The City of London Corporation is on course to earn £220million from negotiations with companies behind some of the Capital’s biggest property developments.
The City of London Corporation is on course to earn £220million from negotiations with companies behind some of the Capital’s biggest developments. For the Corporation this was the total amount owed from 156 planning applications it approved between April 2016 and the end of March 2019.
In 2014, the Corporation approved plans by CPC and Barratt Homes to turn office blocks in Sugar Quay into 165 luxury apartments. In return for planning permission, the developers owe over £15.4m. Over £19m will be paid by the developers of 22 Bishopsgate, set to become the tallest building in the Square Mile, at 62-storeys high.
Work started earlier this year on Wilkinson Eyre’s 51-storey office block, 8 Bishopsgate, which netted £6.1m for the
Corporation. The incredible sums were revealed in a report discussed by the Corporation’s planning and transport committee on 22 October.
In each planning permission, the money was received using the legal powers of a Section 106 agreement.
This piece of regulation allows councils to negotiate money from developers in lieu of any negative affects a development can cause on its surroundings, during and after construction. Section 106 money is commonly spent by councils on projects such as apprenticeships and skills training for local people, street improvements, or new community facilities.
Councils often use them to make developers provide discounted “affordable” housing in residential developments. The amount of money a developer pays will vary with the size of the development and be paid at different “trigger” stages as construction progresses.
The report said 123 Section 106 agreements, with a value of £199m, have been fully “signed and triggered.” And £173m of this money has so far been received by the Corporation to be allocated to local improvements.
A further £21m is in the pipeline, and due when the developments pass the trigger stage of construction. Another large-scale development noted in the report, Creechurch Place, is due to earn the Corporation a further £5.2m. The 17-storey development by Helical Bar, was worth £95m. Prior to the 2016-2019 period, the Corporation made about £4m from the 38-storey Walkie Talkie in Fenchurch Street. The Corporation’s report did not provide data following April 2019.
Lead Image from City of London Corporation