High Court hearing on the redevelopment row could have long-term impact for retailers
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Michael Gove has been accused of “misinterpreting” planning rules by Marks & Spencer as a row over the redevelopment of its Marble Arch store heats up.
On Tuesday M&S will begin its High Court battle against the Government over the Housing Secretary’s decision to block a multimillion-pound revamp of its Art Deco Oxford Street department store.
The legal challenge centres on claims that Gove “misinterpreted and wrongly applied planning policy”. The Housing Secretary stands accused of taking an inconsistent approach to planning decisions, seeding confusion over what developers need to do to get the green light for projects.
The case will be watched closely: Gove’s decision to intervene in the Marble Arch redevelopment has “cast a dark shadow on commercial development projects,” according to Robert Gowing, a senior planning associate at Hogan Lovells.
“Prospective developers are faced with real uncertainty as to what information is needed to justify redevelopment proposals,” he says.
Across the country, projects have been put on hold as developers await the outcome of the M&S case.
Uncertainty has gripped the sector in part because the Marble Arch redevelopment had broad based support. The scheme had the backing of the council, the Mayor of London and an independent inspector, as well as neighbouring businesses.
Marks & Spencer had put forward plans to demolish its Marble Arch store and build a new structure up to the latest environmental standards. The company argued that the building’s age – construction began in 1929 – and its warren-like layout made it unsuitable for refurbishment, meaning a full rebuild was the only option.
However, Mr Gove claimed that knocking down the building and replacing it with a new 10-storey complex would “fail to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings”.
Campaigners have pointed to the nearby redevelopment of the former Topshop store at Oxford Circus by Ikea. The Swedish furniture giant is in the process of upgrading the building to turn it into a new central London flagship.
It suggests older buildings can be renewed, although last year Ikea was forced to delay the site’s opening because the refurbishments needed were more intensive than first thought.
In the meantime, uncertainty has hit the property sector as companies struggle to work out what Gove’s M&S intervention may mean for their projects.
Adding to the confusion are more recent decisions. Last week the Housing Secretary approved plans to demolish ITV’s former headquarters on the South Bank in London and build a £400m office complex. Critics claimed the project would generate more carbon emissions than if the 4,000 office workers the new development will house were to drive in from Surrey for 30 years.
On Monday, M&S executive Sacha Berendji said: “When our proposal to bring one of London’s most sustainable and energy efficient buildings into the heart of the West End is rejected and other schemes with lower sustainability benefits are going ahead, it makes it impossible for developers to interpret planning policy, freezing investment and leading many to ask ‘why bother’.”
M&S has said it will be forced to review its future on Oxford Street unless it is allowed to demolish and rebuild its Marble Arch site. It has warned that the row risks worsening the condition of Oxford Street, which is struggling with rising crime and has been overrun by US candy stores in recent years.
However, the implications of the case stretch much further than London’s West End. Property bosses say the row has become a “lightning rod” for the ongoing debate over how the industry should approach sustainability.
Alistair Watson, a partner at Taylor Wessing, says: “There is a general confusion which has to be cleared up. Every scheme is different, but the basic principles about demolition first or repurposing the building, that’s what this case can help us establish what we need to do.”
Charles Begley, chief executive of the London Property Alliance, which represents 400 real estate developers and investors, said: “Without additional guidance and standardisation to help understand the full picture, as well as long term impact locally, councils and communities have been left in an invidious position to try and work it all out, with conflicting messaging from national government further confusing the issue.”
Gowing agrees that more clarity is needed on “how decision makers at all levels will evaluate evidence for the carbon impact of demolition versus retrofitting”.
All this confusion risks exacerbating the decline of high streets across the country. Estimates from the British Retail Consortium suggest that six thousand shops have closed their doors in the last five years.
Earlier this year, retail chiefs told The Telegraph that many locations across the UK were at risk of becoming “wastelands” because of a lack of incentives for retailers to invest.
Richard Pennycook, the former Co-op chief who co-chairs the British Retail Council, said planning issues were a crucial roadblock to regenerating towns. The problems afflicting Oxford Street are also happening elsewhere across the country.
The Government has committed £13bn to levelling up, including regenerating town centres and high streets, local transport and cultural and heritage assets.
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