Developer Sean Mulryan's company Ballymore has spent £10m (€11.1m) towards boxing in the railway line at its Bishopsgate Goods Yard site near the City of London.
The company owns the site in a 50%-50% partnership with Hammerson, the British property developer. Hammerson has also contributed £10m to the venture, which will allow development of the 12-acre site.
The joint venture, however, has told London mayor Boris Johnson that if it has to pay towards the cost of the Crossrail public transport project, the standard charge proposed on the development of the site would "would make the project unviable". Developers in London face huge bills in the form of contributions to Crossrail, the east-west railway that will link Heathrow with Canary Wharf. Johnson restated plans last month to secure contributions from them towards the cost of the project.
In a letter to Johnson in August, the venture also said "overcoming the constraints posed by the existing public transport infrastructure and integrating the development with the east London line represents a capital cost of £100m. This substantial cost, together with other planning obligations such as affordable housing and the need to provide a public park and a new civic square, means that the viability of the scheme is already unduly comprised".
The joint venture, dubbed Bishopsgate Goodsyard Regeneration, fears it will have to pay two separate charges, in effect being hit with a double penalty, over Crossrail. It said the "standard charge should be applied in a way that encourages development rather than frustrating it. This balancing of the charge against other planning obligations and requirements is particularly important given the economic circumstances, which are likely to be prevalent in the short to medium term".
A master plan for the site, being drawn up in conjunction with the local boroughs, is expected to be published in the near future.
Ballymore acquired its stake in the site as part of a wider deal in which the developer bought seven former Railtrack properties from Hammerson for €41m. Separately the two sides engaged in a 50-50 joint venture to develop Bishopsgate and a site near Paddington Station.