Urban Regeneration and Social Urban Regeneration and Social Urban Regeneration and Social Urban Regeneration and Social Sustainability Workshop Sustainability Workshop Socially Responsible I nvestment and Socially Responsible I nvestment and Socially Responsible I nvestment and Socially Responsible I nvestment and Blueprint / I gloo Blueprint / I gloo Nick Ebbs Nick 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 Th The Blueprint Structure The Blueprint Structure Bl Bl i t St i t St t t • A Li A Limited Partnership which formed in May 2005 it d P t hi hi h f d i M 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 Structure The Blueprint Structure The Blueprint Structure The 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 Structure The Blueprint Structure The Blueprint Structure The Blueprint Structure emda (50%) HCA (50%) Shareholders “emEP Ltd” igloo 50% vote 50% vote Partners Partners blueprint General emda HCA igloo Partner Blueprint Limited Partnership
Funding Structure Funding Structure Funding Structure Funding 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) • Private sector contributed a “cash match” P i t t t ib t d “ h t h” • 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 y interest 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 Remit The Blueprint Remit The Blueprint Remit The Blueprint Remit • Two facets – financial return and public good • Help emda / Homes and Communities Agency, and their associated stakeholders to deliver their Core Objectives stakeholders 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 Approach The Blueprint Approach The Blueprint Approach The 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 change over time can drive transformational change
A Powerful New Tool A Powerful New Tool A Powerful New Tool A Powerful New Tool Benefits 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 sector Creates 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 Tool A Powerful New Tool Benefits 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 is Partners 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 partner partner • Private skills in finance and development management
A Powerful New Tool A Powerful New Tool Benefits for Private Sector Partners Benefits for Private Sector Partners • Provides access to development opportunities and assets to p pp which they can add value • Prospect of more effective and quicker resolution of challenges • Scope to build long term partnership and expand the portfolio b ld l h d d h f l • 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 Success Preconditions for Success • Genuine alignment of interest between Public and Private Sectors Sectors • Assets introduced must have real potential for value creation • Need appropriate scale given complexity and cost of Need appropriate scale given complexity and cost of establishment • To deliver optimum results you need full commitment from partners at all organisational levels partners at all organisational levels
Some Limitations Some 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 cannot sector 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 markets nature 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 Activity as a Metric to Assess Activity Four Themes Four Themes – – Regeneration/Environmental Sustainability/ Regeneration/Environmental Sustainability/ Design/Health happiness and Well Being Design/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 Activity as a Metric to Assess Activity Regeneration Regeneration • Location and connectivity • Contextual analysis • Stakeholder engagement • Neighbourhoods and liveability • Community and stewardship • Economic diversity and independence
as a Metric to Assess Activity as a Metric to Assess Activity Environmental Sustainability Environmental Sustainability • Energy systems • Car dependency • Waste minimisation • Food supply • Construction process • Water systems
as a Metric to Assess Activity as a Metric to Assess Activity Urban Design Urban Design • Permeable street network • Public realm and enclosure of space • Mix of uses • Quality, diversity and distinctiveness • Biodiversity by design
as a Metric to Assess Activity as a Metric to Assess Activity Health, Happiness and Wellbeing Health, Happiness and Wellbeing • Supporting healthy living pp g y g • Creating opportunities for community • Changing lives and realising potential
Story to date Story to date • Formed May 2005 d 200 • 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 term p / 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)
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