News Walthamstow

Multi-million profit from town centre tower evaporates

The Juniper House project is now expected to cost the council more than half a million pounds

By Victoria Munro

An impression of the finished Juniper House tower (credit: WF Council)

The multi-million pound profit expected from a 17-storey tower being built on council land in Walthamstow town centre has evaporated, a new report reveals.

Plans to build 91 flats and a new nursery on the Juniper House site in Hoe Street, directly opposite Walthamstow Central Station, were agreed in June 2019, with construction expected to finish in 2021.

The council originally expected the income from the new flats, 50 of which will be sold on the private market, to provide a profit of £2.6million, which it planned to invest in the flats being built around the town hall.

However, a report prepared for a private meeting of council leaders next week shows the project has since become approximately £4m more expensive than the £37.7m budget agreed four years ago.

While the difference is partially offset by an increase in the predicted market value of the new flats, the project is now expected to lose £562,000, which the council will have to borrow.

The report reveals that nearly half of the increase is due to the tower’s construction company, Hill Partnerships Ltd, demanding an extra £1.8m from the council “due to Covid-19 and other cost increases”.

The company originally agreed to charge around £30.1m for the project but, in negotiations that began in August last year, demanded a 6% increase because of “significant cost inflation to both materials and labour” caused by “global and national market conditions”. 

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The report notes that failing to agree a “satisfactory” sum with Hill Partnerships and insisting on the previously agreed amount could lead to a legal battle with the company, “which would, in all likelihood, [be] prejudicial to a successful project outcome and [result in] higher costs”.

The remaining £2.1m increase comes from other development costs on the council’s side, such as consultancy fees, charges from third parties like Network Rail, expected fees for estate agents and other unspecified staff costs. 

The report notes that the need to borrow money to finance the project will cause “a £95k pressure to the [council’s] general fund for the foreseeable future”, as well as having ramifications on the town hall development that were not made public. 

Thankfully, some income is also expected from leasing commercial space in the new tower. While at least part of the space will be home to the promised nursery, one unit will house the borough’s first ever university campus.

Plans to open a University of Portsmouth (UoP) campus in Waltham Forest were revealed in 2021, after more than a year of private talks between the university and the council.

While it appeared at the start of last year that the campus would occupy Central House a few doors down, UoP has now agreed to lease space in Juniper House for the next 15 years.

The report adds that the opening of the new campus “will provide an important landmark for the whole community” and “has the potential” to contribute £9.2m to the local economy long-term.

As per the original plan for the building, Central House will likely instead be redeveloped into a block of at least 60 flats with office space.

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