MIPIM 2016: Croydon Council has set up its own development company with the aim of delivering 1,200 homes on council-owned land by 2018.
Brick by Brick is a private company of which the council is the sole shareholder. It will seek development partners for some schemes and deliver others alone.
The financial model is one of self-sufficiency, with all costs relating to the operation of the business intended to be covered by the proceeds of development.
The council is likely to provide both debt and equity funding to the company at market rates, with this funding allocated from a “revolving investment fund”.
This allows the council to reinvest a return on investment either into wider council services or other further development activity.
As a non-contracting authority outside of the EU procurement regime, the council said it will be able to respond more quickly to new opportunities in the market place placing it on an “equal competitive footing” to other private sector developers.
The proposed sites have not yet been revealed. However, the first planning applications are likely to be submitted in summer 2016 with a view to starting on site in 2017.
Colm Lacey, Croydon Council regeneration director and chief executive of Brick by Brick, said: “This structure allows the council to extract value from the core components of development activity – funding, building, selling – in a very efficient way.
“Traditionally such value would leak out of the borough. The Brick by Brick model maximises the return to Croydon residents, and allows the council to reinvest in core services at a time when other budgetary sources are constrained.”
Lacey will be responsible for the management and day-to-day running of the company, including securing funding, land acquisition and development management.
The board comprises two council-nominated directors, Colm Lacey and Lisa Taylor (Croydon Council’s head of finance) and two independent, non-executive directors with extensive property experience and expertise in property development: Jayne McGivern and Jeremy Titchen.
The council, as shareholder, also provides observers to the board.
For the smaller sites programme, services will be commissioned from an architectural panel made up of Pitman Tozer, Mikhail Riches, Stitch, Mae, vPPR, Coffey, HTA and Croydon’s in-house practice.
Arcadis will deliver multi-disciplinary non-architectural services including: project management and employer’s agent, quantity surveying, sustainability and energy consultancy, landscape and visual impact assessments and transport planning.