Development and Management of One Crown Place – #ForHotels
Lifecycle stage: (3) Development & (4) HMAs & General Management
Client name: One Crown Place
Project value: Confidential
Location: Spitalfields
The Brief
Forsters continue to advise the owners of One Crown Place, a prestigious mixed-use development in the City of London, from the initial development phase through to the hotel’s opening and ongoing management arrangements. The project comprises a complex, multi-asset estate, bringing together high-end residential, office and hotel uses.
During the course of the development, changing market conditions and the impact of the COVID-19 pandemic required the hotel element of the scheme to transition from a lease structure to a hotel management agreement (HMA). Our Hotels and Leisure team had to react quickly and commercially in terms of agreeing the HMA to align with the hotel opening date.
Our advice has been cross-practice, with Commercial Real Estate, Construction, Planning, Tax and Banking and Finance collaborating to provide innovative and dynamic yet risk-balanced advice.
The Development
The scheme comprises two towers of 29 and 33 storeys respectively, which house 120,000sq ft of office space, in addition to 235 high-end residential units, and a boutique hotel operated by Bespoke Hotels, plus a standalone office building, 54 Wilson Street.
We advised on the initial development phase, including issues surrounding rights of light, planning, and construction, as well as other development constraint issues, alongside the structuring of the component parts of the estate from a legal perspective.
As the asset stabilises, we continue to advise our clients on asset management matters, for example the asset management agreement with the retained asset managers, Green Place Partners, with whom we now work closely in relation to all aspect of the development/stabilised asset.
We are working on the pre-letting of the development’s office space, part of which, under the s106 agreement, must be let as affordable workspace.
Following the completion of the development and leading up to the opening of the hotel, we were instructed to provide advice to the client on the hotel management agreement (as outlined below), with the operator, Bespoke Hotels.
Our relationship with our valued client, beginning with the site’s acquisition and development, continuing through various development and stabilised asset refinancings, the apartment sales, the agreement of the HMA with the operator, Bespoke, and the pre letting of the commercial space, speaks to the depth and breadth of the team we can field, alongside our understanding of the building of long lasting and collaborative relationships with the client and intermediaries alike.
Hotel Management Agreement
Our team ensured that all associated areas and risks around a hotel management agreement, including the financing and real estate aspects, were considered in light of the change to a management agreement. We also guided the owner, who had not previously been active in this sector, to understand what is required of an owner and an owner’s obligations under a management agreement.
The transaction was unusual in that we negotiated a bespoke agreement to cater for the operator provision of HR and payroll and acting as the employer, with the owner then reimbursing the staff costs.
Managing this relationship was particularly pertinent following delays to the completion of the hotel owing to both building delay and to COVID. In the end, the owner of the hotel at One Crown Place engaged the operator in time for a slightly delayed opening, having obtained both the lender’s consent and all property rights across a particularly complex site.
Having already acted on the development aspects of the hotel, it was great to continue our relationship with the client and be a part of the hotel’s successful opening.
