Why small may be best for the Square Mile

THE MONDAY INTERVIEW michael cassidy
Click to follow
The Independent Online
For Michael Cassidy, the run-down state of Wall Street at the southern end of Manhattan is a powerful justification for the City Corporation's outspoken campaign to keep banks and securities firms inside the Square Mile and persuade them against going east to Docklands.

"If Wall Street had its own borough council, it might not be in the desperate state it is now, with one third of the buildings empty," says the chairman of the City's policy and resources committee, who is the nearest the corporation has to what other less gilded and ancient local authorities would call leader of the council.

Mr Cassidy believes the financial industry in New York is now so widely dispersed to the fringes that it has lost the benefits of concentration, which London still has. A geographically small centre is best at maintaining a vibrant and skilled jobs market.

And he says that, despite the advent of electronic dealing, there is still an important advantage in being able to visit a large number of colleagues and clients in a short space of time at a reasonable distance. "In Tokyo, it is almost impossible to get from one large player to another in the course of a working day," says Mr Cassidy.

These firm beliefs in the merits of the Square Mile and the dangers to London as a whole of losing financial businesses to peripheral areas have led to a simmering row with Docklands that exploded earlier this month when BZW, the Barclays subsidiary, announced it was moving 1,800 staff to Canary Wharf.

Mr Cassidy, an apparently mild-mannered senior partner of a firm of solicitors specialising in pensions investment law, hit the roof. He claimed BZW would lose 40 per cent of its staff as a result of the move, said the £1,000 a year compensation staff would receive was the equivalent of £5 a square foot on the rent and gave BZW, which is owned by Barclays, a bleak warning that in the long run Canary Wharf would prove no cheaper than the City.

Hot stuff from a corporation that lives much of its time in a world of tradition and discretion. Mr Cassidy certainly did not make himself popular with BZW, and got stiff letters of rebuke from the London Docklands Development Corporation. He blames his decision to go public at least in part on what he calls the aggressive public relations of the Canary Wharf development on the Isle of Dogs, whose boss, Sir Peter Levene, claimed that BZW was about to get a new building at half the cost in the City. "I had to respond," says Mr Cassidy.

But the public spat also prompted a rapprochement. A meeting took place between Mr Cassidy and Sir Peter last Thursday aimed at defusing the row by setting new ground rules for the relationship between Docklands and the City.

The hope appears to be to put an end to the public brickbats and poaching of tenants.

Observers of the City's inner workings also detect other forces at work. Sir Peter is a senior figure within the corporation and is up for election as sheriff in mid-1996. Normally, the sheriff is next in line for the gold chains of the office of Lord Mayor.

To complicate the politics still further, there is a possibility that the City Corporation could end up with a much closer involvement with Docklands itself, when the LDDC is broken up in 1998. Canary Wharf would be shared between the boroughs of Tower Hamlets and Newham.

Mr Cassidy says: "These boroughs don't have a track record of managing a financial complex as big as that. It is entirely possible that we as a corporation might be asked to help." He envisages a role rather like a managing agent.

Mr Cassidy refutes suggestions that the mayoral succession lies behind the peace overtures. Certainly, the gradual improvement in the business prospects of Canary Wharf and the fact that BZW has snapped up the last large trading floor are likely to lead to a natural easing of tension, since there is rather less to fight over.

Mr Cassidy is convinced that if the other large organisation currently looking for a big new trading floor, the London International Financial Futures Exchange, went east, it would have to look at building anew on one of Canary Wharf's vacant plots, which would level the cost comparisons with the City.

Mr Cassidy also used the row over Canary Wharf to attack the widely- held view that there are not enough sites to build large new offices in the City. "My primary purpose was to kick-start a City development market that was in the doldrums and counter the impression that the City is full and cannot accommodate large users of space," he says.

Perhaps surprisingly, in the wake of the recent office property slump there is a shortage of buildings able to accommodate big dealing floors.

Yet 9 million square feet of potential office space is awaiting redevelopment and already has planning permission and there are 20 potential development sites of sufficient area to meet the needs of large financial companies.

Mr Cassidy last week set up a new City Property Forum that will examine in detail the constraints on office development. He has pinpointed one difficulty: it is hard to amalgamate adjacent development sites withplanning permission into bigger units that meet tenants' needs. In many cases, this is because structures on one of the sites are listed by English Heritage, whose chief executive, Chris Green, has been invited onto the new forum. "It is essential to have English Heritage on side," says Mr Cassidy.

This is not the first of Mr Cassidy's campaigns. He has battled Smithfield butchers over the refurbishment of the meat market, Barbican tenants over the enormous Alban Gate office development and been a leading force in the security measures developed after the IRA bombs, which have cut conventional crime by a third and almost halved traffic accidents.

He is also beginning a controversial attempt to convince the corporation itself to give up its centuries-old fixation with the long-term ownership of City freeholds. And the corporation is about to announce a huge new charity using funds accumulated over hundreds of years to maintain the City's four bridges. The £10m a year this produces is far more than can be spent on the bridges themselves. Agreement has been reached to spend the surplus on a range of charities throughout Greater London.

Perhaps Mr Cassidy's most important issue of all is to persuade the Labour Party to drop its pledge at the last election to abolish the corporation, a campaign he believes is all but won. The key, perhaps, is what the corporation does with its power and money. "It is less likely a future Labour government would abolish us if we are being useful," says Mr Cassidy.

Comments