The commercial property industry may not have much in common with England footballer Wayne Rooney but they have both, in different ways, brought their own barnet into the headlines recently.
While the Manchester United striker is posting pictures of his new hair transplant on Twitter, Barnet Council intends to submit a bid to the government, permitting the use of Tax Incremental Financing (TIF) to help fund a new £4.5bn commercial property development in Brent Cross and Cricklewood.
TIF was introduced to us back in 2010 when Deputy Prime Minister Nick Clegg announced that it would be a way of addressing a commercial property chicken and egg scenario of what comes first – commercial property or investment. Popular in the US for more than fifty years, TIF allows councils to ‘forward-fund’ or borrow money against future business rate income – income dependent on the project being built. It came about after lobbying from the British Property Federation (BPF), which promoted it as a way of raising finance in today’s economic climate of cautious lending.
Barnet has phase one funding from developers Hammerson and Standard Life Investments but needs further money, which it hopes to raise from TIF, to realise the project, touted as the biggest development scheme in the history of north-west London. It involves an extensive infrastructure renewal, including a mixture of residential and commercial property, new schools, roads and a railway station.
Increased use of TIF is expected at the end of summer, once the government completes its review of the way local authorities are funded. Part of the review will examine whether councils should be permitted to retain business rates, which would increase revenue streams.
If that happens, analysts expect the behaviour of commercial property developers and public sector regeneration projects to mirror Wayne Rooney’s transplant – hair and scalp, drawn together, working together, stronger together.
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