Select Committee on Public Accounts Second Report


Summary

When the Millennium Exhibition project was first conceived in the mid 1990s, the expectation was that at the end of its year of operation the Dome would be demolished or moved, and that the cleared site would be sold for redevelopment under an existing masterplan for the Greenwich Peninsula. In 1997, however, the incoming Government decided that the Millennium Experience should continue as a 'lasting legacy' in Greenwich. English Partnerships, the national regeneration agency which owned the site, and which was due to receive it back after the New Millennium Experience Company's occupation, was asked to find a sustainable long term use for the structure, recognising its status as an iconic building.

The initial competition to find a future use for the Millennium Dome began in March 1999, but failed to find a buyer able to complete the deal on acceptable terms. The main reasons behind the lack of success of this original competition were the complex nature of the competition process and the difficulty the Government faced in deriving sufficient confidence about the deliverability of innovative proposals from bidders.

The initial offer of the Dome in the first sale competition of 1999 to 2001 was not accompanied by extensive tracts of development land, because Ministers had asked English Partnerships to find a use for the Dome itself. It was assumed at the time that the Dome could be viable in isolation, without more than a parcel of adjacent land for ancillary facilities. English Partnerships already had a separate development plan in place for the rest of its land on the Greenwich Peninsula. And throughout the attempts to sell the Dome the vendors were reluctant to encourage bidders whose only interest was in the development land and who did not really want the Dome itself.

In March 2001 a second sale process was initiated. It followed a different approach in adopting limited competition, against a background of little market enthusiasm for a rerun of open competition, widespread doubts about the risks and costs of participation, and little specific interest in the Dome. The scale of the final deal expanded to include over 100 acres more land than had been explicitly offered. English Partnerships' active promotion of the opportunity to potential bidders had been focussed on the 68 acres beneath the Dome and its immediate surroundings, in line with government priorities. Some bidders realised that more land could in fact be available. As a result of this sale process, in June 2004 English Partnerships concluded a deal with Meridian Delta Ltd and the Anschutz Entertainment Group (Anschutz) for the redevelopment over 20 years of the whole northern Greenwich Peninsula, including reuse of the Dome. The deal is complex. It preserves the Dome in place until 2018, housing a large indoor arena and leisure complex, and provides for a major office development and some 10,000 new homes on the adjacent land.

On the basis of a Report by the Comptroller and Auditor General,[1] the Committee examined English Partnerships and its sponsorship department, the Office of the Deputy Prime Minister (the Department) on whether the best achievable deal had been negotiated, consistent with government policy to retain the Dome. In particular, we examined the way in which the opportunity to develop the Dome and surrounding land had been presented to the market, how the value for money to the taxpayer of the eventual deal with Meridian Delta was assessed, and how English Partnerships plans to manage this complex new joint venture to best advantage in the long term.



1   C&AG's Report, The regeneration of the Millennium Dome and associated land (HC 178, Session 2004-05)

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