Urban Regeneration and SocialUrban Regeneration and SocialUrban Regeneration and Social Urban Regeneration and Social Sustainability WorkshopSustainability Workshop

Socially Responsible Investment andSocially Responsible Investment andSocially Responsible Investment and Socially Responsible Investment and Blueprint / IglooBlueprint / Igloo

Nick EbbsNick Ebbs

What is Blueprint?What is Blueprint?What is Blueprint?What is Blueprint?

• Many labels – PPP, LABV, a developer, a regenerator, a “fruitful way forward’’……

• In simple terms we are a Developer and Funder of regeneration but• In simple terms we are a Developer and Funder of regeneration but different and distinctive

A different structure

A different remit

A different approach

Th Bl i t St tTh Bl i t St tThe Blueprint StructureThe Blueprint Structure

A Li it d P t hi hi h f d i M 2005• A Limited Partnership which formed in May 2005

• Igloo, emda, Homes and Communities Agency (HCA) as shareholders

• emda is one of 9 Regional Development Agencies and has a remit to• emda is one of 9 Regional Development Agencies and has a remit to enhance the economic base of the East Midlands

• HCA is a new national agency launched December 2008

• HCA’s principle remit is to lead on the delivery of homes and regeneration in England

The Blueprint StructureThe Blueprint StructureThe Blueprint StructureThe Blueprint Structure

• Igloo “the world’s first socially responsible real estate fund” (United Nations)

• Within structure - investment ownership risk profit and control are• Within structure investment, ownership, risk, profit and control are all shared 50 / 50

• Vehicle has a 10 year life and performance assessed over 10 years

• Governed by Board of 4 directors representing each partner’s interests

The Blueprint StructureThe Blueprint StructureThe Blueprint StructureThe Blueprint Structureemda (50%) HCA (50%)

“emEP Ltd”50% vote

igloo50% vote

Partners

Shareholders

blueprint GeneralPartner emda HCA igloo

Partners

Blueprint Limited Partnership

Funding StructureFunding StructureFunding StructureFunding Structure

• Funded by a mix of equity and debt

• Public sector contributed property assets (buildings / sites) and some cash as equity (non interest bearing and unsecured)

P i t t t ib t d “ h t h”• Private sector contributed a “cash match”

• emda also made a loan comprising income producing assets (rent roll c.£2.0m and value £25 m) which repaid quarterly and on which ) p q yinterest paid.

• Additional equity subsequently invested on pro-rata basis (so far £33m total equity and £14 5m Debt)£33m total equity and £14.5m Debt)

The Blueprint RemitThe Blueprint RemitThe Blueprint RemitThe Blueprint Remit

• Two facets – financial return and public good

• Help emda / Homes and Communities Agency, and their associated stakeholders to deliver their Core Objectivesstakeholders to deliver their Core Objectives

• Set up to help address imperfections in the regeneration market but not complete market failure

• Focus on projects where the mainstream private sector might struggle to deliver desired outcomes

• Concentration on the six Urban Priority Areas within the East Midlands• Concentration on the six Urban Priority Areas within the East Midlands

The Blueprint ApproachThe Blueprint ApproachThe Blueprint ApproachThe Blueprint Approach• All Blueprint activity shaped by a unique Socially Responsible

Investment (SRI) policy derived from igloo’s policy

• Four principle themes: -

Regeneration

Environmental Sustainability

Design

Health, Happiness and well-being

• Primary Focus is areas in need of renewal where sustained investment over time can drive transformational changeover time can drive transformational change

A Powerful New ToolA Powerful New ToolA Powerful New ToolA Powerful New ToolBenefits for Public Sector Partners Benefits for Public Sector Partners

• Brings substantial new resources to the Region (New equity and capacity to borrow money)

• Creates a vehicle dedicated to regeneration and public sectorCreates a vehicle dedicated to regeneration and public sector priorities

• Has concentrated geographical focus

• Public Sector retain influence and ultimately control (dead locked vehicle)

• Public sector share in upside with profit share• Public sector share in upside with profit share

A Powerful New ToolA Powerful New ToolBenefits for Public Sector Partners cont..Benefits for Public Sector Partners cont..

• Risk is shared so scope for bolder and more holistic solutions

• Long term view so avoid need for short term compromise. Partners committed for ten years and financial performance isPartners committed for ten years and financial performance is assessed against projected outurn at end of vehicle’s life

• Stakeholders can have early access to expertise from trusted partnerpartner

• Private skills in finance and development management

A Powerful New ToolA Powerful New ToolBenefits for Private Sector PartnersBenefits for Private Sector Partners

• Provides access to development opportunities and assets to p ppwhich they can add value

• Prospect of more effective and quicker resolution of challenges

b ld l h d d h f l• Scope to build long term partnership and expand the portfolio

• Better understanding of Public Sector priorities and processes

Flow of new opportunities in which to invest• Flow of new opportunities in which to invest

• Possibility of enhanced returns over the long term as a result of concentrated effort, investment and partnership working.

Preconditions for SuccessPreconditions for Success

• Genuine alignment of interest between Public and Private SectorsSectors

• Assets introduced must have real potential for value creation

• Need appropriate scale given complexity and cost ofNeed appropriate scale given complexity and cost of establishment

• To deliver optimum results you need full commitment from partners at all organisational levelspartners at all organisational levels

Some LimitationsSome Limitations

• Not immune to the credit crunch but more bankable than most

• Focus on areas of market failure which are inherently difficult

• By definition, most projects require some degree of public sector support but interventions at the levels required cannotsector support but interventions at the levels required cannot be made within existing rules and protocols

• Ten years is a short timescale especially given the cyclical nature of property marketsnature of property markets

• Even in the good times only a limited number of private sector investors willing to commit to PPP structures

as a Metric to Assess Activityas a Metric to Assess ActivityFour Themes Four Themes –– Regeneration/Environmental Sustainability/Regeneration/Environmental Sustainability/

Design/Health happiness and Well BeingDesign/Health happiness and Well Being

• Separate criteria for each theme

• Policy gives guidance on how to assess and exemplars for best practice

• Four stage assessment process with independent assessors and some self assessment

• Independent Audit Committee chaired by Jonathan Porritt• Independent Audit Committee chaired by Jonathan Porritt

• Scoring for each criteria based on five benchmarks ranging from Bad Practice to Exemplar Practice

as a Metric to Assess Activityas a Metric to Assess ActivityRegenerationRegeneration

• Location and connectivity

• Contextual analysis

• Stakeholder engagement

• Neighbourhoods and liveability

• Community and stewardship

• Economic diversity and independence

as a Metric to Assess Activityas a Metric to Assess Activity

• Energy systems

Environmental SustainabilityEnvironmental Sustainability

• Car dependency

• Waste minimisation

• Food supply

• Construction process

• Water systems

as a Metric to Assess Activityas a Metric to Assess Activity

• Permeable street network

Urban DesignUrban Design

• Public realm and enclosure of space

• Mix of uses

• Quality, diversity and distinctiveness

• Biodiversity by design

as a Metric to Assess Activityas a Metric to Assess Activity

• Supporting healthy living

Health, Happiness and WellbeingHealth, Happiness and Wellbeing

pp g y g

• Creating opportunities for community

• Changing lives and realising potential

Story to dateStory to dated 200• Formed May 2005

• Significant public and private equity funding levered in (£17m HCA / emda and £17m Igloo) plus debt (£14.5m)./ g ) p ( )

• Team assembled and fully operational

• Good working relationships established with key stakeholders including URCs and Local Authorities

• Six projects underway with two under construction, two with a potential start in 2009 and two medium / longer termp / g

• Five additional projects in prospect

• Already committed to over £100m of development activity

So, what does it actually look like?So, what does it actually look like?

Site reclamation complete

Nottingham Science Park (as at 2006)

Nottingham Science Park (2008)

Hi hfi ld A t ti A d d N 1 N tti h S i P kHighfields Automotive Academy and No. 1 Nottingham Science Park(Two buildings and public realm completed August 2008)

St Georges, Leicester

Phase 1 – under construction

St Georges, Leicester

St Georges Leicester (Phase 1: Phoenix Square)St Georges, Leicester (Phase 1: Phoenix Square)(Art house cinema, space for creative industries, apartments)

Planning permission and site secured – Phase 1

Cathedral Quarter, Derby

C th d l Q t D b (Ph 1 l ti t S dl G t )Cathedral Quarter, Derby (Phase 1: elevations to Sadler Gate)(Mixed use retail office and residential)

Design Proposals Advanced

Green Street, Meadows, Nottingham

Green Street, Meadows, Nottingham (New eco-housing)

Option appraisalsOption appraisals

Wolsey IslandWolsey Island

Science Park

Wolsey Island and Leicester Science Park, Leicester

Wolsey Island, Leicester (Indicative proposal frontage site)

Indicative proposalsIndicative proposals

Leicester Science Park, Leicester

Masterplan complete – site assembly in progress

Pilot Area

Leicester Waterside, Leicester (Pilot area at centre)

L i t W t id L i t ( Pil t h N th t Ri id )Leicester Waterside, Leicester ( Pilot scheme – Northgate Riverside)(New residential neighbourhood with some mixed use)

Option appraisals – some site assemblyAlbany

SneintonSneinton Market

Extended Eastside, Nottingham (Sneinton Market and Albany

Sneinton Market (as could be) (Image - Barcelona)

Initial masterplan completed

Sneinton Market (as could be)(Mixed use, creative industries, retail and residential)

Extended Eastside, Nottingham (Proposals for Albany)(New housing)

Option Appraisals

Nunn Mills, Northampton (Feasibility studies)(Mixed use, housing, leisure and offices)