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Lendlease warns Haringey Council over planned development vehicle cancellation
Lendlease has warned Haringey Council it will “seek to protect [its] interests”, should councillors go ahead with their election promise to abandon a controversial development vehicle in the borough.
The multinational developer has written to the council ahead of a cabinet meeting next Tuesday where councillors will consider dropping plans for the Haringey Development Vehicle (HDV).
It comes as council documents reveal Haringey will need to pay £500,000 to Lendlease to cancel the HDV, and has spent a total of £2.5m to date on the plans.
Lendlease had been set to partner with Haringey on the vehicle, which would have taken ownership of council-owned estates for regeneration work.
However, protests against the plans eventually culminated in a new set of councillors opposed to the HDV being elected in May with a promise to cancel it.
In two letters sent to the council earlier this month, Lendlease first set out several potential reforms including setting up a council-owned company instead of the HDV.
Its second letter, sent on Monday, warned that “if the council decides to reverse our appointment as the successful bidder, we will have no choice but to seek to protect Lendlease’s interest given our very significant investment over the last two and a half years”.
The letter added: “Of course we understand the political considerations and that is why I wrote to you last week to set out our thinking as to how we can work together to meet the objectives of the council’s new administration. Again, I would like to stress that we are very keen to meet the council’s needs.
“It is important that in reviewing the HDV at cabinet on 17 July, the council does not take any step which infringes or damages Lendlease’s rights.
“Lendlease is entitled to be treated fairly and not discriminated against and the council is obliged to act rationally. You will presumably have taken legal advice about the full range of remedies that would be open to Lendlease if we were prevented from proceeding.”
It added that it “would have to question” how the council had been able to properly consider the options “to make any significant change of direction”.
Council papers for the meeting note that it has not yet reached the stage of financial close or awarding a contract to Lendlease.
It notes that it has made it clear in the procurement conditions that it “reserves the right not to award a contract; and/or to cancel or withdraw from the Competitive Dialogue Procedure at any stage”.
On the alternative routes presented by Lendlease, the council papers add that “none of these alternative options… would address the concerns of the political leadership about the fundamental approach underpinning the HDV”.
They also note that the ‘agreed costs’ incurred so far by Lendlease of £1.04m will need to be split equally, with the council required to pay £520,000.
The papers also note the council has so far spent £250,000 defending the plans against a judicial review of the process by protestors, which it won.
It has spent a total of £2.45m on the project to date, excluding staff costs, with the largest sum being £1m on legal costs not related to the judicial review.
The council’s cabinet will vote on the proposals to cancel the HDV at the meeting, which begins at 6.30pm on Tuesday and will be streamed online.
