Lion Plaza in the City of London is a fraction of the size of the Swiss Re tower, but it will take longer to build. We tell the story of a project that felt the weight of Murphy's law
Lion Plaza is a £65m medium-sized mixed-use development at the apex of Threadneedle Street and Old Broad Street, in the heart of the City of London. It was also a puzzle for everyone involved with it, from funder to construction manager, for reasons that will shortly be apparent. And it is a reassurance for anyone whose faith in Murphy's law has begun to wane: on this scheme just about everything that could go wrong, did.

One way of looking at Lion Plaza is to compare it with the landmark City project of recent years, the Swiss Re tower. Both will have taken about the same time to build, despite the fact that Swiss Re is a vastly bigger job.

The two projects started at about the same time, but Lion Plaza stumbled as soon as it left the blocks. The first problem was an old one: how to make a somewhat random collection of a dozen buildings into viable deep-plan offices without outraging English Heritage. Architects had been mulling that one over for six years without finding an acceptable compromise. In the end, the increasing dereliction of the buildings forced EH to give their blessing to a radical redevelopment of the area, in return for a retained facade – a quarter of a kilometre's worth.

The second problem was persuading a bank to part with any money for the job. Tenants for the 19,000 m2 commercial element proved hard to find, and there were doubts that shops that had taken some of the 6000 m2 of retail and leisure space, including Dixons and Starbucks, would set quite the right tone.

Then there was the developer: Lion Heart Properties was a subsidiary of Chemical Industries, a Singaporean company with debt and credit issues of its own. It had acquired the site in 1994, and had struggled since then to get things moving. It was not until October 2001, 15 months after work had started on site, that a German bank called Depfa offered a £130m loan.

By that time, the demolition work has been carried out and a decision had to be taken on the procurement route. Thorstone Land & Property, the development manager for Lion Heart, hemmed and hawed over going for a design-and-build solution, but eventually plumped for construction management. It duly appointed a firm called CPC, which had nursed the Halpern Partnership-designed scheme through planning.

Halpern's brief was to turn 12 buildings, eight of which were listed, into high quality office, retail and leisure space, while keeping 250 m of the buildings' original facades. The complexity of the design paled in comparison with the physical difficulty of working on a site whose neighbours include the Bank of England, the City Club and the Bank of Scotland; 16,000 people walked past its single entrance every hour. All of which makes CPC's description of the job as "the most complex speculative development under construction in the City of London" sound like masterly understatement. The demolition alone took about a year.

Then there was the complexity of the structure needed for the new elements – a mixture of bespoke steel frame and load-bearing masonry, which one team member argues is much more of a challenge than Skanska faced at Swiss Re.

There were lots of different forms to Lion Plaza’s structure. Swiss Re is like a huge piece of Meccano in comparison

Project team member

"It was a big one to put back up," he says.

"There were lots of different forms to the structure. Swiss Re is like a huge piece of Meccano in comparison."

Some London contractors questioned whether Thorstone had been wise to give CPC the construction manager's role. They pointed to the firm's background in project management, and suggested that it was hardly the job on which to perfect the construction manager's art. One member of the design team does admit that "they struggled a little bit" – adding that anybody would struggle to co-ordinate the design of a project of Lion Plaza's baroque complexity.

John Gidman, chief executive of CPC, was unavailable to comment on these points, but others defended the firm by pointing to the swift action it took to deal with the worst crisis to hit the project: the collapse of steel contractor Wescol. As soon as he heard the news, Gidman and eight members of the project team flew up to Halifax to secure £390,000-worth of undelivered steel. "CPC showed a degree of leadership that good construction managers should do," one team member says. "They were extremely pro-active. They didn't sit on their hands but pushed ahead."

Even so, insiders say, delays were inevitable.

"The scheme lost a bit of momentum," as one project source puts it. At present the team is pressing for an autumn handover. "It's all hands to the pump right now," one says.

Paradoxically, the economic consequences of the troubled construction process were ameliorated by the client's lack of success in attracting commercial tenants. The retail element had been boosted back in January 2002 by the decision of upmarket jeweller Mappin & Webb to open a 400 m2 store, but it wasn't until last month that a breakthrough was made with the commercial space. This came in June US lawyer White & Case signed a 20-year lease, in return for three rent-free years and a contribution to its office fit-out costs. Altogether, about half of the development's lettable area has been taken.

Team members argue that this counts as a success given the lamentable state of the City property market, and modestly attribute it to their "getting right building internally, both in size and shape of the floorplates and the way it presents itself".

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