Development Agreements – when are they exempt?

Cyrus Mehta, PartnerNabarro LLP

58151864

Land transactions

• “Pure” land transactions (transfers, leases, licences) are not caught

• Public works contracts:– for the carry out of works– contracting authority “engages a person” to carry out works

• Regulation 6 (2)(e) – exemption for contracts for the acquisition of land and (existing) buildings

• But state aid requirements: Commission’s Notice on sale of land and buildings

“Mixed” contracts

• Gestion Hotelera – “main object” test– “incidental” works

• Article 1(2)(b) Directive: “Public contracts having as their

object …”• Quedlinburg

– “main purpose” was not acquisition of land, but procurement of building

• Example: leases with covenants to refurbish• “Severability” of works

Contractual commitment to develop

• Contract: – for works– contracting authority engages a person …– “contract” has a Community law definition (see AG in City of

Cologne)• Does an intention or expectation suffice?• Context of development• Flensburg case

– sanctions for failure to develop– re-acquisition of property– but how specific can requirements be?

Contractual commitment to develop cont ..

• ECJ reference in Mueller• “specified requirements”

– how specific?– outline parameters do not suffice?

• Development “opportunities” as works concessions?– But still need to show “works contract”

Miscellaneous

• Regulation 34 – subsidised works contracts• Use of public/private SPVs for development

– unlikely to be “in-house” (Teckal etc.)– is there a “works” contract?– Commission’s IPPP notice

• Planning obligations : quality standards, e.g. Code for Sustainable Homes

Summary

Where EU procurement rules may not apply:– “pure” land transactions– contracts where “main object” is disposal of land– no contractual commitment to develop– contracts with outline specification