Property Week: "How troubled Brent Cross was revived by a happy public-private partnership." (Who thought up "happy"?)

"The phrase 'development hell' was coined in the film industry, but is easily transferrable to property - certainly, the parties involved in the redevelopment of Hammerson’s Brent Cross Shopping Centre have had numerous opportunities over the last 15 years to think that some malign force was acting against them.

"However, in July this year the project appeared to have turned a corner when Barnet council announced it had signed an agreement with development partners Argent Related, Hammerson and Standard Life Investments. It is hoped that the project, which includes 7,500 homes, a new Thameslink train station, schools and community facilities, in addition to the redevelopment of the shopping centre, can at last proceed.

"The council's joint venture with Capita, Re, was crucial in getting the project to this point. Together, the partners designed a bespoke procurement process for the borough. Rather than working up a final masterplan and then seeking a developer to build it out, Barnet and Capita focused on finding a development partner for Barnet, a process that culminated in the appointment of Argent Related in March 2015.

"At the centre of the process was Paul Clark, development director at GL Hearn, part of Capita Real Estate, who talks for the first time to Property Week about how this summer's deal was struck and the benefits it brings to all involved. [All?]

"When did you get involved in Brent Cross?"

"We got involved in late 2013 when the London Borough of Barnet had been engaged in the project for well over 10 years and was working alongside Hammerson and Standard Life Investments. At the turn of the millennium they were looking to increase the size of the shopping centre.

"National planning policy was against out-of-town retail, so they came up with this solution that would see the creation of a new town centre to support the extension of the retail offer.

"Fast-forward a decade or so and Hammerson and Standard Life had secured an outline planning permission for the extension of Brent Cross and the creation of a new town centre at Brent Cross South on the other side of the North Circular.

"However, Hammerson had gone through a well-publicised change of business plan that saw them move away from large-scale mixed-use schemes.

"So they had approached Barnet and said 'Okay, we’ve got this consent, but we just want to focus on the retail and we're giving you the opportunity to go it alone on Brent Cross South.' Then Barnet went through a process of decoupling so that the north and south parts of the project could be delivered. That’s when we got involved with Barnet."

"How did you approach the task?"

"We did a large body of work around what its options were and how the council could approach the challenge of delivering this major piece of place-making. The council was looking for pace, certainty, long-term engagement - it had a long shopping list of requirements.

"We created a partnership model for long-term regeneration delivery between the public and private sector. The two key things are how we went about the procurement and how you expose both sides of the partnership to the gains that are achieved through regeneration."

"What were the main challenges?"

"One of the key challenges was how much investment the council was putting in both inside and outside the red line boundary, how much investment was put in by the private sector and how you create a structure that fairly recognises everyone’s engagement and captures the value growth that regeneration brings in the long term."

"How is the joint venture structured?"

"We created a joint venture limited company between the public and private sectors that takes the public sector’s land, compulsory purchase powers, skills and broader social and economic agenda and puts it alongside the private sector’s profit motive, skills and resources.

"The JV jointly owns and controls the business plan. The board of the company sets the social, economic and financial agenda and fundamentally the private sector is the development manager to that jointly controlled board. So, the public sector stays at the table for the long term in terms of decision making and the direction of travel. It’s very much about putting community at the heart of things. We’ve got long-term joint interests in the delivery. How will returns be distributed?

"Land is committed to the JV by the council. It’s a phased release of land by the council, which allows it to expose itself to the uplift through delivery. The calculation is done on the basis that the private sector takes a return on its investment; a return on cost that is fixed in procurement. We hope that as delivery unfolds, value is created through a regeneration premium and gains are shared between the parties. It also works to secure best value to the public sector.

"The council is doing all these great things outside the project's red line - a new train station, bus station and highway improvements. Under normal circumstances, the council wouldn’t be exposed to those gains, but under this mechanism it is. We’re getting better at capturing the benefits of regeneration."

"How did the procurement route you opted for differ to the competitive dialogue process?"

"One issue is that if you go through a competitive dialogue process to procure a master-plan-led solution, all of that work is necessarily done behind closed doors because the procuring party has to maintain competitive tension and confidentiality.

"So, you are creating a development solution that is outside of public engagement, and you really know by the end of the procurement that the solution [you have created] isn’t the solution that you’re going to end up with.

"People can have concerns over these big projects where the community feels they have been shut out. We've tried to design the process so they can engage in a much more meaningful way.

"We ran an OJEU-compliant process, but we went a negotiated route rather than a competitive dialogue, which saved everyone time and money. It was incredibly well-received and allowed us to move at pace. Because we were procuring a partner, not a solution, it was a much slicker, cheaper, quicker process."

"Would Brexit make the procurement of projects on this scale any easier?"

"Who knows where we will go from now with Brexit? But I imagine there will always be some sort of procurement process. Procurement is a process for fair treatment and that was always at the heart of our process. There will always be something like it - there will always be an obligation for the public sector to behave in a transparent way.

"It's the right thing to do, but you don’t have to let it hamper you. It’s about what you do to mitigate that risk. In my humble opinion, a lot of these processes get hijacked by procurement officers and procurement lawyers.

"It's in their interests to flag up all the different ways something can go wrong and encourages people to behave in a certain way. It takes a particular client to turn around and say 'we acknowledge all the risks but this is what we're going to do'."

"What sort of interest have you had from other public sector bodies?"

"Since we went over the line with the successful creation of the JV, I've been working with the Department for Communities and Local Government on how the lessons from the structure of it can be used for the public sector to unlock private sector investment in a way that ticks all of the boxes around community engagement, best value, procurement and land value capture."