Challenge Circles

ROYAL DOCKS CHALLENGE

CAN YOU HELP DANIEL BRIDGE AND THE ROYAL DOCKS TEAM DELIVER A NEW URBAN PARK FOR LONDON?

WELCOME

The Royal Docks Taskforce is an academic exercise bringing together 12 participants from the Class of 2017-18 of the Executive Masters in Cities to advise the Mayor of London and Newham Council on their plans to create a new Urban Park in London's Royal Docks.

This website brings together information based on in depth interviews with Daniel Bridge who leads the Royal Docks team.

REGISTER

The Royal Docks Challenge is open to nominated members of the Executive Masters in Cities. To access the full information, please register using the invitation code sent to you.

DATA

Once registered please read through the information and data shared by the Royal Docks Team

REPORTING

The culmination of the taskforce are three reports delivered to the Royal Docks team in late August 2018

Introduction

CASE WRITTEN BY SAVVAS VERDIS

Since 2000, the Greater London Authority (GLA) has played a key role in steering metropolitan level strategy in sectors such as transport, the environment and economic development. One of the key innovations coming out of the GLA, is  its integration of economic and social strategies through a spatial planning approach, mapping out where growth and investment should occur and where economic sectors would most likely become more competitive. From the outset, the Royal Docks were seen as a key part of an eastward growth corridor that had the necessary amount of brownfield land to accommodate new growth in the city. Beyond the market demand, what prevented the development of the area was the lack of transport and social infrastructure to transform the site from what used to be one of the world’s bustling dock areas to a liveable part of the city. It is not surprising that without this infrastructure investment successive government agencies such as the London Docklands Development Corporation, English Partnerships and the London Development Agency have, since the 1980’s, been unsuccessful in kick starting development. Could the Royal Docks team, an entity of the GLA and Newham Council finally change this?

In 2012, the Mayor in collaboration with Newham Council published a strategy for the area that coincided with the establishment of London’s only Enterprise Zone, to be managed by the London Enterprise Panel (LEP). Enterprize Zone status gave the Royal Docks a unique opportunity to retain future business rates from current and new occupants for a period of 25 years. This would ultimately provide up to £800 million for upfront infrastructure investment. Having completed a competitive bidding process to find the right partners to develop the biggest sites in the area, Daniel Bridge and the Royal Docks Team now to piece together the different sites in the area into a new urban park. What should be the vision for this urban park? What type of uses and programming would you suggest? Who and how should operate the new urban park? These three questions form the focus of this taskforce.

THE AREA

The Royal Docks are the Mayor of London’s single largest land holding. Historically, the Royals were part of the city’s thriving dock areas but since their disuse in the 1970’s and despite numerous regeneration strategies, no overarching vision for the area has been delivered. This is partly due to the complex physical severance from road, rail and water networks that exists in and around the site as well as the scale of the area, which compares to the size of central London.

Click on the tabs below for further information on the Royal Dock’s physical and socio-economic profile.

  • Scale
  • Social Analysis
  • Landmarks & Communities
  • Land

The Royal Docks are surrounded by four ward areas all within the London Borough of Newham. The table below compares these wards together with Newham and London averages.

(2011 Figures)Canning Town SouthCustom HouseBecktonRoyal DocksNewham AverageLondon Average
Residents159961341115141106793079848173941
% of households in Multiple Deprivation353735243726
% of people with no qualification232519142118
% of people unemployed89811109
Full datahttps://goo.gl/M0Q8kchttps://goo.gl/XUwGbuhttps://goo.gl/QfPU83https://goo.gl/kwqX0vClick on any ward link for Newham averagesClick on any ward link for London averages

The Excel exhibition centre is one of only two major conventions centres in London. London City Airport is the city’s dedicated business airport serving the City and Canary Wharf. The University of East London makes up the last of the three major landmarks in the area. In terms of established neighbourhoods, the Royal Docks are surrounded by North Woolwich and Beckton but both areas remain separated from the Docks waterfront due to major rail and road infrastructure.

The Royal Docks in Numbers

5
Billion pounds

Projected investment in the Royal Docks

170
Hectares

The Mayor’s single largest land holding

96
Water

Hectares of inland dock water. Europe’s largest.

800
Million pounds

Projected Business rates collected in the Royal Docks in the next 25 years

The development process

Bringing together the pieces

Unlike London’s Olympic Park regeneration, the Royal Docks do not provide a clean slate for development. The Royal Docks are home to some of London’s iconic institutions such as London’s ExCeL exhibition area, London City Airport and the University of East London. Any new development or masterplan will therefore needed to work around these institutions. To facilitate the development process, the Docks were subdivided into five large development areas: Royal Victoria, Royal Albert Dock, Silvertown, Gallions Reach and Royal Albert Basin.

By the summer of 2016,  the two larger areas, both owned by the GLA had already been granted planning permission from Newham council. The first was Royal Albert Docks by ABP Investment Limited. This was a vacant 14 hectare site to be developed into a new business destination for Chinese businesses wanting to locate their EMEA operations closer to their markets. Over 2.8m sq. ft of office space would be delivered together with 146,000 sq ft of commercial space with 846 residential units and 180 serviced apartments. The second site was Silvertown Quays by the Silvertown Partnership LLP. This was a 24 hectare site to be developed over three phases with 2.8 million sq ft of Brand Pavillion space (a type of permanent Expo for brands to showcase their products), 3200 residential units, 1.9 million sq ft of office space, 100,000 sq ft of retail, 200,000 sq ft for food and beverage and further space for hotels, leisure and 75,000 sq ft of community and education facilities. Following a public procurement process, both developers signed Master Development Agreements (MDA) with the GLA with the understanding that considerable levels of infrastructure investment will be put in place to attract tenants to the site.

The GLA together with Newham and the LEP recently commissioned the engineering firm Arup, to undertake an infrastructure prioritisation strategy to transform the Royal Docks. The full strategy is in the documentation below, which divided the area into themes and zones dependant on the current and future uses in the Docks. Their proposal also listed 39 key projects, amounting to over £350 million of investment that they considered vital to the success of the Royal Docks. These projects were divided into five categories:

  • Connected: Infrastructure related to linking the Royal Docks with neighbouring areas in East London.
  • Permeable: Infrastructure related to improving mobility within the Docks.
  • Competitive: Infrastructure to improve the Docks as a destination for business and commerce.
  • Distinctive: Investments related to making the Docks a unique destination in London
  • Prosperous: Infrastructure to transform the socio-economic make up of the area, which is currently one of the most deprived in London.

Arup’s proposed vision for the area saw the Royal Docks as ‘a place of many places’ but as many of the stakeholders highlighted, this vision could exasperate the fragmented nature of the site.

Could a new urban park prove a more holistic vision for the area?

Getting the funding right

Business rate taxes are traditionally collected by local authorities on behalf of central government. The government would then send back a proportion or a larger amount of these rates to the local authority in the form of a grant depending on the needs and budget of that authority. This redistribution scheme provided a balance between councils with high and low business rate collection levels. Since 2013, however, local authorities have been given the opportunity to retain any future increase in business rates in their area. This form of tax increment financing encouraged local authorities to turn more entrepreneurial by attracting new businesses in the area and therefore increasing their take of business rates and keeping any increase from their baseline year. Under this new devolved system, national government wanted to lower the amount that local authorities received from them and more importantly that allowed them to borrow against future business rate growth to fund infrastructure projects in their area. With Enterprise Zone status the Royal Docks had secured a unique funding model to finance the infrastructure in the area. With the approval of central government, the London Enterprise Panel (LEP) was entitled to retain all additional business rates generated within the Enterprise zone boundary annually for a period of 25 years. Having one of the UK’s largest new offers of commercial space in the pipeline, it was not surprising that Newham Council wanted a central role in deciding where any future business rate growth should be spent in the area. Because the Royal Docks fell under Enterprise zone rules, control of the business rate retention also involved the LEP, which reported straight to the Mayor. Any arrangements for collection, distribution and spending of income therefore required agreement between Newham, the LEP and the GLA. In early 2015, Daniel Bridge commissioned DTZ to carry out a forecast study on the potential business rates that the area could attract. He was well aware that only 23 years were left in potential revenue collection, which would only start the moment that the new tenants moved into the new developments.

The delivery of the development and attracting the tenants was therefore critical to attracting business rate additionality. DTZ based their study on a risk analysis of the projected take up of commercial, office and retail space modelled by the developers in their bids. Newham was not an established commercial location in London and so the developers expected that the infrastructure investment boost will reposition the area in the minds of the occupier market so that it competed with the likes of Canary Wharf and the International Quarter at Westfield Stratford in the Olympic Park. This was never going to be an easy battle. Over £6bn of public money were poured into the Olympic Park, with subsequent development piggy banking on one of the world’s most successful public realm provision. The Royal Docks was never going to see this level of investment, so what would help it stand out and create a step change in demand? A number of take up scenarios were developed by DTZ to calculate the take up rate of space in the Royal Docks over the next 20 years which was directly proportional to the business rates that will be received by the LEP from the occupiers. Because these business rates would be used to pay back initial loans to fund the infrastructure in the Docks, it was important that Daniel remained realistic on the amount of business rate revenue to avoid putting any future borrowing authority at risk. DTZ’s scenarios are summarised in the table below.

All scenarios relied on the infrastructure package being delivered. The table below shows that under all circumstances, the funding model is affordable with business rate revenue over 25 years being able to cover over £400m of capital investment. In fact the borrowing party would break even with only 120,000 sq.ft of the space being let compared to the 640,000 sq.ft that was projected in the developer agreements.

Scenario: 1a 1b 1c 1d 23
All phases50% take up44% cost increaseBreak evenDTZ profileDeveloper profile
Take up (sq. ft)446120223060446120117676642774642774
New jobs25657128282565794483034638457
Projected Rates Income* 833M 433M 834M 413M 1,243M 1,675M
Contingency (on income) @ 10% (83.3M) (43.3M) (83.4M) (41.3M) (124.3M) (167.5M)
Capital Exp. (incl. 4% finance costs) (421M) (367M) (496M) (351M) (438M) (470M)
Revenue Exp. 000000
Break even year (model in surplus) 20282036 (year 24) 2032203520242019
(year 16) (year 20) (year 23) (year 12) (year 7)
Peak deficit amount (50.6M) (75M) (100M) (57M) (22M) (5.7M)
Peak deficit year 202220272024202420202017
(year 10) (year 15) (year 12) (year 12) (year 8) (year 5)
Surplus/Deficit 368M 35M 304M 38.5M 776M 1,162M

Scenario 1: Minimum take-up of space both in the Royal Albert Docks and Silvertown Quays. This scenario is further subdivided into options that look at 100% of phases of development being completed within the 25 year business rate retention period or only 50% as in scenario 1b. Scenario 2: A slightly more optimistic view of the market based on DTZ analysis. Scenario 3: Based on the very optimistic developer assumptions.

GLA, DCLG, ENTERPRIZE ZONES, London Enterprise Panel, ABP, TSP, RODMA, ExCEL, London City Airport, University of East London, Newham Council

Stakeholders

National, city and local government stakes in a single development site

All stakeholders have a common goal of bringing the vital infrastructure investment to the area

GLA

Main landholder of the docks with the aim of turning the site into a great place to live and work. The GLA needs to ensure developers deliver on their development agreements.

Newham

Local planning authority and business rate collector aiming to turn the docks into a jobs generator for local residents. Has voiced concerns about development corporations that take powers away from local authorities.

Enterpise Zones

A UK national policy which provides identified areas with business rate relief and other incentives to encourage development and attract occupiers. Importantly it also enables the local retention of business rates for 25 years providing a long term income stream to borrow against.

LEP

The London Enterprise Panel is London’s advisory body to the mayor on the economy and skills. It oversees the entire business rate spending strategy of the Royal Docks. In principle will devote most of business rate revenue in the docks before investing money in other London projects.

ABP

Asian Business Park Ltd is delivering a non speculative business destination for Chinese firms. It has extensive experience in delivering business districts such as the one to be built in London’s Royal Docks. The company was founded in China in 2003 by chairman, Xu Weiping, and has established a reputation for developing large scale enterprise districts in China, through significant projects, bringing together clusters of companies. ABP has already committed to upgrade the Crossrail station in Custom House.

TSP

The Silvertown Partnership is a consortium of Chelsfield Properties, First Base and Macquarie Capital that will deliver a mixed use development of tech and innovation spaces and a number of brand pavilions.

RODMA

The Royal Docks Management Agency is the Estate Management company for the Dock Water paid. It is funded by a service charge fee paid by Royal Docks tenants. The organisation has recently tried to bring together the private sector partners to co-ordinate marketing activities and events on the water.

TfL

The city’s multimodal transport authority overseen by the Mayor. Transport for London has set aside future DLR revenues arising from increased fares in the Docks to fund the DLR stations upgrade.

To organise these stakeholders into a coherent governance structure, the GLA and Newham council set up the Royal Docks Team to direct the future direction of the project. The team would report to the London Enterprise Panel and the Enterprise Zone Programme Board and get input from the Royal Docks Advisory Board.

In February 2017, the Royal Docks Advisory Board came together to give the Royal Docks Team their take on their overall vision for the area and their feedback on Arup’s plans. Their recommendations are summarised below.

OBJECTIVES

Stakeholders were asked to rate the extent to which each of Arup’s five objectives were game changing in the Royal Docks.

Connected was by far the most highly rated objective with 13 out of the 17 respondents rating at the highest scale. Averages for each of the objectives were as follows:

Connected:  4.5; Competitive: 3.9; Permeable:  3.7; Distinctive: 3.6; Prosperous: 3.4

The distribution of answers in the graph below, shows that although there is general alignment and consensus amongst stakeholders in the Connected Objective (with most voting 5) there is more and more misalignment as you move to the right of the chart with an equal number of respondents feeling that the Prosperous objective is very important or not important at all.

In the workshop discussion, stakeholders mentioned the need to better articulate what makes the Docks unique and whether the area should compete with other districts on the smart/ digital domain or focus on one of its unique characteristics such as the water. The need to better integrate business and residential benefits was also discussed. This came to light because of the lack of consensus in the survey response around the ‘prosperous’ objective. A number of stakeholders mentioned that these objectives need not be exclusive.

VISION

Stakeholders were asked to respond to Arup’s vision of a ‘place of many places’

Responses from the online survey showed that the group was relatively split when asked if Arup’s vision of a place of many places was too fragmented. Three respondents said that the vision was fine as is, another two respondents were neutral but eight respondents said that the vision was too fragmented. When asked to suggest a higher level vision for the area, four respondents said that this was not necessary with another four responses suggesting the following:

  1. Low carbon/ tech
  2. Start building a vision based on what sets the Docks apart
  3. Start building a vision based on demand rather than strategy
  4. Start building a vision based on thematic linkages between the five districts.

During the workshop, participants emphasised the need to build a promotional narrative and an identity for the area that brings the multiplicity of uses together. In contrast some participants were supportive of a high level vision based on a low carbon/ tech future. This was questioned by some participants on the grounds that technology should not be an end in itself but a means to an end to meet the wider objectives. The Royal Docks’ ‘water uniqueness’ was seen as another option on which to build a vision, based on the existing assets of the area.

PRECEDENTS

Stakeholders were asked to list national and international precedents of successful waterfront areas.

Suggested precedents from the online survey were varied, both in terms of location as well as the mix of uses. The grid below shows each of the precedents together with the number of votes that each received. Liverpool’s Albert Dock, London’s South Bank, Cardiff Bay, Hamburg’s HafenCity and Copenhagen’s riverfront received several votes because of the following characteristics that were discussed during the workshop:

  1. Existence of an anchor cultural institution/s such as in the arts and or education sectors
  2. Freely encroach the water
  3. Clear hierarchy between places

Participants discussed the fact that most of these examples are smaller in scale and the majority of the precedents are in a city centre where there is enough activity already.

Key Documents

A list of key documents issues by the Royal Docks Team

This is where YOU help

The Task

A new Urban Park for London

The Taskforce will work together to come up with a vision for the Urban Park as well as its uses and operations. Three sub-groups will each produce a presentation and report on the following three themes:

Vision & Design

What is the vision and design concept for this new urban park? Study International precedents.

Uses & Programming

What temporary and permanent uses do you propose for this new park in relation to other major parks in London?

Operations & Management

Who and how should this park be managed and operated without posing a potential liability for the city?

It is important that sub-groups share a common information base and strategy for the Urban Park and as such will need to keep a cross-group communication channel.

Timeline

A list of milestones for your Taskforce

Before Residency

  1. Go through data
  2. Calls with LSE & Royal Docks Teams
  3. Form sub-groups
  4. Refine sub-group brief with Royal Docks Team

Residency Week

  1. Two day workshop and site visit meeting key stakeholders on site
  2. Refine sub-group brief with Royal Docks Team
  3. Prepare sub-group presentation for Friday 8th June, 2018

Remote Research & Analysis

  1. Submit final sub-group briefs by June 15, 2018
  2. Arrange group and sub-group calls
  3. Finalise overall strategy
  4. Prepare three separate reports on agreed briefs and submit by August 29, 2018