The billion-pound plans to recreate the Elephant and Castle as a blueprint for sophisticated inner-city living with thousands of new homes and a dynamic community life stalled dramatically when the recession hit.
This week it was announced that it's back on track, as one of the most significant regeneration zones in Europe with 6,000 new homes, following a deal to finance the area's transport improvements.
Now that Transport for London has agreed to pay for an overhaul of the town centre's southern roundabout and busy gyratory system, Southwark council and development partner Lend Lease can go ahead with plans to transform the 170-acre zone.
Work will begin early next year (2010), by which time the area's first new residential skyscraper, Strata, will be nearing completion. Demolition of the sprawling Heygate council estate, where most of the new private homes will be located, will also be under way by then.
Waiting in the wings is Oakmayne Plaza, a mixed-use scheme of 374 homes that will overlook a new market square, shops, restaurants and cinema. It is at the heart of the regeneration zone, right next to the conspicuous pink shopping centre and run-down train station.
Being such a pivotal site, the scheme is a prime candidate for funding from the Government's Homes and Communities Agency (HCA), whose giant, £17 billion three-year budget is being used to kick-start the housing market in the wake of the credit crunch.
Last month the HCA announced a £93 million bail-out of five London developments, including Barratt's 964-home St Andrews Hospital scheme in Bow.
With its continental-style piazza, Oakmayne Plaza will create a much-needed new hub for Elephant and Castle, linking in with refurbished railway arch premises earmarked for boutiques and cafés, and the Coronet theatre, being turned into a live music and performance venue.
Streetscape improvements are already making Elephant & Castle a better place. St Mary's Churchyard, next to the handsome Metropolitan Tabernacle building — the area's only pre-Second World War building — has been given a striking makeover, while developer First Base is sponsoring a design competition to transform Amelia Street, where its Printworks scheme is under way. This has 164 apartments, a mix of private, key worker and rented homes. Prices from £190,000. Call Savills on 020 7613 1888.
'It's within walking distance of Westminster and the Bank of England'
The Strata tower, with 43 storeys, will be the tallest residential tower in travel zone one. Most homes were sold off-plan two years ago and only four units remain, starting at £710,000 for a two-bedroom flat on the 42nd floor and rising to £2.5 million for a three-bedroom apartment. Call 020 7408 8411.
"Views from the top are phenomenal," says Mike Bickerton of estate agent DTZ, hence the price premium.
Many of the early buyers paid about £400 per sq ft. Current values are thought to be between £500 and £600 per sq ft. The acid test will be when the flats are valued for mortgages in a year or so.
London is not short of regeneration candidates but Elephant and Castle is arguably a special case because of its proximity to the West End and City. The area marks the southern boundary of the congestion charge zone and is within walking distance of the Palace of Westminster and Bank of England.
Badly blitzed during World War Two, what remained of Elephant and Castle was replaced by ugly tower blocks and a pedestrian-eating road system. After its 170-acre revamp, it will have nearly two million square feet of new commercial and leisure space, and the housing stock will have quadrupled.
But homebuyers will have to wait longer than expected for the new vision to be fully realised. The intended completion date was 2014 but Lend Lease, the main developer, has suffered setbacks, notably with the 2012 Olympic Village, for which it is also responsible.
Dan Labbard, chief executive of Lend Lease, says the company is fully committed to Elephant & Castle: "It is one of the most significant regeneration schemes in Europe and presents an opportunity to create a brand new residential and retail neighbourhood."
The hope (and expectation) is that Elephant and Castle will become part of the wider Southwark renaissance.
Regeneration may soften Elephant and Castle's urban edginess, but its vibrant character will remain. Despite the fumes, it is a central, cheap and colourful place to live — an area with attitude trying to be cheerful.