Argent St George sticks with Lovells for £1bn job

Lovells has advised leading UK developers Argent and St George on an innovative contract which marks a turning point in the £1bn regeneration scheme for King’s Cross.
Argent St George, a joint venture between the two developers, has entered into an acquisition and development agreement with London & Continental Railways (LCR) and Exel over the 50-acre site, which is north of King’s Cross mainline station.
LCR, advised by Herbert Smith, is responsible for the high-speed Channel Tunnel link into St Pancras, which lies next to the site. Exel, advised by longstanding adviser Lincoln’s Inn firm Kingsford Stacey Blackwell, owns a substantial part of the land around Regent’s Canal, including industrial buildings and a goods yard.
LCR and Exel own the bulk of the land that will become available for development after the new Channel link is completed.
Argent St George put in a bid for the acquisition and development agreement two years ago and was named as the preferred bidder early in 2000.
Lovells partner Andrew Sanders said that the latest legal agreement between Argent St George, LCR and Exel is unusual and exciting. “It establishes a joint venture between the developers and landowners and encourages all parties to look to the long term as owners and investors,” he said. “Specifically, the agreement will enable us to jointly establish a collective ownership structure for the development as it progresses.”
The land will be valued following the approval of planning permission and the completion of the rail link. The deal is unusual because, at this point, Argent St George will have the option to acquire the land. The landowners can sell the land or enter into a 50-50 partnership with the developer. But the higher the value of the site, the greater the price discount, which means that Argent St George will be rewarded accordingly for its ability to develop the land.
Sanders said: “The structure is quite unusual, both in the way the price is determined by reference to the success of the developer and in the way it retains the right for the landowners to either sell the property or to enter into a limited partnership with the developers.
“It benefits both parties. The developers want to be rewarded for their skill in developing the land and the landowners don’t want to have to agree to sell the land five years before the completion of the rail link.”
Sanders has been instructed by Argent for more than 10 years and brought the developer with him as a client when he moved to Lovells from DJ Freeman in 1999. Lovells planning head Michael Gallimore subsequently won the role of Argent St George’s planning adviser on the scheme following a beauty parade.
When the joint venture was originally set up, Argent was advised by DJ Freeman and St George by Ashurst Morris Crisp, but neither firm is now involved in the scheme.
The Herbert Smith team was led by real estate partner Christopher Harrison, while partners Christopher Boyce and Robert Neville are leading at Kingsford Stacey.
CMS Cameron McKenna property managing partner Nick Brown is acting for the Secretary of State for Transport, Local Government and the Regions.