WALTHAMSTOW: Arcade site developer records huge loss (From East London and West Essex Guardian Series)

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WALTHAMSTOW: Arcade site developer records huge loss

8:29am Wednesday 23rd July 2008

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By Carl Brown »

THE company due to redevelop the Arcade site in Walthamstow has made a loss of £20m in just six months - potentially putting the scheme in jeopardy.

The site, on the corner of Hoe Street and High Street, has been vacant for years, and is due to be redeveloped by St Modwen PLC.

Early plans for the proposed multi-million pound complex include an 18-storey tower, a two-floor Primark, a cinema and homes.

But the long-awaited plan may be postponed because of St Modwen's financial difficulties, which it says have been caused by the unexpected steep decline in the housing market.

The company has announced a pre-tax loss of £20m for the period to May 31, and its share prices have plummeted in the same period.

And now the Walthamstow scheme is being reviewed - meaning the submission of a planning application may be delayed indefinitely.

St Modwen regional director Tim Seddon said the property market is facing its toughest period since 1990.

He said: "However, St Modwen's marshalling, development, asset management and cost reduction programmes will enable us to mitigate the worst of adverse market conditions and we will continue to demonstrate our ability to add value even in challenging circumstances.

"In addition, St Modwen's projects are, by their very nature, long term. It is often the case that markets will fluctuate over the lifespan of any given project and their timing and delivery is always managed accordingly.

"With regards to submitting the planning application for the Walthamstow town centre site, we are working with council officers and members to submit this as soon as possible having regard to the economic conditions."

The plans for the Arcade site have caused concern among some residents, who believe the tower would be too tall and that the Primark will drive smaller traders out of business.

In June a demonstration organised by campaign group Fight The Height saw protestors pelt tomatoes at effigies of a Primark store and tower blocks.

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Walthamster, Walthamstow says...
3:18pm Wed 23 Jul 08

What's the betting that Waltham Forest council lets the developer use this as an excuse to just build a rubbishy tower block with no amenities at all?

Ten years ago we were going to have a beautiful new library and other amenities on the arcade site, with the Granada cinema thriving next door and an arts centre in the old town-centre library.

Five years ago we were going to have a library and possibly sports centre on the arcade site, and the council was going to do a compulsory purchase on the closed Granada and sell it on to a cinema chain.

One year ago we were down to no Granada cinema, no arts centre, a shoddy makeover of the old library, and rabbit-hutch housing with a few amenities on the arcade site.

Now it'll be no amenities, just the unwanted tower block.

Ten years, enough money poured down the drain to have made Walthamstow the biggest attraction in East London, and what have we got to show for it?

Nothing.

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Ferdy50, Chingford says...
3:27pm Wed 23 Jul 08

This is getting ridiculous now.

Greenwich Council in South London decided to modernise Woolwich town centre because they were getting a DLR station. They had the plans in place ages ago & theyve been getting on with construction for months now.

The idiots we have in this council, still cant even decide what to put on the Arcade site. They should have left the arcade where it was & just modernised it.

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Dave Hall, Walthamstow says...
6:33pm Wed 23 Jul 08

One major problem is that Waltham Forest Council will be able to steamroller through any planning application that is made for this site. This development will make a major change to the centre of Walthamstow for years to come, long after this council has gone. The Liberal Democrats would be doing Walthamstow a big favour by pulling the plug on Labour, whose time is surely past here, as in most of London...

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mdj, e10 says...
10:35pm Wed 23 Jul 08

'Managing the timing and delivery of a project ..according to market conditions' is a weaselly way of saying: 'We can leave your town centre as a derelict bombsite for years if necessary until we can make a profit out of it'.
The important question is: has LBWF actually parted with the freehold yet, or is it all conditional on the planning approval? If they - that's WE, actually - still have the freehold we can tell these chancers where to go; if not, it's another triumph for the Cllr Wheeler School of Property Management, leaving us deprived of ownership of the prime site in the borough, as well as several million quid down the pan.
Can anyone comment who knows more about the inside details? This smells worse and worse, especially coupled with the adjacent story.

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Technomist, Walthamstow says...
10:57pm Wed 23 Jul 08

St Modwen may be allowing it to be spun that they have made losses, implying they are in trouble enough to put pressure on the council to wrest further concessions, but the stock market knows their prospects to be different: their share price has risen from just above £2.80 a share to over £3.40 in the last month.

I say we all just look them in the eye and wait for them to blink.

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Walthamster, Walthamstow says...
12:02am Thu 24 Jul 08

Too right, Ferdy50. The more the High Street is forced downmarket (more fried-chicken and pound shops, anyone?) the better the old arcade was in contrast. It only needed a bit of smartening up. It had plenty of real shops, and it was bringing in money.

The sale won't come anywhere near covering the many millions of pounds that the council has spent in more than a decade on blighting, demolishing and leaving it derelict.

Just down the road in Tottenham, a handsome new theatre and arts centre has just been built for about £11 million.

By the time our town-centre arcade site has been offloaded, it will have cost Waltham Forest more to DESTROY than it cost Haringey council to CREATE Tottenham's Bernie Grant centre.

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