The City's tallest building gets go-ahead

22 Bishopsgate - How the story unfolded

The developers of the soon to be tallest building in the City (62-storeys high) have succeeded in securing the support of the Planning and Transportation Committee of the City Corporation. Planning permission for the tower to be built on the site originally planned for the Pinnacle scheme was granted in November last year.

The project was put in jeopardy as a result of the impact it would have on the light passing to the windows of the surrounding properties. With the prospect of significant delays to enable all of the rights to light claims to be resolved, the developer called on the City Corporation to step in and use their planning powers to facilitate the development. The powers contained within the Town and Country Planning Act 1990 enable the local planning authority to effectively override private rights if a compelling case in the public interest is made out.

Background

The Planning Officer’s report started by detailing the benefits of the proposed scheme which amounts to almost one million square feet of high quality office space. The tower will measure almost 950 feet and provide in excess of 10,000 jobs. The report concluded that the public benefit of the scheme was overwhelming and so recommended approval by the Committee. The report was first due to be considered at a meeting on 10 March 2016. However, due to last minute representations from solicitors acting for the owner of a significant number of the affected properties, consideration was postponed until the next meeting on 5 April 2016.

The Battleground

A letter from the developer’s solicitor annexed to the report summarised the attempts made to reach agreements with all of those whose rights to light would be affected. This amounted to almost 100 different interests. It cited the obvious difficulties in concluding agreements across such a wide number of interests and stated that all of the affected owners had been contacted during the past year with many engaged in detailed negotiations.

Those advising the owner of a significant number of the adjoining properties challenged this and alleged that the use of the City’s powers would be premature. They cited the enormity of the task facing their client in analysing the loss of light to each of their affected windows. They alleged that negotiations were not nearly as advanced as had been suggested by the developer and challenged the extent to which they had been actively pursued.

The committee's decision

The Chairman began with the following introductory remarks:

The use of these important powers must be properly justified;
Their use does not deprive the neighbouring owners of their right to compensation (what wasn't said is that it can have a significant impact on the amount which will be paid);
There is a desperate shortage of top quality office space in the City;
The proposed development seeks to regenerate an important site which has been blighted for several years by unfinished works;
The exercise of these powers will only be justified where the developer has taken all necessary actions and where the project is genuinely at risk by the threat of injunction.

The Committee debated the issues and covered a number of the points raised both by the developer and the adjoining owners. The decision was ultimately passed by a unanimous vote. The most significant factors were:

The desperate need for high quality office space in the City;
The economic and employment benefits arising out of the development;
The need to regenerate a prime unused site;
The clear difficulties and time involved in reaching agreements with so many different parties.

The Committee also wanted to send out a positive message that they were prepared to use these powers in appropriate cases. The hope being that this would encourage adjoining owners to engage constructively with developers in rights to light negotiations. The case of 120 Moorgate being a prime example. Having been postponed for further negotiation from the March meeting, an update circulated prior to the April meeting reported that an agreement had been reached with the adjoining owner. This provides a good example of how the mere threat of the use of these powers can be used to encourage agreements.

Where does this leave us?

This is the second time in as many months that the City has engaged these powers. At the Committee meeting on 10 March 2016 they were used to facilitate the development of 21 Moorfields. That case involved a derelict site which might have remained as such if the powers were not engaged. The decision was also necessitated by the dependency of an adjoining Crossrail station on the development of the site meaning that further delays could not be tolerated.

Whilst these recent decisions may provide some encouragement for developers, the uncertainty around rights to light remains a serious problem. It is clear that the use of compulsory purchase powers will only be appropriate in very few cases which leaves the majority of developments open to the risk of delay or frustration by the threat of injunctions. Therefore, the need for change or clarification of the law in this area remains and the focus now turns to the Court of Appeal in July in the hope that they will provide it.

This has become a high profile decision this week and James' comments have been featured in The Evening Standard.

This briefing was written by James Souter, for more information please contact James on +44 (0)20 7427 6716 or james.souter@crsblaw.com