Property developer Lendlease has warned Haringey Council it could face legal action if it halts its controversial £2 billion housing project
The north London borough will next week (17 July) vote on whether the public-private partnership should be axed, with the new leadership’s preferred option to terminate the deal.
Lendlease has written to the newly elected cabinet stating that if the council scraps the project it will have no choice but to ‘seek to protect its interests’.
The deal – known as the Haringey Development Vehicle (HDV) – was approved last July and aimed to build 6,400 homes, as well as new schools, a health centre and a new town centre for Wood Green.
But the 50:50 joint venture was fiercely opposed by local residents and divided councillors within the Labour-run authority, causing many who supported the deal to step down at May’s local council elections.
Former council leader Claire Kober quit her post in January, claiming she had experienced ‘bullying’ over her decision to push through the flagship policy.
The newly elected leadership ran on a manifesto which pledged to scrap the HDV, but next week’s vote will formalise the decision.
A report argues the cabinet was elected on a promise to build ’council homes on council-owned land’ and that the deal will now ‘not go ahead’.
It reads: ‘The new administration does not agree with the proposed transfer of public assets out of 100 per cent public ownership at the scale envisaged by the HDV proposals.’
It acknowledges the council will have to pay Lendlease around £520,275 in costs if the project is aborted. According to council documents, Lendlease has spent £4 million on work related to the HDV.
In a letter to Haringey’s chief executive officer, Zina Etheridge, and its newly elected leader, Joseph Ejiofor, Lendlease Europe chief executive Dan Labbad said the option of attempting to ‘abandon the procurement’ was not open to the council.
Labbad wrote: ’If the cabinet attempts to reverse our appointment as the successful bidder we will have no choice but to seek to protect Lendlease’s interests given our very significant investment over the past two and a half years.’
He added: ’It must not take any decision which is irrational in particular in the context of the borough’s urgent need for housing – which requires very significant investment and capability.’
’You will presumably have taken legal advice about the full range of remedies that would be open to Lendlease if we were prevented from proceeding.’
Gordon Peters, of the Stop HDV campaign, said the developer should ‘step back’ and allow the democratic process to take place.
He said: ’A lot of people within the property industry said the HDV was a bad deal. Haringey is not against private developers, but it is a question of what kind of partnership it really was. There was no guarantee ever made of social housing replacement.’