1. Joint Venture Principles in Practice
Alan Gough
Watford Borough Council
Gareth Lewis
Watford Community Housing Trust

2. Joint Venture
“A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance.” Wikipedia

3. Partnership
“A partnership is an arrangement where parties, known as partners, agree to cooperate to advance their mutual interests.” Wikipedia

4. Initial Drivers Existing strategic relationship
Recognition of the political landscape
Increasing homelessness and out of borough placements
Need for immediate action

5. Why the J-V? Shared objectives to:
Primarily to enhance the quantity of affordable housing
Increase housing supply of all tenures
Generate income to support core objectives
Recognition of the potential contributions of each
Formalise the principle of a long-term relationship
Not project specific

6. Potential Contributions
Political and Board drive to achieve
Adjacent assets producing a “marriage value”
Funding through on-lending
Development delivery skills
Essential back-office support

7. Structure (1) Hours in darkened rooms with lawyers and tax accountants
Protect regulatory positions – use of subsidiaries
Ensure parity of risk and reward
Maximise tax advantages

8. Structure (2) Two Companies Hart Homes (Watford) Ltd (RentCo)
Holds all rental property
Holds shared ownership property
Hart Homes (Watford) Development LLP (SaleLLP)
Develops for market sale
Develops on behalf of RentCo
Why two companies?

9. Company Structure – Hart Homes (Watford) Ltd
Watford Borough
Council
Watford Community Housing Trust
Clarendon Living Ltd
Hart Homes (Watford)
Limited

10. Structure – Hart Homes (Watford) Development LLP
Watford Borough Council
Watford Community Housing Trust
Watford CommercialServices Ltd
Clarendon Living Ltd
Hart Homes (Watford) Development Limited Liability Partnership

11. Governance Partnership – equally shared risks and rewards
RentCo – 2 Directors from each
SaleLLP – 2 Corporate Representatives from each
Chair Rotates annually – no casting vote
Council Cabinet and Clarendon Living Ltd Board have oversight

12. Why it works! Shared agenda Open and frank dialogue
Willingness to work at it
Mutual respect
Honesty

13. Outputs First Council/Trust Board papers January 2016
Companies registered January 2017
First project to site February 2017
40-bed Temporary Accommodation facility
36 flats for affordable rent

14. Outputs (cont.) Second project in design - 80 homes all tenures
Shared trust enabled scheme design/tender/commencement at risk
WBC able to trade commercially through WCS

15. Lessons Learnt
Invest the time to work together on principles and detail
Recognise the need (and cost!) of specialist advice – many pitfalls!
Do not underestimate the time needed for set up – particularly bank accounts
Robustly test the business case for the J-V
Ensure consensus and equality of understanding
Welcome challenge!