Council poised to seal the deal on Tesco’s Morning Lane site

Philip Glanville today said the scheme could provide 245,000 sq ft of new homes, at least 20 per cent of which would be “affordable”

Hackney Council is poised to close a behind-the-scenes deal to buy the large Tesco supermarket and car park site at 55 Morning Lane for an undisclosed multi-million pound sum.

Money to purchase the land will come in the form of a loan from the Treasury-backed Public Works Loan Board.

The site will be leased to luxury fashion outlet operator Hackney Walk, which already runs designer clothes shops based in the nearby railway arches. Workspace and offices will also be built.

Philip Glanville, Mayor of Hackney, today said the project would effectively be cost neutral because councils could borrow big sums of money to fund investment-led schemes which eventually net profits.

The development was about becoming “more self-sufficient” so as not to be so reliant on government grant funding and council tax receipts in future, he added.

The land would provide around 270,000 sq ft of retail and commercial space and 245,000 sq ft of land for new homes, at least 20 per cent of which would be “affordable”.

Tesco will retain a “superstore” in Morning Lane, but it is understood the grocer will be downsizing.

The supermarket is expected to remain in its existing building until its newly-built home is ready for habitation in around three or four years time, at which point the low-slung hangar it currently occupies will be demolished.

An image from the council’s draft masterplan, released last year, showing how the redeveloped Morning Lane Tesco site could look

Mayor Glanville said: “Tesco wanted to sell the site. You either have the council in there, owning a site that’s really strategic in the heart of Hackney Central, or it could go to another developer and we’d lose the ability to shape the type of scheme that comes forward.”

Steve Rigby, Tesco’s property chief, said: “Our business started in Hackney and we are proud of our connection to the local area, so we are delighted to be working with the council on this project.”

The land is located within an area covered by the council’s “Mare Street and surrounds” masterplan. It was last year named as an “opportunity site” which urban designers felt could inject new life into the neighbourhood, with residential blocks potentially built on the footprint of the store.

Most people who responded to a consultation about the future of the Tesco site said they favoured it being redeveloped.

However, documents to be considered by the council’s cabinet next Monday state that some respondents were “concerned about the impact of a development with taller building elements, on the surrounding area”.

The cabinet is expected to approve the purchase of 55 Morning Lane next week.

Tesco, Morning Lane

Hackney Walk

A minimum of 50 per cent of the roughly 1,500 new retail jobs which the development is expected to create will be earmarked for Hackney residents.

The council has not specified what type of affordable homes the new housing units would be, but Glanville said: “I’d be interested in London living rent…because I think it’s a town centre, it’s close to schools, it’s close to the council itself, close to the Homerton, to BSix – as well as having jobs working for some of the industries we want to retain in Hackney.”

Challenged about whether the borough really needs more designer fashion outlets, Glanville insisted the range of shops on the Morning Lane site would be “broader” and “more inclusive” than that which currently exists in Hackney Walk in and around the railway arches.

“I think we’ve been pretty clear, and I think Hackney Walk is aware – although I don’t speak for them – that they’re going to have to broaden the retail offer given the amount of retail space they are going to be creating through this scheme,” he said.

But the choice of lessee could prove controversial among those who already view as jarring the existence of what was once trumpeted as a glitzy “Bicester-style” luxury development in a relatively deprived part of London.

Residents who live nearby might also be angered, given the noise pollution problems which have been blamed on Hackney Walk.

The Morning Lane arches prior to being converted into Hackney Walk retail units. Photograph: Benjamin Counsell

Useful car repair businesses were lost when the railway arches were handed over to Hackney Walk, but Glanville said: “The biggest cause of those businesses vanishing is actually Network Rail themselves and their attitude to rents.”

Glanville and cabinet member for business Councillor Guy Nicholson today called on Network Rail to reconsider severe rent hikes which have already been blamed for forcing out businesses including longstanding independent eatery Cafe Bohemia.

Some traders are understood to have been hit with rent increases of as much as 200 per cent.

No one from Network Rail was immediately available for comment.

After the Hackney Citizen reported on the council’s draft masterplan for the Mare Street area last year there were warnings from guardians of one of the borough’s most historic buildings, St Augustine’s Tower, that the proposals could undermine protections for it.

Others said they wanted the council to help resurrect a long-lost river or erect an i360-style skyscraper.