Iconic nightclub Corsica Studios could fall victim to the next wave of regeneration at Elephant and Castle.
A Southwark Council report has revealed it is one of three businesses that will be forced to relocate if the council is granted compulsory purchase order (CPO) powers.
This legal mechanism allows local authorities to buy property without owners’ consent for the “greater public good”.
If granted, this would pave the way for Delancey’s Elephant and Castle town centre regeneration – a £3 billion development on the site of the demolished shopping centre.
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Southwark Council plans to offer all three businesses new premises but it is unclear whether they would survive relocation.
Council development chief Cllr James McAsh said the CPO powers were a “last resort” and the council would “act in the interest of our residents and of the businesses”.
Corsica Studios, and the two other businesses, are based in railway arches owned by the Arch Company.
But according to a council report, there are “significant differences” between Arch Co and Delancey and negotiations have reached a “deadlock”.
Cllr McAsh said: “If agreement is not reached, it could pose a real risk to the delivery of a new town centre at Elephant and Castle.”
One of the UK’s best-known techno and electronic music venues, Corsica Studios has occupied two railway arches off the roundabout since 2002.
Southwark Council says it would offer the venue nearby arches on Elephant Road. But given relocation costs, which could include licensing and soundproofing, it is unclear whether this would be viable.
The other two businesses at risk of relocation are Latin-American supermarket DistriAdina and freight forwarding company Beset.
CPO powers would need to be confirmed by Michael Gove, the Secretary of State for Levelling Up, Housing and Communities.
Approved in July 2019, the controversial demolition of the Elephant and Castle shopping centre was subject to a legal challenge which went to the Royal Courts of Justice. The challenge was defeated in December 2019.
A spokesperson for Delancey said: “The Elephant and Castle Town Centre team has been in discussions with Arch Co regarding the potential purchase of a small number of arches on Elephant Road. We are unable to comment on the details of these discussions, which are commercially sensitive.
“The purchase of these arches will help ensure the completion of a new town centre in Elephant and Castle, which will deliver a diverse range of benefits, including close to 1,000 new homes, restaurants, shops, a university, workspace, leisure and cultural facilities, transport infrastructure and public realm.”
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Cllr James McAsh, Cabinet Member for Climate Emergency & Sustainable Development, said: “As is always the case, before any use of a Compulsory Purchase Order (CPO) as a last resort, we negotiate with relevant parties to try to come to an agreement. In this case, those negotiations continue.
“If agreement is not reached, it could pose a real risk to the delivery of a new town centre at Elephant and Castle and the pedestrian link between the new town centre and Elephant Park which has been the council’s clear strategy for many years.
“We must act in the interest of our residents and of the businesses currently occupying the arches who face huge uncertainty with negotiations ongoing. Plans outline how they would be relocated to premises nearby following any CPO process.
“We want nothing more than for them to remain and flourish as the new town centre comes forward.”
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A spokesperson for the Arch Company said: “There are ongoing discussions between us and Delancey/Get Living regarding the potential integration of the Elephant Road arches into the redevelopment of Elephant & Castle town centre. We will continue engaging with all parties to see if an agreement can be reached.”