Goldman Sachs's new “banking factory” headquarters in London is facing a possible legal challenge from the owners of neighbouring buildings - who claim the proposed office will steal their light.
The US investment bank is pushing ahead with plans to build a glass-fronted 850,000 sq ft office on a site on Farringdon Street in the City, just around the corner from its current HQ in Fleet Street. The plans involve demolishing two unoccupied buildings.
But it has now emerged that two of the UK's largest pension fund managers - which own properties either side of the redevelopment - claim that Goldman's proposals would affect their “right to light”.
Aberdeen Asset Management and Royal London Asset Management (RLAM) are demanding compensation for the loss of illumination - and could take legal action if they are not satisfied with the final sum offered.
Following mediation with the City of London planning authorities, Goldman offered to pay £1.2m to each of the two firms to compensate their loss of light, Estates Gazette property magazine reported.
This is more than Goldman had originally offered, but less than the pension funds are demanding.
To solve the stand-off, a City of London planning officer has proposed deploying “Section 237” powers that would see the City buy a temporary stake in the scheme and dictate a settlement, effectively forcing the pension funds to accept the sum offered.
The City's planning and transport committee was due to vote on whether to make use of these Section 237 powers, but a decision was delayed until next month.
If the parties involved cannot reach a decision in the interim regarding the proposals then the vote will take place on October 14.
Should the committee agree to back the City planning officer's recommendation and invoke section 237 powers, Estates Gazette reported that both firms expect to take legal action in an attempt to block the move.
Aberdeen and RLAM issued a joint statement saying: “The underlying owners of these buildings - pension funds, insurance policyholders and other investors - need to be adequately and appropriately compensated. Aberdeen and Royal London are acting in the best interests of their clients and hope a commercial settlement fair to all parties can be agreed.”
Goldman Sachs declined to comment.
The City of London's enthusiasm for the proposed development comes as it battles to prevent financial institutions moving to new skyscrapers in the east of the capital. Several investment banks, such as Barclays and HSBC, have left the City for bigger premises in Canary Wharf in recent years.
Goldman's plans to redevelop the site previously hit a stumbling block in 2011 when the Government granted protected status to murals on one of the buildings due to be demolished. Goldman was subsequently given permission to move the murals.Reuse content