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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