Southwark Council has agreed to enter into a new exclusivity agreement with with Lend Lease for the Elephant & Castle regeneration. The decision was made shortly after councillors heard that the major projects director Stephen McDonald had resigned.
Southwark Council leader Nick Stanton said: "Despite the effects of the worst national recession many of us will ever have experienced, we are very pleased to continue with Lend Lease to realise our joint ambition of transforming this historic part of south London.
"Although there remains a huge amount of work to do, Lend Lease has put forward a proposal that we believe will take us jointly to final negotiations that quantify the impact of the recession, resolve the outstanding issues and finalise an agreement which satisfies the financial and redevelopment requirements of the council and Lend Lease."
Presenting the proposal to the executive, Cllr Paul Noblet said: "We have worked very hard to come up with a few pages which can give us great heart in moving forward with this project with Lend Lease."
Southwark Council chose Lend Lease as its development partner for the £1.5 billion regeneration in July 2007 but progress on achieving a full contractual agreement has been limited. Instead an exclusivity agreement was entered into the following year. This expired earlier this month.
"We were all frustrated that we weren't able to complete negotiations with Lend Lease by 1 July," Nick Stanton told the executive. "But it has to be said that given we selected them two months before Northern Rock started going under it's not surprising, considering everthing that has happened in the property market since."
Cllr Stanton, who reported on recent discussions with the Lend Lease chairman, also circulated a letter confirming Lend Lease's commitment.
"I remain absolutely convinced that this is probably the seminally single most important contract Southwark Council is likely to enter into with anyone in our political lifetime," said Cllr Stanton. "It's absolutely worth taking whatever time it takes to get it right. But having said that I think we are all conscious that people want to see some conclusion to this as soon as possible."
Council chief executive Annie Shepperd, in a message informing councillors of Stephen McDonald's resignation, said that he had "completed the job he set out to do" as strategic director of major projects. His remit included the regeneration of Elephant & Castle, the Aylesbury Estate and Canada Water.
McDonald's place at the meeting was filled by deputy chief executive Eleanor Kelly.
Labour Regeneration spokesman Cllr Chris Page said: "Two weeks ago the Lib Dems told us they were confident that the wait was almost over, now they've come back, yet again, saying they need more time. They have not kept to a single deadline, so this time they're simply refusing to give us one. People around the Elephant and across South London are sick and tired of waiting for the regeneration to get going.
"For two years the Lib Dem/Tory coalition have been telling us that they're close to signing a deal, but we're still waiting. They're tired and have run out of steam. If Cllr Nick Stanton didn't think there was going to be an agreement, he should have told us, he should have said that we're no longer working to the same timetable. You just can't expect people to be kept in a permanent state of anticipation for two years; it's not fair, it's not honest and it means people lose faith.
"The council are refusing to publish a timetable, but even if we could see progress being made, which we can't, how could we ever trust the deadlines and timescales that the Lib Dems and Tories suggest? Again and again the coalition has set deadlines and missed them, set deadlines and missed them.
"Regeneration in Southwark is now in total chaos, with an Executive totally out of their depth, the director of major projects resigning, and still no deal on the table. There has been a massive lack of political leadership, and this failure rests firmly with the Leader of the Council, who has so far dodged any accountability, instead blamed everyone else, but still delivered nothing, and just the promise of more dither and more delays."