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Having failed to negotiate the settlement of a rights to light dispute with the owner of neighbouring 1 Finsbury Circus, the developer of 120 Moorgate sought help from the City Corporation. The Planning Officer's report recommended the use of statutory powers to facilitate the development but the Planning and Transportation Committee appeared reluctant to approve their use. This article looks at the issues and asks the all-important question of where this leaves developers.
Planning permission was granted in 2011 for the proposed development of 120 Moorgate into almost 200,000 square feet of office and retail space. The scheme has been on hold since then due to a dispute with the owner of 1 Finsbury Circus over the likely loss of light to their building. During the five years since planning permission was granted, negotiations between the developer and the neighbouring owners have been very slow. In order to try and move the discussions forward the developer obtained permission in December 2015 for a revised 'cut-back' scheme reducing the loss of light. A report put before the City's Planning and Transportation Committee concluded that, notwithstanding all of the developer's efforts, a negotiated settlement was unlikely. Therefore, the recommendation was for the Committee to exercise its powers under Section 227 of the Town and Country Planning Act 1990 to acquire the development site for planning purposes and effectively allow them to override the neighbouring owner's rights under Section 237 of that Act.
Given the serious consequences of the operation of these powers, local authorities are reluctant to use them other than as a last resort. The last documented case where the City was asked to engage these powers was the Goldman Sachs headquarters. In that case two neighbouring owners had refused compensation payments of £1.3 million each and so Goldmans asked the City to step in and assist. As with 120 Moorgate, when the recommendation first came before the Committee it was postponed to allow time for further negotiation. The Goldman Sachs development amounts to almost one million square feet of office space to house one of the City's largest employers. It is easier to see the wider public benefit in that case, which is an important factor in the exercise of these powers.
The owners of 1 Finsbury Circus sent a last minute email to the City shortly before the meeting at which the recommendation was to be considered indicating they were prepared to negotiate. Whether this was a cynical ploy to buy further time remains to be seen. For now consideration has been postponed to the next meeting in March and it will be very interesting to see what happens should a settlement not be achieved by then.
The uncertainty surrounding the resolution of rights to light disputes remains a major factor on the developer's risk register. There is a real need for more certainty which could come in one of three possible ways:
The Law Commission produced recommendations for change in December 2014 but there is no sign of those being advanced any time soon. The City's approach to 120 Moorgate shows that local authorities remain nervous about stepping in to assist. There is, however, a glimmer of hope from the courts in the shape of a case due before the Court of Appeal in July this year which may provide further guidance.
This article was written by James Souter.
For more information, please contact James on 0207 427 6716 or firstname.lastname@example.org.