On 24th June, it emerged that the Mayor of London is planning to leave City Hall in an attempt to save £55m in the wake of the coronavirus crisis. Now, Sadiq Khan has proposed creating a new City Hall at the Crystal building in Royal Docks, east London, also currently owned by the Greater London Authority.
City Hall has been the official home of the GLA and has housed the mayor’s office since 2002. But it costs the GLA £11.1m a year in rent to its private landlord, the Kuwaiti-owned St Martins Property Group. The Mayor has been on record about the unprecedented losses that the GLA faces in the wake of coronavirus with a decline in income from business rates and council tax. Last week, he had announced a voluntary 10% salary cut. Regardless of these measures, Khan worries that without government intervention, there can be significant cuts in public transport and emergency services with a budget shortfall of up to £493m over the next two years. He said,
“Leaving our current home would save £55m over five years, which would help us to protect and invest in the things that matter most to Londoners, as well as supporting the regeneration of the Royal Docks.”
The terms of the lease were originally negotiated by the government in 2001 for a 25-year period. However, they allow for a break in the contract after 20 years, in December 2021, which the Mayor believes is the first and only chance the GLA had to consider leaving.
Notice has to be given this year and a decision is needed by September. Rent is anticipated to rise up to £12.6m per year beyond Christmas 2021.
