Tag Archives: Red Door Ventures

Last chance saloon

27 Mar

!04 studios in this converted office building

Last week Sir Robin’s cabinet approved a loan to Red Ventures, the council-owned property company, of £28.9 million to buy a property in north London.

The property in question is Zenith House (pictured above), a refurbished office building in Seven Sisters. Planning rules for converted commercial properties are much looser than for purpose-built residential buildings and the developer has crammed in 95 studios and 9 flats.

The website advertising this development says the studios “range from 319 to 388 square feet.” Which sounds quite a lot until you translate it into square metres – it’s just 29.6 m2 to 36 m2.

The UK government’s ‘Technical housing standards – nationally described space standard’ sets the minimum gross internal floor area and storage for a one-person dwelling as 37 square metres.

So even the biggest studio in Zenith House is smaller than the minimum. But the standard doesn’t apply because this is a refurbished commercial building.

It is fair to say that if this scheme was it was in Newham and required planning permission, it would never be given.

Despite the high number of units and some fairly optimistic assumptions about occupancy, the return to the council over ten years is paltry.

By the end of year 10  LBN will receive a net income of £113,000.

Overview and Scrutiny has called the decision in and will meet tomorrow to discuss it. Sir Robin has scheduled an emergency cabinet meeting for Thursday at 10 a.m. to receive O&S’s verdict and, if necessary, overturn it.

But why the rush?

The government is changing the rules on ‘prudential’ council borrowing to prevent them taking out loans to fund purely commercial acquisitions and from ‘investing’ outside the borough. These new rules come into effect on 1 April. If Sir Robin doesn’t get this through by close of business on Thursday the deal will fall through.

Let’s hope it does. Why is so much being staked for such a low return, in a scheme that doesn’t provide a single new home in Newham? Sir Robin has only a few weeks left in power. Councillors should not let him bind his successor’s hands by tying up cash in imprudent and sketchy ‘investments’.

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Oops!

2 Mar

I’ve written before bemoaning the shoddy state of record-keeping and a generally lax attitude to quality assurance at Newham council.

But a paper going to cabinet next week just about takes the biscuit.

This report seeks approval to the correction of the Minutes of the Cabinet Meeting on 20 February 2014

Yes, you read that right. They need to correct a four year-old set of minutes.

Why? Because the minutes of that meeting omitted to record a key decision in relation to setting up Red Door Ventures, the council-owned private rented development vehicle. That decision was to

Agree that the company be provided with funding through state aid compliant loans and grant facilities

So the council has been lending money – A LOT OF MONEY – over the past four years to Red Door Ventures without any properly recorded authority to do so.

Cabinet will undoubtedly agree to

correct the minutes of the Cabinet meeting held on the 20th February 2014 and ratify decisions made under the purported delegated authority, made in good faith, pursuant to the omitted recommendation.

But this is, to say the least, an embarrassing oversight.

On its face, this is an administrative cock up rather than Sir Robin over-reaching his legal authority (in contrast to the Collegiate 6th Form, where he did something he had absolutely no power to do). It is reminiscent of the unapproved £10 million overspend on the East Ham Town Hall campus project. That was also blamed on unnamed officers. The politicians, who should ultimately be accountable, just shrugged it off.

It all reflects extremely poorly on someone who is seeking a fifth term of office, claiming to the candidate of experience and competence.

Newham’s Red Door Ventures to buy Collective Old Oak

7 Dec

EGi – News Article – Newham’s Red Door Ventures to buy Collective Old Oak:

“The Collective Old Oak is close to being bought by Newham Council’s PRS developer Red Door Ventures.

“The arms-length development company, which uses council funding to build rental schemes around London, is understood to be paying close to £120m for the co-living scheme.”

And where is this £120 million investment located? NW10. The London Borough of Ealing.

Correction

The original version of this post said that the Collective Old Oak was in Brent. Although parts of NW10 are in Brent, the specific postcode for the development is in neighbouring Ealing. Thanks to Cllr Muhammed Butt, leader of Brent council, for pointing this out.

Making plans for Robin

26 Jun

Scene: the mayor’s office in Building 1000. Sir Robin Wales is meeting representatives from ‘executive recruitment consultants’ Moneyfore Olderope & Co.

Date: sometime in the distant future

Sir Robin: Thanks for coming in, guys. We need some help finding someone to chair the board of our private housing rental business Red Door Ventures. People who can give us the independent advice we need so that we make the right choice for our residents. 

Moneyfore:  At Moneyfore Olderope we know that’s what really matters. You can rely on us.

Sir Robin: It’s an important job. Red Door Ventures is owned by the council, but operates as a private business. We’ve used the borrowing power of the council – backed by public money – to build 3,000 new homes and buy 500 others. But we’ve done it in a way that means we aren’t obliged to let any of them to people on the housing waiting list. Most of the homes are let at full market rates which, as you can imagine, puts them out of reach of those kinds of people. But for appearance’s sake – after all, we are supposed to be a Labour council – some of them are rented at what we call ‘affordable’ rates.

Olderope: ‘Affordable’?

Sir Robin: 80% of the market rate. 

Olderope: So they’re still quite expensive then?

Sir Robin: Oh yes, way too much for people who need social housing.

Moneyfore: 3,500 homes at London rents. Even with a few of those [makes air quotes gesture] ‘affordable’ units you have quite a business there. £5 – £6 million a month in revenues?

Sir Robin: In that ballpark.

Olderope: Which is why you need a big name to chair the board. Give it the profile it deserves.

Sir Robin: But not just any big name. We need someone with knowledge of the local area. Someone who knows how to keep the press onside. Someone the councillors on the board can look up to and respect, who can provide the leadership and vision they are used to.

Moneyfore: So they’d need political as well as business experience.

Sir Robin: Absolutely. And it would be good if you could find a candidate with previous experience as a director on a big public sector delivery project. Like the Olympics, say.

Olderope: [scribbles the word LOCOG on notepad] Go on…

Sir Robin: You know, I always think a title adds a bit of gravitas. A lord, or a Sir. Always looks good on the letterhead.

Moneyfore: Those people are quite hard to find. And they don’t come cheap.

Olderope: Are you thinking this is a full time role, or a day or two a week?

Sir Robin: Part-time. Something that might suit someone who’s recently retired but wants to keep their hand in, so to speak. And earn a little to top up their pension.

Moneyfore: A little?

Sir Robin: We were thinking in the region of £40 – 50,000 a year for a 2 day week.

Olderope: Very reasonable.

Moneyfore: Well, leave it with us Sir Robin. We’ll have a think about possible candidates. Come back to you in a week or so with a list.

They stand up and shake hands.

Sir Robin: Oh, before you go… this isn’t public yet but I’ve decided not to stand for re-election next year. It’s time to wind down a little. But it would be nice to still have a little something…

Moneyfore: … to keep your hand in, so to speak.

Olderope: And top up the pension.

Sir Robin: Exactly. So if you hear of anything suitable…

Moneyfore: Funny you should mention it, but we’ve just received this interesting new brief…

Fade to black