First question: Is this really just an access agreement?
While an access agreement sounds temporary, developers frequently combine it with an Option Deed or Option to Lease. If you sign an agreement that contains an option, you are forfeiting the right to say "No" to a 30-year commercial lease later on. This is a red flag.
Why does a developer need access agreements?
This is a normal process in the pathway to securing land for the project, but the agreements may also provide an important value adding component to the package, to sell to another developer. The current developer of Winterbourne Wind, for example, is building book value to the project in order to sell it, possibly at the landholders expense.
In the case of Winterbourne Wind, as an example, there is a history of timeline blowouts.
Today, just like 5 years ago, Winterbourne Wind are once again forecasting a 2 year period until construction – forecast now for 2028.
This is a clear pattern of over-promising and under-delivering.
Every year that this project is pushed back, is a year of devaluation and deferment of income to landholders. It is another year of forfeiting the right to exclude or control visitors on the property, and another year of disruption from monitoring equipment, or other investigation activity. It is another year in limbo, and another year carrying the liability of forfeiting certain property rights.
Are the current Winterbourne Wind timeline goals valid, are they realistic? Is this developer capable of delivering to expectation, of meeting goals? Is there a history of expectations being met. Not by the test of history. These are important considerations for a landholder signing an access agreement.
If you extend your agreement again, what happens if construction slips another five years? What are you paid while your land remains tied up, and when can you walk away? Can you sell your property, or effectively borrow against it for another purchase?
While sometimes contested by renewable developers when advising landholders, the facts must be sought. In the case of a holding entity of the project going into receivership, or lacking the ability to finance the decommissioning process, the ultimate responsibility of decommissioning falls to the landholder. This has been referred to a number of times.
Today, just like 5 years ago, Winterbourne Wind are once again forecasting a 2 year period until construction – forecast now for 2028.
This is a clear pattern of over-promising and under-delivering.
Every year that this project is pushed back, is a year of devaluation and deferment of income to landholders. It is another year of forfeiting the right to exclude or control visitors on the property, and another year of disruption from monitoring equipment, or other investigation activity. It is another year in limbo, and another year carrying the liability of forfeiting certain property rights.
Are the current Winterbourne Wind timeline goals valid, are they realistic? Is this developer capable of delivering to expectation, of meeting goals? Is there a history of expectations being met. Not by the test of history. These are important considerations for a landholder signing an access agreement.
If you extend your agreement again, what happens if construction slips another five years? What are you paid while your land remains tied up, and when can you walk away? Can you sell your property, or effectively borrow against it for another purchase?
