Development Agreements – when are they exempt? Cyrus Mehta, Partner Nabarro LLP

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