King Alfred dream threatened (From The Argus)

King Alfred dream threatened

1:14pm Wednesday 30th July 2008

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The King Alfred development was last night hanging by a thread after its financial backer walked away.

Dutch Bank ING said the volatility of the money and property markets had forced it to pull out of what would have been Frank Gehry’s first major development in England.

Ted Kemble, Brighton and Hove City Council’s cabinet member for major projects, said he was very disappointed at the bank’s decision, which was revealed exclusively on The Argus website.

Josh Arghiros, the managing director of developer Karis, said he remained committed to the Hove seafront scheme and was in negotiations with two potential financiers, including a sovereign wealth fund.

He said: “We were obviously disappointed but we understand why ING has decided to pull out with the housing market as it is.

“We are now talking to other investors and we are having to look at how to make the scheme viable. They have an opportunity to invest in a scheme where most of the hard work is already done and £13 million has already been spent.

“We want to have Frank Gehry on board to amend the scheme and I think this could give us the opportunity to get the best of this.

“We now need to sit down with the council and discuss viability.

“We have lost many little battles along the way and we will not give up without a fight.”

Karis has until November to firm up alternative investors before the development agreement between the council and Karis Holdings, the company set up jointly by ING and Karis, ends.

ING Real Estate confirmed last night it had withdrawn its funding from Karis Holdings. Mr Arghiros said he would be buying ING’s share of the firm.

Guy Parker, the country manager of ING Real Estate for Development UK, said: “The volatility of the money markets, along with the escalating material and construction costs, and the downturn and uncertainty in the residential market, have had a major negative impact on viability of the scheme.

“It is with regret that we have decided to withdraw.”

Coun Kemble said: “At present Brighton and Hove City Council has a legal agreement, which includes ING, to deliver this scheme. That stands until November.

Karis is due to come back with an update on progress towards delivering it, which our cabinet will consider in September.

“In principle we still support getting excellent sports facilities on the site, which could also provide much-needed housing.

Because funding must come from private partners, the credit crunch could well cause a hiccup with schemes like the Brighton Centre and King Alfred. But that doesn’t change the long-term ambition to see the city’s most important schemes built.”

The King Alfred scheme, which was given planning permission in March last year, comprises 751 homes in 11 buildings, including two towers up to 98 metres high.

An £80 million sports centre, small shops, a police office, a GP surgery, cafes, restaurants and public spaces are part of the plans.

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