Models of regeneration delivery delivery

## What Is The Scale Of The Problem?

Regeneration Funding Requirement………….
 Total Value of commercial, residential, 
other property stock in the UK
£4,500bn
 Regeneration areas, @ 10%*
£450bn
 Depreciation of stock @ say 5% pa and 
that's before catch up!
£22.5bn pa

- Therefore, its beyond the public or private sectors alone…..and anyway, 
what's the upside?
* Broadly based on analysis of Deprivation Index.  Reduction in EC Assisted Area status will in part be mitigates by Growth Area status.

## Local Authority Context

- Deficit Reduction - Regeneration - 'Proactive versus Reactive' - Area wide regeneration - Asset Management
- Efficiency Agenda (Use of Resources) - Public sector collaboration - New ways of working - New models of delivery - Localism agenda

## The New Frontier

- Changing financial / economic environment
- Grant funding - Debt finance
- Development in London
- London house price strength
- Changing policy context
- Localism, mayoral powers - General power of competency - Efficiency Agenda - Area wide regneration
Always been a need for public : private working - but how it takes place is changing

## Development Value Engineering What Does The Private Sector Do? Value

•
Priced development risk - 'flex' 1. Planning Certainty 2. Occupation / Users 3. Ground Conditions
4. Funding 5. Land assembly
•
Cashflow 1. Land drawdown 2. Finance costs
How can a Council achieve these for its regeneration sites? 

## Emerging Delivery Structures The Labv The Labv Bad The Libv - A New Labv!

LIBV - a new LABV!

Good The

## Co-Investment Fund Co-Investment Fund

Good The

## Esco / Muscos Esco / Musco Partnership Esco / Musco Partnership

Good The

## Return Differentiation Model Return Differentiation Model Tax Increment Financing Tifs

- Lessons from the USA - Economic Development 'Menu'
- Multiple tax revenue base, grants, social 
investment programmes
- Longevity - 23 years life (plus 12 yr extension) 
- Alternate Revenue Bonds - with and without 
enhancement 
- Pay-as-you-go
- '**But For'** - financial need
- Chicago Experience
- 143 TIFs = 30% City acreage (2003) - Annual increment in 2002 - £143m 
- Ration of Private to TIF funds ($) 6.35:1 - City limits public involvement to 25% of project 
cost 

## The Uk Tif Opportunity

- Legislation in time for EZs? - The need is now 
- pilots are about a longer term 
solution
- A private sector TIF model? - Are the schemes LA wants 
commercially viable?
- Is there real additionality? - Is there consensus on objectives (over medium/ long term)?

## How Chicago Uses Tif Funds Tax Increment Financing

Good The

## Summary

- Different structures for different needs - form must follow function
- What's Good for some are Bad for others! - Public private joint risk sharing essential - Just because its ugly doesn't mean its bad

## Jones Lang Lasalle Capability

We'd be delighted to assist you with structuring regeneration solutions for your real estate assets.  Please feel free to contact us.

Andrew Hume Director 020 7399 5769 andrew.hume@eu.jll.com

## Quick Fire Questions

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