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Boris Johnson is expected to quash the London Development Agency’s plans to take control of 130 acres of Olympic Village land in east London, as part of a wide-ranging review of the department. LDA officials have been in talks with Channel Tunnel rail link builder London & Continental Railways about acquiring the circa £450m site. The land will house zones two to seven of the Stratford City Olympic Village, where Australian developer Lend Lease will build more than 4,000 homes for the athletes and 1m sq ft of offices. However, the new London mayor is likely to reject the proposed acquisition. He is understood to believe that much of the LDA’s work should be wound up. Sources claimed that he could also consider a part-privatisation of the department. He has already ordered a review of the LDA, focusing on allegations of mismanagement and corruption A source said: “The LDA has been keen to take control of the land, and will be even more keen now that it once again needs to justify its existence.” LCR is expected to shortly unveil details of a three-way break-up of the business, including a sale of its landholdings. It owns 240 acres of the South East’s most valuable development land – principally around the Olympics site and at King’s Cross, N1 – which is worth upwards of £1bn. However, if the LDA’s purchase is vetoed by Johnson, LCR will have to rethink the sell-off. Instead, it may spin off into a pure property company that would continue to act as jv partner to Lend Lease at Stratford and Argent at King’s Cross Central. The sale of 40 acres at Stratford to Westfield – developer of the £1.5m Stratford City shopping centre – will still go ahead. EG revealed last month that the £170m site was being sold to the Australian developer (12 April, p25). The majority of the proceeds from the sale of LCR’s landholdings and other businesses will be paid back to the government, which used £3.7bn of bond finance to underwrite the development of the high-speed Channel Tunnel rail link. paul.norman@rbi.co.uk
