Wharf £700m project blocked

One of our members sent this gem from last week’s Sunday Times, in case you missed it.

The former Nissan UK director who spent 4 years in jail after being found guilty of one of Britain’s biggest tax frauds is blocking a £700m skyscraper development at Canary Wharf. Michael Hunt and fellow property investor, Michael Gross, own a ‘ransom strip’ – a piece of land vital to a project but not owned by its developer – at Heron Quays, east London.

They have demanded £25m each from Canary Wharf to sell it. The pair rejected an offer of £5m a piece for the land in December 2006. Since then, property prices have plummeted and they also rejected a reduced offer from Canary Wharf in January. Tower Hamlets council said at the start of the year that it would issue proceedings to carry out a compulsory purchase of the land from Hunt and Gross to enable the 1.25m sq ft office scheme, designed by Lord Rogers, to go ahead. But the two men challenged the council and an independent government adjudicator will now decide the outcome.

Hunt and Gross would probably receive £1.25m – £1.5m each if the compulsory purchase goes ahead. The pair own 2 out of 16 industrial buildings that occupy the proposed development site, but they have no development rights. Canary Wharf has spent 9 years assembling the land for the scheme.

At an inquiry into the project last week, Gross admitted the joint £50m that he and Hunt were seeking was a ‘shot in the dark’ figure that they decided on as they waited for a lift on the way to their first meeting with George Jacobescu, Canary Wharf’s chief executive.

From Sunday Times Business, 15 Nov 2009 (Jenny Davey)