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Published: 31 October 2008
Bloomsbury residents are now left with a 'wasteland' following the collapse of the Noho Square scheme
Bloomsbury residents are now left with a ‘wasteland’ following the collapse of the Noho Square scheme

Banking crisis triggers collapse of controversial £1bn scheme

A WASTELAND has been left in the heart of Fitzrovia by the credit-crunch collapse of the controversial “Noho Square” development yesterday (Thursday).
The demolished site of the former Middlesex Hospital in Mortimer Street was left in the hands of newly nationalised Icelandic bank Kaupthing hf after the dramatic exit of the multi-millionaire developer brothers Nick and Christian Candy.
And with the 273-apartment, £1bn Noho project apparently dead in the water, prominent residents led calls for the three-acre site to be transformed into public space – and pledged resistance to over-development by a new buyer using the credit crunch as an excuse to build hotels or shops.
Bloomsbury councillor Rebecca Hossack said: “They’ve pulled down that beautiful building, like the ghastly vandals they are, and then cleared off.
“At the very least, there is one thing in Bloomsbury we need and that is a park – and we should see if we can turn it into allotments.”
Activists who opposed the Noho scheme warned that the result of the economic turmoil could be worse still.
Max Neufeld, chairman of the Charlotte Street Association, said: “The credit climate could be used as a lever on Westminster [Council] for a new application.
“The worst outcome would be planning ?permission for a mix of uses, [or] an even greater amount of accommodation. ”
While the credit crunch makes housebuilding unprofitable, the site should be used for “temporary open space”, Mr Neufeld added.
Last night, details of the collapse of the partnership were still emerging, but they have their roots in the catastrophic impact of the lending crunch on Iceland and the implosion of the housing market in London.
Kaupthing, an Icelandic bank, was the biggest shareholder in the Guernsey-based consortium which bought the Middlesex site from University College Hospital for £175m in June 2006.
The Candy brothers’ company CPC group owned a third, while Camden Market magnate Richard Caring reportedly held 10 per cent.
When Kaupthing went into administration earlier this month, rumours circulated that
CPC would buy them out.
As late as last Friday, the Candy brothers told the West End Extra: “We are considering our options.”
But yesterday, a CPC Group spokeswoman announced that CPC had dumped its share of Noho onto Kaupthing, in a swap for the bank’s share in another joint venture in Beverly Hills.
She added: “For Noho Square, Candy & Candy will cease to continue as development managers, interior designers and sales and marketing consultants.”
Privately, the CPC Group has told the West End Extra that its equity in Noho had been worthless because the site was now worth less than £100m.
However, CPC has stressed that the door remains open for the Candy brothers to return to the project.
Their spokeswoman said: “We would be interested in purchasing Noho Square, in the future, as a potential joint venture with Kaupthing or an outright sale – we know more about the site than any other party. We are in a good shape and can move fast on deals.”
No one was answering the phone yesterday at Kaupthing, which now owns 90 per cent of the Noho project.
But in a statement, a Kaupthing Bank spokesperson
said: “We still have every confidence in the site, and believe it is capable of supporting a world-class development.”

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