Mainstream media on Battersea Power Station’s financial and social unsustainability

Battersea Power Station, since the end of 2014, has been standing wounded with only three chimneys left, and we have not yet seen any sign that the Battersea Power Station Development Company is starting the rebuilding work on the SW chimney.

View from Battersea Park Station, taken by Spectacle on 23/02/2015

Battersea Power Station from Battersea Park Station. Image taken by Spectacle on 23/02/2015

Meanwhile, some of our worries about the social impact and the financial viability of the whole project have been shared by a number of different analysts.

For instance, our concerns about the financial viability of Big Bang Development grow stronger as main-stream financial newspapers, such as Bloomberg, have highlighted that after the positive performances of recent years, London’s house prices have now started going down.  Bloomberg states, in a recent article, that “prices in emerging prime London fell 2 percent in the final quarter of 2014, according to Douglas & Gordon” and that “the area, which includes the Nine Elms neighborhood, was the worst performer in “emerging prime” London last year, broker Douglas & Gordon Ltd. said”. “Overseas demand for prime London homes is cooling, and some upscale projects being marketed “have gone over to Asia and probably haven’t done as well as they would have” in early 2014” quoting Jack Simmons, head of U.K. residential development and investment at broker Cushman & Wakefield Inc.

This alarming report, suggesting that the degrading value of houses might scare investors and threaten the financial plan of big projects such as the one by Battersea Power Station Development Company, was corroborated in an article by The Telegraph. The Telegraph reports that properties in the Nine Elms area are already flipped, thrown on the market to make some gains, before even a single brick of the flats has been put in place. This circumstance seem to confirm our impressions, sharing with The Telegraph’s journalist the “concern that homes built in the early phase of the huge project, were mainly reserved by investors – who have waited for the market to pick up before “flipping” them – and overseas buyers”. Instead of sounding an alarm in the heads of Battersea Power Station Development Company, the same article tells us that a spokeswoman for the company said: “We launched phase one at Battersea Power Station over two years ago and we are pleased to see that the early pioneer purchasers, who helped to get this project off the ground have experienced good levels of growth”.

If fluctuations of the property market could turn investors away, the new strength of British Sterling on the foreign exchange market could cause even more troubles to South Asian Buyers. The Star, one of the most popular Malaysian news sites, published a page explaining how to deal with loans in foreign currencies to prevent investments, such as a flat in Battersea Power Station, turning disastrous by weaker local currencies.

Rahim & Co consultant, marketing (London properties), Guy Major says “It is ‘dangerous’ to have a mismatch between your ability to pay based in ringgit and a pound-denominated loan,” he says.

If our concerns about the finances of the project are aimed at putting question marks over the narrative used by big bang developers to sell their projects, other media apparently started sharing our worries about the social impact of this monster development. The Guardian came out recently with a long and quite critical article about Battersea Power Station, “the biggest building site in London, and one of the largest regeneration projects in Europe”. Significantly titling the article “Battersea is part of a huge building project – but not for Londoners”, the Guardian highlights the tendency of new developments in London to get higher – “Hong Kongification” as Tony Travers, director of the Greater London group at the London School of Economics, puts it.

The Guardian quotes Ravi Govindia, the Conservative leader of Wandsworth council  “Yes, some of the buildings will be tall, but there will be a distinctly London flavour. It’s going to be a place that people [will] enjoy living in.” Govindia says, adding that the project “will bring 25,000 permanent jobs plus 20,000 construction and engineering jobs during the building phase”), the article warns that building luxury flats for wealthy foreign buyers is exacerbating the housing problem for thousands of Londoners in need of homes.

On the other hand, Will Martindale, Labour MP candidate for Battersea, in a blog posted on The Huffington Post, shared his concerns (and some of his neighbor’s) about the way Battersea is changing: property prizes going well beyond local people’s budgets, riverfront views are blocked by multi-story buildings and very few new flats will eventually house locals while oversea investors and developers will make a fortune. As Will Martindale says “This is our riverfront. It’s part of our shared heritage, not simply a strip of real estate. We would do well to remember Battersea Council’s old motto: Not for you, not for me, but for us.”

At the moment, our impression is that it’s becoming ever more theirs…

 

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Battersea Power Station Chimneys demolition- History repeating

URGENT NEWS ON BATTERSEA POWER STATION CHIMNEY DEMOLITION

Thursday 12th June representatives of the BPSCG (Battersea Power Station Community Group) met with Paul Landsberg of Wandsworth Borough Council Planning Department to discuss their concerns regarding the legal and financial protections in place ahead of the imminent demolition of the chimneys, in particular whether the bond is in force and whether it is large enough to cover the cost of rebuilding the chimneys should the developer fail to replace them.  What they discovered was deeply disturbing:

The bond money is held in a Malaysian bank, CIMB
The value of the bond for the reconstruction of three and a half chimneys is only £11million.
The value of the bond is based on an estimate supplied by Philip Gullet of the Battersea Power Station Development Company.
This estimate has not been independently checked by cost consultants employed by Wandsworth Council or English Heritage.
The contract sum for the demolition and rebuilding of the chimneys was redacted from the copy of the contract sent to Wandsworth. So it is not possible to compare demolition costs against rebuilding.
The Council does not know if the bond is signed and in force, although the reconstruction contract starts next Monday.

HISTORY REPEATING…

This is all the more alarming in light of what happened when John Broome, the first failed developer of the site, took down but never replaced the west wall and roof, as it remains to this day. The council’s own report in 1989 criticised the woeful lack of safeguards and- some would say- gullibility of the planning officers.

According to Battersea Power Station Community Group the bond money should be held in a British bank if Wandsworth and English Heritage are to have any chance of getting at it in the event of a default.  The total value of the bond also needs to be increased substantially if it is to be able to cover the reconstruction of three and a half chimneys, if a default occurs.

With the chimneys reconstruction contract about to start, it is clear that Wandsworth Council and English Heritage are not protecting our cultural heritage -either in checking the proposed value of the bond or making sure the contract is signed and enforceable before the demolition and reconstruction project starts.

With interest rates about to rise, the possibility of the project failing yet again is increasing by the day.  If this happens when the chimneys are down, and it turns out the bond money isn’t there (as was the case in 1989 after Broome went bust)  the chimneys will never be rebuilt.

We need to rescue Battersea Power Station from these shameless, grey, dozing men who will sell our industrial heritage for peanuts and the enrichment of foreign “investors”. Keep an eye on the revolving door!

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London Evening Standard loves the future outlook of a wrecked Battersea Power Station

To start with, a few months ago the London Evening Standard proudly presented their collaboration with the owners of the Battersea Power Station on the ‘The Power 1000 – London’s most influential people 2013‘.

BPSeveningstandardpower1000_1

The endangered building was used as a backdrop for the party, no one seemed to be scared of the chimneys collapsing on them, even though the Standard had previously reported that they must be unsafe. The uncritical, back slapping love-in was topped with speeches from Boris Johnson, Mayor of London, Sarah Sands, Evening Standard Editor and Rob Tincknell,  Battersea Power Station chief executive.

And in the 13th November edition about ‘Battersea’s rebirth’ they enthusiastically trumpet the ‘creation of a completely new district where none existed before’.

Wandsworth Tory Leader Ravi Govindia claimed the area will “change faster and more dramatically than any other part of London”- perhaps but maybe not for the better.

As is their custom the owners of Battersea Power Station attempted to deflect the mounting criticism of their plans to demolish the chimneys by wheeling out their gimmicky use of the top of the chimneys, this time not for a single table restaurant, but a viewing platform.

A double page free puff for the Battersea Power Station project:

BPSeveningstandardFULL

Don’t expect the Evening Standard to be digging too deep, or indeed reporting at all, on the controversies surrounding the Power Station demolitions.

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Battersea Power Station: Out of the frying pan into the fire

The horror story continues…

Nightmare on Nine Elm Street

The abysmal Vinoly plans for Battersea Power Station that we had all hoped were finally dead and buried with the collapse of previous owners REO has come back to haunt all who care about the beautiful building and the quality of life for all those living in its shadow and the surrounding area.

Just when you thought it was safe Architect Viñoly has been hired as “creative brain” behind developer Mike Hussey’s plan for a new stadium for Chelsea football club. AAAHHHHHHGGGGG……

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Your TV tonight: The undead Grey Men of Battersea Power Station

On ITV’s London Tonight and LBC radio you can watch or hear Ravi Govindia, the leader of Wandsworth Council who, as former cabinet member for “strategic planning and transportation”, is particularly responsible for the failed private-property owner led regeneration of the area,  trying to defend the borough’s pathetic policy towards the obviously flawed and greedy plans for Battersea Power Station.

Only a few days ago George Osborne and Boris Johnson were doing their best to puff the disastrous scheme which is now as all but dead and buried by the creditors calling in their loans.


For the Battersea Power Station Community Group (BPSCG) it is just another “new beginning” as the fourth developer limps off stage to boos and jeers.

Keith Garner is also interviewed calling for the whole site to be put into public ownership for a sensible, viable, gradual development of the historic and beautiful building and its surrounding site. An ideal exhibition for industrial power ( see our previous blogs). Keith cites the difference in the approach of Southwark to the other Gilbert-Scott designed river front power station, the highly successful Tate Modern. Through partnerships and a gradual, planned development it shows what Battersea residents could have had these past 30 years.

WATCH: ITV London Tonight on Battersea Power Station debt

Spectacle’s crew were there today too and will be posting soon the bits of the interviews the broadcaster left out. Including an hilarious episode where the owners try to stop ITV filming by shutting the gates. Perhaps their last act.

Click Battersea Power Station for more blogs
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Or visit PlanA our general blog on urbanism, planning and architecture.

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