Nine Elms masterplan

8/7/2019 Nine Elms masterplan

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NINE ELMS MASTERPLAN


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THE NORTHERN LINE EXTENSION

The NLE is a 1.75 km extension of LondonUndergrounds Northern Line

The NLE will be the first privately fundedextension to the Underground network inCentral London.

The NLE is being promoted by TreasuryHoldings (TH)

Project Description


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OURNEY SO FAR


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PublicAcces

(PTAL

Avera


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January 2009; SKM for the GLA the NLE would be theonly scheme that could provide the necessary capacitywithout overloading Vauxhall station or causingsignificant congestion on the road network

Journey So Far

July 2009; the Mayor confirmed his support inwriting to TH In principle I support theproposed NLE

October 2009; TIF Test Case submitted toGovernment with support of GLA, TfL, LBL &LBW.


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March 2010; SDG prepared a draft NATA reportrecommending Route 2

May 2010; Public consultation was formally launched.

August 2010; Reference Design work completed

September 2010; Balfour Beatty provide commercial

confirmation of costs

September 2010; LUL confirms no objections on atechnical basis to the proposals and the projectprogressing towards a TWAO application

Journey So Far


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Nine Elms station

Kennington Loop turnouts

Intermediate shaft

Battersea station

Crossover

Crossover

Ventilation shaft

Ventilation shaf


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FUNDING


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The NLE would traditionally competefor funding from TfL

This route is not available in theshort-term

The Challenge was to create afunding strategy that did not requireany capital from TfL and did notplace any of the risk with them.

Funding the NLE


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In 2008 PwC were employed to consider options and long-list wascreated including;

Developer Contributions

Development levies and planning gain including CIL Asset Transfer Existing Development Value

Taxes Exchequer or Central Government Funding Accelerated Development Zone / Tax IncrementalFinancing Grants

Direct User Charges Securitisation of ticketing sales Securitisation of third party revenues

Indirect User Charges Operator concession contract

Funding - Sources


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Additionality is Key

The PwC brief was to identify the most viable /deliverable funding sources

The shortlist had a strong common theme:Additionality: i.e. the most appropriate source offunding for the NLE is from those that benefitmost from it.

The shortlist was;

Capturing value from the increaseddevelopment densities (Development Tarif)

Capturing increased taxation flows (TIF)

Capturing increased net revenue to TfL/LUL(Availability Charge)

Option 3 was discounted after further analysis as thenet increase was small / non-existent

Funding - Additionality


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Development Levy Progress

Development Infrastructure Funding Study (DIFS) - Sept2010 confirms requirement for 908m of Infrastructure inNine Elms including NLE.

DIFS also concludes that 850m of Levy, Masterplan, s106and other funding will be available in Nine Elms.

Gap is considered manageable and recent GLA pressrelease states NLE is Viable

Funding - Development Levy


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Tax Increment Financing (TIF)

On 20th September 2010 the Deputy PM announced thatLocal Authorities in England will be granted new borrowingpowers (TIF).

TIF will allow Local Authorities to borrow against thepredicted growth in locally raised business rates in order tofund key infrastructure.

The NLE has been the subject of a detailed TH Case Studywhich show annual incremental business rates of around89m per annum.

Alongside income generated by the Development Tarif, only50% of the increment would be needed to fund the NLE.

This partial business rates retention would only be neededfor 13 years.

In addition studies have shown that over 800m pa of othertaxes would be generated by the OA.

Funding


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The NLE in Nine Elms meets all the fundamentals of a

successful TIF being;

1. Genuine Regeneration Need (BPS)

2. A Well Defined Area (VNEB OA)

3. An Agreed Development Plan (OAPF)

4. Public Infrastructure is the catalyst for Regeneration (NLE)

5. The But for test (Development Levies cannot do it alone)

6. Leverages a significant amount of Private Sector Investment(The Whole OA)

7. Developers are in place

Funding


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Demonstrating Additionality

The proposals have a low take of the incremental businessrates

The scheme is in the CAZ, improving amalgamation benefits

Work is about to start on a full economic case

Income Lag

Often the business rates generated can be insucient tomeet the TIF funding requirements in the early years

The delivery of BPS with over 1m sqft of commercial spacealleviates this

Risk

Allocation and mitigation strategies to be developed

Size

Further work required to reduce size of TIF required

Phasing strategies to be considered

Funding - Hurdles to Jump


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Accepted as being the only transport infrastructuresolution.

TfL / LUL approve current design and costs.

Preparation for the TWAO application well advanced.

DIF study confirms available levy funding.

TIF legislation will support funding stream.

Summary


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Documents

Nine Elms masterplan