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TIF could unlock Nine Elms regeneration
Published: 2009-08-17 17:50:09
At Nine Elms developer Treasury Holdings UK, finance director Matthew Taylor revealed exclusively to SocInvest that "Tax Increment Financing could be what it takes to make this happen".
Covering more than 200 acres, Nine Elms includes Battersea Power Station in the largest un-regenerated site in the Greater London Authority area, and one of the biggest in Europe.
"The lack of transport infrastructure has been the main reason for the failure to regenerate the Nine Elms area," said Taylor. Neither Transport for London (TfL) nor government sources can fund the creation of the essential transport network required for the development to succeed.
Over the past 26 years, a succession of proposals for the area has come to nothing mainly because of the unresolved infrastructure issue. Taylor believes that TIF could hold the key to moving regeneration plans from the drawing board to the development stage.
"We employed PricewaterhouseCoopers (PwC) to look at funding options," he said. "We came up with three possibilities: development levies; incremental revenue share from TfL; and additionality funding through tax revenue streams through TIF." All are mutually compatible possibilities.
Discussions with local authorities have gone well, said Taylor. "As soon as (housing minister) John Healy sent out his letter from the Department for Communities and Local Government inviting pilot project schemes, it became very real. The Nine Elms proposal has been signed by (London mayor) Boris Johnson, (TfL commissioner) Peter Hendy and the leaders of Wandsworth and Lambeth councils."
While there is no guarantee that TIF will receive government blessing, Taylor believes that a strong case has been made for additionality – the argument that TIF-backed projects such as this would generate additional tax revenues rather than displacing rates from elsewhere. "If the government can become comfortable with this, then it's likely to find a way to do it," he said. "For Battersea Power Station this could prove the catalyst to regenerating a site that has lain dormant for 26 years."
Matthew Taylor speaks about the Nine Elms submission and the role of TIF at "Preparing for Tax Increment Financing and Accelerated Development Zones", 15th October 2009, London. For more information click here.