6760. Then we turn to the third page and to section 3 of the land disposal policy which deals with the land to which the policy applies and I wonder if you could comment on paragraph 3.3 as regards Mr Pritchett's Petition, please?

   (Mr Smith) Yes. In the central area there is a mixture of sites. There are some fairly large sites that you will have seen come up on the plans that are required broadly for new ticket halls at each end of new stations and there is, as ever, a complete mixture through the central area. Some of those sites are owned wholly by single large landowners or large companies which are property companies. Others are in multiple ownership and I think it is fair to say that Mr Pritchett's site is one that we said it has got 20, but I think if you add on the flat owners it has well in excess of 20 different owners on that site. The whole purpose of the policy, when we forget the detail, really stems from an undertaking given by the Secretary of State to the first Committee that he would do all he could to bring the development of these sites forward as soon as reasonably practicable after we finish the Crossrail works, and the policy, really, is geared to that fact. The reason we brought this about was that we did not want to sell these sites and get whatever price we could get for them afterwards and not see them developed. In other words, we did not want them going to property speculators who then sell them on. These sites and this policy deals with a case where we say: "Here it is; pay us the proper price and get on and develop it. If you don't develop it within a certain time we will then sell it to someone who does". So we will deal with it on a leasehold basis and we will do it for development. Obviously, if you have a site like Mr Pritchett's, where it is in 20 different ownerships, if we split it up into 20 different parcels it becomes a bit of nonsense in terms of trying to get that site developed early in line with the local planning policy—it just will not happen. So that is why we are saying that the intention in 3.3 is that we will dispose of these sites not in a fragmented manner but as a whole so that one developer can get on and develop that site. That is a rather long-winded answer, I am sorry.

  6761. Just to turn to the particular circumstances of this site. To remind ourselves of the limits of the powers conferred by the Bill, does the Bill confer powers on the Promoter to carry out an over-site development?

   (Mr Smith) No, we are seeking no powers from Parliament to undertake over-site development. What this Bill seeks is just powers to build the ticket hall, shall we say, at this location. We have given an undertaking, which is enshrined, also, in the land disposal policy, that we will comply with the local planning process that is set down in planning laws and the local planning policies in the nature of the development. So it is outside the powers we are seeking. We will go through the normal planning processes when these sites are developed, and local people will be able to comment on whatever plans come forward.

  6762. That local planning process, in this case, of course, falls to the local planning authority, Westminster City Council, to regulate. As Mr Pritchett has already mentioned, they have promulgated a development brief for this site. You are familiar with that document, I believe.

   (Mr Smith) Yes, in a general sense. I think it broadly puts forward mixed use development on this site, which includes, I think, retail and residential. This is, essentially, a site that is in Soho, it should be developed, in my opinion, and I am sure the council, who are the determiners of that, would see to it that it is developed in line with the general character of the area.

  6763. Mr Pritchett mentioned the fact that the site lies within a conservation area. Is that a factor to which the development brief attaches significance?

   (Mr Smith) Yes, it does. Obviously, we will want to bring forward more details in due course, but being in a conservation area it will, if you like, ensure that any development has regard to the character and townscape of the area.

  6764. Another point: Mr Pritchett mentioned the fact that Fareham Street, I think it is, bisects the northern and southern sections of the western ticket hall site. Are there any proposals for that street to be stopped up on a permanent basis?

   (Mr Smith) Not on a permanent basis. On a temporary basis it will have to be stopped up whilst we build the works, but not on a permanent basis.

  6765. Just returning to the disposal policy itself, we have looked at paragraph 3.3. That refers to guiding principles and those are set out in section 4, are they not?
  (Mr Smith) Yes, they are: 4.2.

  6766. We see 4.1. The Secretary of State's intention is there set out: "to dispose of an interest in a site to which this policy applies, holders of Qualifying Interests will, subject to the provisions of this Policy, be given first opportunity to acquire that interest at the market value before it is offered to the general market". Then, insofar as the determination of the nature of the interest to be offered and the terms of any transfer are concerned, the Secretary of State states he will have regard to certain guiding principles, which are then set out in 4.2. If we turn to page 4, one of those guiding principles, 4.2.4, refers to "the need to secure in the public interest the carrying out of development or redevelopment associated with the Crossrail works to meet the planning, environmental and heritage considerations applicable to the sites affected." Then, at 4.4, there is a reference to certain requirements the Secretary of State will have as regards the credentials and experience of holders of qualifying interests if they are to meet the guiding principles and the fact that they can secure the necessary financial and development expertise. Do you want to say anything about those provisions?

   (Mr Smith) Yes, I would just add, I think, that these developments are going to be above live railways, ticket halls, so Crossrail will want these developers to be of sound financial footing (they do not want them to start and then go into liquidation, or something of that nature), they will want them to have experience of this type of development before they start, and they will want them to have the necessary resources, expertise and track record. So it is that sort of choice. It is different from where public authorities have a bit of spare land that they can just sell and someone else can get on with the development; this will be above the roof of the station ticket hall, so it is quite right and proper that they have a selection of developers who can actually do the work and not just any old Tom, Dick or Harry coming in and dealing with it. That is the reason for that in the land disposal policy.

  6767. Then, in section 5, we see the Secretary of State gives some guidance on the interests which will qualify for the offer back under the policy, and at 5.1(iv) we see that there is a reference to the approach in the case of fragmented ownership. It states that in those cases a consortium of former owners who indicated a wish to purchase the land collectively will qualify.

   (Mr Smith) Absolutely.

  6768. I think Mr Pritchett touched on that and indicated that that might be a way forward in this case as a matter of principle. There seems to be consistency between his aspirations and the policy.
  (Mr Smith) Yes. If all the owners could get together and form a consortium and the lead part of that consortium is a company of the nature that I outlined to the Committee—in other words it has the experience and track record etc—there is no reason why we would not deal with them.

  6769. Turning to timescales of procedures, again picking up on your theme of the central significance of the planning process and the public interest in securing an appropriate form of over-station development, again, that is touched on in 6.2; the need generally for planning consent to have been obtained as part of an offer back, in accordance with the undertaking that you have already mentioned to the Committee.

   (Mr Smith) Yes.

  6770. Then we know the price to be paid (6.4) will be the open-market value. Mr Pritchett has already alerted the Committee to that aspect of the policy. Then I would just like, finally, to turn to the appendix, which provides a little bit more detail about the operation of the policy, and the guidance note on implementation, which is at page 9 of the information paper.[10] If we turn particularly to page 12 and what is said in amplification of paragraph 4.4, we see that this is reflecting the evidence you have given.[11] There is a reference in 4.41 to: "the nominated undertaker will take steps to assess the financial capacity and redevelopment capability of the transferee of the interest to be disposed of and will not proceed with a disposal under this policy to any party unless it is satisfied that the transferee can fulfil the terms of the transfer and meet the Guiding Principles". We looked at those briefly a moment ago. Then there is an indication of how the nominated undertaker will normally proceed in assessing those matters, and two alternative scenarios are spelled out there: either a property development company with certain experience and track record (and you explained the reasons for that), and then the alternative, the formation of a consortium (and I think you have just touched on this point) in which at least the lead company within the consortium should have a similar degree of experience, expertise and financial capability.

  (Mr Smith) Quite. That is correct, yes.

  6771. MR MOULD: Thank you very much.

  6772. CHAIRMAN: Mr Smith, what is going to happen is that Mr Pritchett is going to sell his part of the flats for which he will get the open-market value. It is going to be replaced by a much larger development over the ticket hall which could be a great deal more valuable than a proportion of his existing building. Why does he not get the advantage of the extra value of the new development.

   (Mr Smith) In the assessment of compensation, my Lord, I think he is entitled when we look at the value for land, ignoring the impact of the Crossrail scheme. If that were a site that was imminently ready for redevelopment, ignoring Crossrail, he could, if that gave him a higher value, take that approach. I think the answer to your Lordship's question is that in the absence of Crossrail this site would not normally be redeveloped; it has too many owners, it is in a conservation area and it would not be developed. So, in essence, Mr Pritchett is getting the most for his land ownership in selling the flat as it stands.

  6773. LORD BROOKE OF ALVERTHORPE: If I may just continue on the same theme, Mr Mould has just drawn our attention to 4.3.1(c) that in the event that you sell it to a developer and the developer then sits on it rather than develop it, and that there is a substantial profit being made down the line, is there any way in which there is a right for people such as Mr Pritchett to benefit from such a development, even though it may be well down the line?

   (Mr Smith) The answer, simply, is no, and the reason why it is no, my Lord, is because we will not sell these sites. I have not gone into detail but the way we intend to deal with them would be by an agreement for lease and lease. In other words, we would agree with a developer what that developer would build and when he would build it, and until he has built that development he does not get the lease for the building. Usually these agreements have a time limit in them and they, for example, say: "You will develop this or commence development within the next X period (two years) or you will complete the development within five years"—something of this nature. If it goes beyond that and it is not even started then, frankly, we can go to somebody else. It is that sort of nature.

  6774. What does 4.3.1(c) mean then? There is a benefit there, it seems to me, accruing to the Secretary of State.

   (Mr Smith) That is a slightly different—

  6775. That is the one I raised.

   (Mr Smith) Yes. That is where Crossrail may agree to dispose of this site, there is a planning consent to the development but he, the developer, manages to convince the local authority that there should be, say, another floor on the development, which gives it extra value. Then in the way in which these sites are disposed of there would be provision for what is called some overage or some top-up payment payable to the Secretary of State in those circumstances. So that if the actual planning consent is not actually built and something extra is applied for, then the Secretary of State will receive a payment for that extra slice of development. That is what it is trying to say. I am sorry if it is not clear.

  6776. It seems clear. It is just that you are saying that the original seller, Mr Pritchett, has no interest in that.

   (Mr Smith) Unless he is in a consortium.

  6777. Or a consultant.

   (Mr Smith) Yes.

  6778. MR PRITCHETT: On the last point, it seems to me that the only way of getting one of the new flats that will be built on the site would, in fact, be to be part of a consortium which gets part of this uplift, because that is quite possibly the only way in which I would be able to afford one and guaranteed actually to get one. A few small questions. First on Fareham Street: on previous occasions when Fareham Street has been closed for various reasons it has caused chaos throughout east Soho because it is, in fact, the only street through which you can travel by car or delivery lorry from the west or the north through to the south-eastern quarter of Soho. For example, if you bought something and you wished to bring it home or you were delivering to some commercial premises in Frith Street or you were trying to get to Covent Garden, or something, it is quite an important road. It would, of course, be possible to clip the development site very slightly so as to widen Diadem Court and run the traffic through that during the process, and then you have the whole of Fareham Street. I would be interested to know what your proposals are for dealing with that problem.

   (Mr Smith) I am afraid I am not a traffic expert. All I can say is that I do understand Fareham Street is going to be closed temporarily during construction and that the Crossrail project is in discussion with Westminster Council. On the details of that, I am afraid, I cannot really enlighten the Committee. I am not a traffic engineer, or I would not wish to stray into those areas.

  6779. Thank you. At what point would you consider that this land disposal process would take place, bearing in mind we do not even have Royal Assent yet and we are talking about acquiring the properties in 2010. On the other hand, we need to get on with redevelopment. When do you think that will happen?

   (Mr Smith) If you are talking about the redevelopment—

11   Crossrail Information Paper C10-Land Disposal Policy, Appendix 2, http://billdocuments.crossrail.co.uk (LINEWD-IPC10-012 and -013) Back