The developer and bank behind the failed £1.5 bn Silvertown Quays mixed use project are likely to sue the London Development Agency for £60 m.
Building reported that the developer, Silvertown Quays Ltd, is to challenge this week’s decision by the LDA to terminate its eight year agreement with the firm and to sue the agency for the amount spent working up the scheme. It is thought that Bank of Scotland, the bank behind the project, is to do the same.
David Taylor, the former chief executive of English Partnerships and chairman of Silvertown Quays Ltd, said he was “absolutely astonished” that the LDA had rejected the group’s revised bid.
The LDA this week said “it could not accept” revised proposals for the 4,900-home scheme, which was to include an £80 m aquarium designed by Terry Farrell & Partners, paid for out of the profits from the sale of homes. The news followed discussions with Silvertown Quays Ltd and backers Bank of Scotland and Kajima.
Silvertown Quays Ltd had been in talks with housebuilder Barratt and developer British Land to take the scheme forward. But Building reported that the LDA, which owns the site, became frustrated at the developer’s failure to start work.
Taylor said: “It seems almost unbelievable that the LDA should reject these positive proposals out of hand. Rebuffing Britain’s largest housebuilder in joint venture with one of the country’s largest most respected commercial developers almost beggars belief.”
Outline planning permission for the scheme was granted in April 2007 and was due to expire in April this year.
Building also reported that in recent months the LDA has been working with local council Newham on plans to use the 24 ha east London site as temporary exhibition space during the 2012 Olympics.
The new overspill exhibition space will include a new bridge over the quay between the site and the Excel Centre, where many events will be held as part of the Games.
The Bank of Scotland declined to comment on the reports but a separate source told Building it was considering “all the options”.
