lady Berkeley’s River Thames Society is concerned with the protection of the Thames.

The H&F proposal is for a 37-storey building, and five others, providing 382 flats. In K&C, the power station is proposed for conversion to residential, business and related uses, with a 25-storey tower and two other buildings providing 420 flats. Of the total 802 flats on the five-hectare site, 47 per cent will be ‘affordable’. Securing planning permission for a major regeneration project in a highly populated area of London, with able opposition, is never going to be quick. However, the Lots Road scheme has a more complex history than most.

The background

Way back in 1986 permission was granted for Chelsea Harbour. Phase two, comprising 173 flats, without affordable housing, remains to be built. This scheme is the ‘fallback’.

In 1998, 13 years after permission was granted, K&C resolved that a tall building may be appropriate on Lots Road. In 1999, K&C’s brief contemplated the demolition of the power station, while H&F had designated the Sands End Conservation Area, which was then extended to include part of the Chelsea Harbour site.

In 2001 the Department of Culture, Media & Sport rejected English Heritage’s recommendation to list the power station, and between 2000 and 2002 various schemes were submitted to H&F and K&C. At one time the 37-storey tower was proposed in K&C, with a 25-storey tower in H&F. Projects were altered many times to secure agreement from officers. Amended and new applications also required major revisions to the environment statement.

The K&C unitary development plan (UDP) allocated residential development in 2002, and by 2003 the H&F UDP confirmed the old allocation with recognition that the 1986 permission could still be built out.

In 2003, while responding to the planning appeal concerning the updating of external details, the inspector confirmed that the 1986 permission could still lawfully be built; the H&F officers supported the redevelopment, and members resolved to grant permission; the K&C officers recommended the grant of permission, only for the members to refuse on the grounds of the 25-storey tower’s impact.

Since the H&F element could not be built independently, an appeal against K&C’s refusals was submitted in 2004. Consequent upon the appeal, the Secretary of State agreed to call in the H&F application. In 2004, the London plan formed part of the development plan.

The public inquiry took place in February and April 2005. H&F, surprisingly, appeared without any views either way, merely to ‘assist’ the Secretary of State. Complex Section 106 obligations were completed and a management deed was entered into with English Heritage to protect historic parts of the power station.

In post-inquiry correspondence, further amendments to the environmental statement were made, consequent upon amendment of the form and content of the proposals.

Following the application to H&F for the approval of further details under the 1986 Chelsea Harbour permission, H&F decided it could not now be built out, despite H&F’s UDP statement and the 2003 appeal. The application was appealed, but due to the legal challenge to the permission, this is in abeyance.

Early this year the Secretary of State granted full planning permission, contrary to the recommendation of the inspector, for the 37-storey tower in H&F. The River Thames Society launched a challenge alleging that the interests of the river had not been fully considered. Additionally, the society claimed that insufficient weight had been given to the London plan over the previous UDPs.

The River Thames Society subsequently decided that it did not wish to expose members’ funds to a High Court action and so instructed its solicitor to withdraw. The challenge was not withdrawn, and Lady Berkeley asked to be substituted, beyond the six-week challenge period. She also asked for a protective costs order.

The High Court agreed that Lady Berkeley could be substituted as the challenger because she was not a “stranger” to the society it was “reasonable to assume” that if the society had not issued a claim, Lady Berkeley would have. The protective costs order was refused, since these orders should only be granted in exceptional circumstances of public interest.

For commercial reasons, the substitution decision was not appealed by Circadian, on the basis that an appeal would only result in further protracted court action without settling the validity of the planning permission.

In what will hopefully be the final throw of the dice, the substantive court hearing is scheduled for early 2007, and the Secretary of State and Circadian remain determined to win.

Lessons to be learnt

Planning is a political system within a legal and policy framework. In K&C’s case, a scheme went forward that was not palatable politically, notwithstanding meeting all the officers’ requirements.

For Circadian, pleasing the members would not create the optimum development for the site, nor appropriate returns. Recognising political undeliverability would have shortened the timescale by a number of years, and while a major public inquiry would have been inevitable, the current challenges would have been dealt with and onsite progress evident.

With any large scheme the planning gain ‘goalposts’ move constantly. Identifying the limits of affordable gain and sticking to them is the ideal. However, it is a brave client who says no to planning gain that will result in losing the support of such bodies as Transport for London.

One clear lesson is that, while negotiations may result in substantial changes to a development, the implications are neither simple nor cheap. The Lots Road proposals changed many times, for good reason, both pre and post-appeal/call-in. The time, as well as the costs involved in these exercises, is not to be taken lightly.

The final lesson is that, in England – and London in particular – it is necessary when promoting complex schemes to factor in to all financial appraisals the time it can take to achieve an unimpeachable viable permission. While many of us will take this as read, we need to recognise that many investors are foreign-based, as is Hutchison Whampoa.

Douglas Evans is head of planning at Addleshaw Goddard