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I referred earlier to a paper that Haringey had published, which revealed all the calculations behind FEC's planning application for Hornsey Town Hall. The story has now made the printed press in the form of the Ham and High , in an article by Jon King, with the headline "Developer stands to make £22m profit out of £3.5m Hornsey Town Hall...".

In the article I am quoted as saying “The developer has almost certainly understated the profit to demonstrate how borderline the viability is in order to reduce other commitments such as the proportion of affordable housing." In most cases this would be a completely general purpose statement, based on the probability that FEC don't want to be seen raking it in too much, so given a choice of assumptions they'd go for the one that understates the profit. At the time I write the unredacted version of the document is still available, for instance at this url. So we can have a little look at some of their assumptions, and turn my assertion into something backed by at least a smidgeon of evidence. 

In the EVA the consultants value the 146 flats in the development at £645,485 each, giving a total value for the residential sales they might expect of £94,240,800. But the value per flat they have adopted is downgraded because some of the flats are conversions. Is this a fair assumption? I think not, The converted flats are in a superb art deco, grade II* building, in the very heart of one of one of London's sought after areas. If anything, they should be valued at a premium to the market. As indeed should the new builds outside the Town Hall, which have the benefit of the promised Arts Centre just a few yards away, as well as all the improvements FEC are to make to the public spaces. Not only is the Square to improve, but entirely new landscaped gardens dedicated to the development will be created as part of the scheme. Again, we should be expecting these flats to sell at a premium to the market.

So, I'm going to make a different assumption, that these flats can sell for an average of £800,000 each. Of course they can, a premium position, in a unique setting, in a city where all property is desperately sought after by investors and by residents.

146 times £800,000 = £116,800,000, i.e. more than an extra £22m in sales, for no extra cost in development. I.e. more profit.

Tags: HTHbaddeal, far east consortium, hornsey town hall, ojeu, unredacted

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