It feels like barely a day goes past without fresh news concerning a major London regeneration project.
Today we published details of CN’s tour of Canada Water, where British Land is moving forward with a £4bn investment to build nearly 5m sq ft of residential and commercial space.
Mere hours later, another major London masterplan was making headlines – albeit of a different nature.
Developer Capco revealed this morning that it is considering splitting its Earls Court masterplan development from its Covent Garden assets.
Under the proposals, the two assets would operate as separate businesses, with what Capco described as “distinct risk and reward profiles” for investors.
The distinction being that Covent Garden is a well-established asset generating strong returns, while Earls Court is basically still on the drawing board having come up against numerous obstacles.
Plans for the huge 31 ha redevelopment in west London were submitted in 2011, covering the old Earls Court exhibition centres, part of a Transport for London depot, and the West Kensington and Gibbs Green estates.
This would see 7,500 homes built along with new high streets, which was expected be worth a tasty £8bn when complete.
Plans were duly approved by Hammersmith and Fulham as well as Chelsea and Kensington borough councils, before being rubber-stamped by then mayor of London Boris Johnson in July 2013.
With approval granted, what could go wrong with this masterplan to build loads of homes in desirable west London? Turns out: quite a lot.
Residents on the site’s housing estates have fought a dogged campaign against the demolition of their homes, rejecting Capco’s plan to move them as part of the development.
On the other side of borough line in Kensington and Chelsea, another campaign slammed the loss of the exhibition space that for years had generated significant income for local businesses.
Political pressure increased in July 2014 when Hammersmith and Fulham council switched from Conservative to Labour control; the local authority is now calling on Capco to hand back the estates in return for the £75m it’s paid so far.
On top of this, the last two years have seen the London property market slowly cool.
The result has been the steady decline in value of the land, from £1.4bn in December 2015 to £989m two years later.
The Empress State Building, which sits next to the site of the old exhibition centres, has also been sold off, reducing the total site value to £759m.
So around seven years on from the masterplan being launched, there are a small number of new houses on a fraction of the site, no new businesses and one huge scar of land where the exhibition centres once stood.
Taking away business generated by the exhibition centres and planning to demolish estates without full local support suggest this masterplan only worked under certain cyclical conditions: ever-increasing house prices and land values; and political supporters remaining in power.
When these factors weakened, the plan no longer looked like a lucrative long-term regeneration that other stakeholders would want to fight for.
The fate of Earls Court remains to be seen, but lessons can be taken from its travails so far.
Pushing ahead on these complex, long-term masterplans without cross-party political support or buy-in from locals when times are good can store up problems, which can come back to bite when conditions change.