4.7 The justification for Section 2, like that for the whole Link, depends on wider benefits, in particular regeneration benefits. Given this dependency, we examined progress to date.
4.8 The Department expects regeneration benefits to arise in areas through which Section 2 passes, particularly in the Thames Gateway and areas surrounding the three international stations at St Pancras, Stratford and Ebbsfleet. While project-related property developments are in their early stages, there are encouraging developments to indicate that the schemes will go forward.
4.9 LCR formed partnerships with development partners: Chelsfield21 and Stanhope are initiating a £3,000 million investment programme at Stratford; Argent is undertaking a £2,500 million development at Kings Cross; and Land Securities is investing £3,000 million at Ebbsfleet. LCR estimate that £8,000 million to £9,000 million of additional private sector capital is planned to be invested in developments at Ebbsfleet and on LCR's development lands over the ten to twelve year period following the completion of Section 2.
4.10 As a result of LCR's position as land-owner and developer of the railway project, LCR has developed long-standing and key relationships with local authority planning officials, and other Government agencies and stake-holders. LCR's principal role in its development partnerships has been to use these relationships to facilitate the submission and approval of the development schemes for Stratford and King's Cross which meet the development objectives of the local authorities and other stakeholders as well as the development ambitions of its development partners.
4.11 LCR's Master Planning Application for Stratford City has been approved by Newham Council, the Mayor of London and the Office of the Deputy Prime Minister. Detailed planning applications are being prepared and LCR expects that construction will commence in 2006. In June 2004, LCR submitted the Master Planning Application for the development at King's Cross to the London Boroughs of Camden and Islington for approval. The consultation phase has been completed and negotiations with the Boroughs began in May 2004. In March 2005, the London Borough of Camden gave planning consent for the £150 million redevelopment of the St Pancras Chambers (the former Midland Grand Hotel), a Grade 1 listed building at the St Pancras terminus, which had fallen into disuse since the early 1980s. Given the location of the St Pancras Chambers, at the gateway of the wider King's Cross development, LCR regards development of this site as particularly important and a catalyst for the wider regeneration scheme. Outline consent has been obtained for the development at Ebbsfleet.
4.12 The construction of the Link appears to be bringing about the development on brown-field land that, without the Link, had low, if any value and would have required significant investment in infrastructure to enable development to take place. In the case of the Stratford City and Ebbsfleet developments, the associated regeneration falls within the Thames Gateway, an area high on the Government's priority list for regeneration.
4.13 Regeneration benefits from the developments will bring new local job opportunities. If the developments are profitable, LCR and the Department will benefit financially with a corresponding reduction in the call required under the access charge loan facility. The Department transferred to LCR, the Department's rights to a share of any surplus profit earned by Land Securities from the development of the Ebbsfleet site as part of the original 1996 arrangements. Under the same arrangements, the Department will receive a 50 per cent share of LCR's profit after development costs for both the Stratford and King's Cross schemes.
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21 Chelsfield's interests in the partnership have since been acquired by Westfield and Multiplex.