London Dock Jade Wharf

Description

The London Borough of Tower Hamlets (the Council) has identified an opportunity to acquire 68 affordable housing units at Block G, Jade Wharf, London Dock, Wapping (the Site). The Site is currently owned by St George City Limited (SGCL) and St George PLC (SGPLC) are the contracting organisation in terms of the construction works. Both companies are subsidiaries of Berkeley Homes (BH). SGPLC is developing residential housing as part of the next phase of the Jade Wharf scheme (the Scheme). The planning permission and associated s106 agreement obtained for the Scheme requires SGCL to sell the affordable flats to be delivered, to a Registered Provider, which in this case would be the Council. As part of the Scheme, the Council has agreed to acquire 68 affordable units as set out below. When the construction of the units reaches "golden brick" stage (above foundation level - being the point at which the units are treated as a zero-rated supply for VAT purposes) the Council will purchase the long leasehold interest from SGCL (so the Council becomes the owner of the land on which the 68 affordable units are to be delivered). This is a lease within an apartment block. The Council will also, at the same time pay SGPLC the costs associated with the delivery of the works up to "golden brick". The Council will also enter into a Development Agreement with SGCL and SGPLC for the delivery of the 68 affordable housing units. The Development Agreement will place a legally enforceable obligation on SGCL and SGPLC to commence and deliver housing on the Site in accordance with agreed specification requirements as set out in the Development Agreement. The Council will pay for the costs of the works associated with delivering the affordable housing units in monthly instalments. The completed outputs will then be handed over to the Council's ownership on practical completion. The opportunity offered to the Council by SGCL and SGPLC comprises two linked transactions: (i) the purchase of the long leasehold interest and "golden brick" works that the 68 affordable housing units are to be delivered on by the Council from SGCL; and (ii) the award of a works contract (Development Agreement) by the Council to SGCL and SGPLC. The Council considers these to be inseparable components of the transaction which can only be delivered by both SGCL and SGPLC. For the reasons set out in this notice, the Council considers that only SGCL would be able to deliver the works because of exclusive rights (SGCL's current ownership of the Site) and that there are no reasonable alternatives to these works.

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