Elephant & Castle Shopping Centre redevelopment to be delayed indefinitely

On Tuesday night Southwark Council's executive is expected to agree heads of terms with Lend Lease Europe for the redevelopment of the Heygate Estate site at Elephant & Castle.

The council's current exclusivity arrangement with Lend Lease Europe expires at the end of this month, but the executive is expected to authorise chief executive Annie Shepperd to sign a heads of terms agreement and extend the exclusivity deal indefinitely.

Southwark began exclusive negotiations with Lend Lease in July 2007, but talks were suspended in January 2008 due to the economic downturn. The exclusivity deal was extended in July 2008 and July 2009.

Demolition of parts of the Heygate could begin as soon as February 2010, even before the final regeneration agreement with Lend Lease has been signed.

However the council has postponed the redevelopment of the crumbling Elephant & Castle Shopping Centre.

The council blames Boris Johnson's new London View Management Framework, which will thwart plans for high-rise development visible from the Serpentine Bridge in Hyde Park. The Elephant & Castle Shopping Centre site falls within this viewing corridor.

Last month we reported the council's concerns about the Mayor of London's policy. The council warns that the changes to the LVMF "could have significant impact on the quantum of development and therefore viability".

Council officers believe that this policy will have the effect of capping the height of new development at the Elephant's northern roundabout to just 65 metres.

The council also says that "the economic downturn ... has had a significant impact on commercial retail development with potential impact on value of over 40 per cent" and continuing negotiations with Transport for London to find an integrated transport solution which is affordable have also hampered progress on this site.

The council says that redevelopment of the shopping centre, which is due to be replaced with an open-air pedestrian boulevard linking with the Walworth Road, "will be brought forward as soon as practically possible".

"This new deal with Lend Lease amounts to little more than throwing Heygate residents out of their homes and building new luxury housing which they won't be able to afford," says Cllr Peter John, leader of the Labour group. "What are tenants and residents getting out of it? The Lib Dems are selling Elephant & Castle short and betraying the existing community.

"Demolishing the shopping centre and removing the roundabouts and underpasses is absolutely central to starting a new chapter for Elephant & Castle, but this new deal put those plans on ice. It doesn't even include an indication of when the Lib Dems expect the core of Elephant & Castle to be transformed.

"Leisure facilities which made up such a central part of the original deal aren't even mentioned in this new deal, and neither is the new school, library or Northern line station which were also promised."

Before any development can take place Lend Lease and the council will have to reach agreement with St Modwen, the owners of the shopping centre and Hannibal House.

When the shopping centre celebrated its 40th anniversary in 2005 few thought that the building would survive another decade. Now the chances of a 50th birthday cake being served up in 2015 seem rather stronger.

New shops are continuing to open in the centre: Clarks factory shop is soon to arrive in the former Woolworths unit and a new Polish restaurant is also planned.