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
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