A disagreement over rights of light is threatening to hold up a major office redevelopment in the City of London. And the corporation’s planning committee is threatening to use an enforcement move, should the two warring parties be unable to settle.
However, some suggest that the City’s threat to use planning powers if necessary is starting to look a little hollow, relying as it does on the need to act to the clear public benefit. And the squabble comes as reforms to existing rights to light laws await their turn through the statute turnstile.
The dispute has arisen over the redevelopment of 120 Moorgate, which would see a Seifert designed block dating from the 1970s replaced by a new, larger 200,000 sq ft office and retail development designed by Lifschutz Davidson Sandilands for site owner Redevco. The landlord of the adjacent Britannic House, or 1 Finsbury Circus, since 2013 is a company named China Overseas Land & Investment, which has complained the redevelopment will diminish light to the rear of its property.
At February’s City meeting, the two parties were given one last chance to negotiate their way to a resolution. Committee members decided to delay legal steps to resolve the dispute, despite a recommendation to head that way from chief planner Annie Hampson, who noted: “In the light of the negotiation history it is considered highly unlikely agreement would be reached with the owner of 1 Finsbury Circus, to allow the owners to achieve delivery by 2019.”
The legal move is one last threatened in 2014, when a similar dispute was threatening to hold up the start of the Goldman Sachs office development in Farringdon. It sees the local authority buy in the site, or “assemble” it, in which case rights to light compensation claims fall; the site is then sold back to the original developer. On that occasion, the threat was stayed, and a final effort to negotiate a deal was agreed.
The redevelopment was originally approved by City planning committee in 2011, though the actual construction project was complicated by the need to agree rights to light issues with neighbours, and agree terms with existing ground floor retail tenant Barclays.
City planning committee members heard that Redevco has been trying to negotiate a solution since 2013, without success. The company has even produced a revised design for the redevelopment, with some additional upper floor cutbacks, but even this has not proved acceptable to the neighbouring landlord.
James Souter, partner at Charles Russell Speechlys, said it was “no surprise” the committee had held back: “Local authorities are able to acquire land for developments that are deemed to be in the public interest. The public benefit of 120 Moorgate is not overwhelmingly convincing, especially compared to Goldman Sachs’ Farringdon office. Local authorities are still nervous of using these powers.”
The Law Commission took a good look at the whole rights of light issue and delivered a report in 2014, which is expected to make it ultimately into revisions of the existing laws. Their widelyt welcomed report recommended simplifying and reducing the ways a neighbour could obtain rights to light; and setting a timescale on the right to seek an injunction against a development. It also suggested stopping rights of light from being acquired, and ensuring they could only be acted on, if actually used. Finally, it proposed a test to help the courts determine damages, in order to help developments proceed.
LPA Perspective: This case illustrates why the reforms already worked out by the Law Commission need to be enacted into law, as soon as possible. The outdated, highly unsatisfactory current laws continue to act as a brake on new development, allowing neighbours to hold out for substantial sums of money in return for removing their objection to an adjacent redevelopment.
Over recent years, there has been a shift away from the concept of obtaining damages for loss of light, to a more greedy method of claiming a tithe of a percentage of redevelopment profits. This shift was particularly evident in purely commercial areas such as the West End but most notably in the City of London.
As the capital densifies, inevitably commercial redevelopments head higher, and where possible wider, than the buildings they replace. This of course means conflicts over access to daylight and sunlight; and usually also involves the wheeling out of the clunky BRE guidelines, the inadequate way of assessing impacts which is still the only tool that seems to be available.
Hence the legal workaround which, anecdotally, was worked out by corporation officials and leading developers in a huddle at the MIPIM property event in Cannes; clearly a very effective use of their time, that year. Its threat has focused minds on several City sites over the last few years.
In this instance, once again it would appear to be the desire for a substantial payment has been holding up negotiations. With the City office market booming once more, the ever pragmatic planners in the Square Mile are keen to ensure any ready-to-go office projects, with willing and able developers, get off the mark promptly.