Howick Place team agree to London mayor's cash demands after planning consent denied

Developers have caved in to London mayor Boris Johnson's cash-for-Crossrail demands, short-circuiting a potential legal challenge.

Doughty Hanson and Terrace Hill handed Johnson the £120,000 in order to get their Howick Place scheme off the ground.

Last week, Johnson refused planning permission for the first time after the duo declined to hand over the cash.

The U-turn strengthens the mayor's hand in requiring other central London developments to stump up the levy before planning consent is given.

Lawyers had previously questioned the legality of imposing the levy before the London plan had been formally altered to reflect the policy.

Lovells' head of planning, Michael Gallimore then said it was a “stark warning” that the mayor would not wait to make developers foot a share of the Crossrail bill. "The extent to which a direction to refuse on this basis can be justified legally is highly questionable."

Simon Turnbull, planning partner at law firm LG, said the developers would probably have won an appeal but probably did not want to risk the “cost, expense and delay.”

“A bird in the hand is worth two in the bush,” he said.

After trumpeting his success in gaining the contribution, a press release from the mayor appealed to developers' good nature: “I want to assure the capital's development sector that I am working with, not against them. We will continue to seek a financial contribution in respect of developments that fall within the new policy but will do so pragmatically and consider each case in the light of its individual circumstances.”

Developments involving a net increase in office floor space of more than 500m² in the Central Activities Zone and on the Isle of Dogs will be expected to make a contribution through the planning system