Developer stands to make £22m profit out of £3.5m Hornsey Town Hall purchase
- Credit: Archant
The developers who have bought Hornsey Town Hall are set to make a £22million profit from the deal, shock figures have revealed.
Far East Consortium (FEC) were sold the Grade II*-listed building for £3.5m by Haringey Council.
Members of the community had opposed the sale hoping to see the former council headquarters turned into an arts venue.
But in July FEC applied for planning permission to restore the space and include a hotel, arts centre and 146 flats on the site.
In a economic viability study into the scheme, as part of the planning application, estimated profits were calculated.
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Although originally blacked out, the figures have now been revealed and forecast FEC making a £22,600,634 profit out of the deal.
The report, from ULL forecasts, say the value of the new seven-storey block, with 146 residential properties, would be £94,240,800 with 40 parking spaces adding £800,000.
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From this, £300,000 would be earmarked to compensate surrounding properties for any resulting loss of light.
The report says that affordable housing would not be viable on the site.
Crouch End resident Adrian Essex said: “The developer has almost certainly understated the profit to demonstrate how borderline the viability is in order to reduce other commitments such as the proportion of affordable housing.
“Councillors have been presenting this as a very good deal because we get investment, community use and restoration. Now we know the numbers, we can see it’s a bad deal. The council profits from a paltry £3.5 million. This building should remain in public ownership,” he said.
A Haringey spokeswoman said the council has the option to challenge the assessment “if it is deemed necessary” and the sale price accounts for the “very high level” of investment needed to stop the Town Hall falling into further disrepair, carry out restoration work and maintain the building.
She added: “We’ve been clear for many years that our ambition is to see this iconic landmark restored and secured for future generations to enjoy through a scheme that respects the building’s cultural heritage, offers community access to its important historical spaces and unlocks its potential as an arts venue.”
She also said 17-20 per cent profit is seen as an industry standard.
Head of UK Development at FEC John Connolly said: “The report submitted alongside our planning application is an independent assessment of the viability of the proposed development. It calculates the level of obligations that can be provided to Haringey Council whilst sustaining an appropriate land value and profit which reflects the risks of delivering the project.
“It is based on a thorough analysis of the development economics of the proposed scheme as a whole and includes a subsidy of over £390,000 per annum for the arts and community offer to ensure it is able to thrive.
“The cost of restoring the Town Hall, Broadway Annexe and the improvements to the public realm comes in at nearly £29m. We will be sharing a cost plan linked specifically to the restoration shortly. The report forms the basis of our discussions with Haringey Council as part of the planning process and these will continue up to the determination of the planning application.
“Our proposals are deliverable and will secure the future of the Town Hall by generating more usable spaces with a better public offer,” he added.
Hornsey and Wood Green MP Catherine West said: “Haringey has a desperate housing shortage. House prices in the area have risen significantly since the original planing application for the site was agreed.
“It is now simply becoming too difficult for many families to get on the housing ladder. Given the scheme is on public land I still maintain that there should be a minimum of 50pc genuinely affordable housing,” she added.