The 'will they?' 'won't they?' saga of the Elephant & Castle regeneration took a positive turn on Monday night when Southwark Council's executive agreed to sign a heads of terms agreement with developers Lend Lease Europe.
A decision was expected last Tuesday but the council's executive (a committee of 10 Lib Dem and Conservative councillors) asked officers for additional information and reconvened at the authority's new Tooley Street building on Monday night with just hours to spare before the expiry of the exclusivity arrangements between the two partners.
Councillors have now agreed to authorise chief executive Annie Shepperd to sign a heads of terms agreement with Lend Lease Europe and continue exclusive negotiations towards the signing of a full-scale regeneration agreement for the site encompassing the Heygate Estate and Elephant & Castle Shopping Centre.
"This decision paves the way for another important step on our journey to transform the Elephant and Castle, to create a new, successful and vibrant urban quarter for Southwark and London," says Cllr Nick Stanton, leader of Southwark Council.
"It also represents a very good deal for local taxpayers and excellent value for money, which is particularly impressive as we have been negotiating this agreement against the backdrop of a national recession.
"We have always said that we want to create and shape a new and exciting quarter for London, that also draws on the best traditions of the area. We remain committed to delivering leisure, retail and infrastructure improvements that support the creation of a quality, mixed and cohesive community that is served by excellent local facilities.
"The joined up approach we are taking with our partners Lend Lease is seeking to realise our joint ambition of transforming this historic part of south London."
As we reported last week, the current deal provides greater clarity about the future redevelopment of the land currently occupied by the Heygate Estate but there is still a big question mark over the section of the regeneration area west of the railway line, including the Elephant & Castle Shopping Centre.
Both parties have expressed their commitment to work together to redevelop the shopping centre once economic circumstances allow and a viable scheme can be brought forward, but no timescales have been set.
The overall scheme has been split in to six phases, with the first, the demolition of the Rodney Road and Wingrave blocks of the Heygate Estate, due to start in February 2010.
Southwark will sell its land at the Heygate on two 999 year leases.
"Lend Lease is extremely pleased with Southwark Council's decision," says Dan Labbad from Lend Lease Europe.
"We understand the importance of the successful regeneration of Elephant and Castle to the local community, Southwark and London and are committed to continuing to work in partnership with the Council to finalise agreements and begin work on site."
Southwark selected Lend Lease Europe as its preferred partner in July 2007. A regeneration agreement with Lend Lease was due to be signed by the end of that year, but 28 months later that milestone has still not yet been reached.
"I will continue to do all that I can to ensure that local residents get maximum benefits from regeneration at the Elephant and Castle," says Simon Hughes MP.
"This new deal with Lend Lease amounts to little more than throwing Heygate residents out of their homes and building new luxury housing which they won't be able to afford," Labour's Cllr Peter John warned last week.
"What are tenants and residents getting out of it? The Lib Dems are selling Elephant & Castle short and betraying the existing community."
The cross-party overview and scrutiny committee could now 'call in' the executive's decision for examination at its meeting next Monday night.
Whilst the latest announcement from Southwark and Lend Lease is good news for those eagerly anticipating progress at Elephant & Castle, there are other factors which could work against the regeneration process.
Boris Johnson last week confirmed in a written answer that he will not respond favourably to Southwark's call for the Elephant to be exempted from his proposed Crossrail levy on office developments in central London.
"The Mayor looked at the case for other exceptions to the charging zone, including at the Elephant and Castle," said the written answer from the Mayor of London's office. "It was concluded that the Vauxhall Nine Elms Battersea exemption was the only one that could be supported."
Southwark has also made representations against the Mayor's revised London View Management Framework which could thwart proposals for high-rise development in parts of the regeneration area.
This month Southwark Council will consider two major planning applications for Newington Causeway: a 41-storey tower for the Eileen House site and a smaller tower on the other side of the road, which if built will form a northern gateway to the Elephant & Castle.
The long-awaited removal of the southern roundabout and subways should also start in the new year.