Ursula von der Leyen's EU is facing a ￡27million bill for Churchill Place in Canary Wharf (Image: GETTY/Google Streetview)
The European Union is facing the prospect of stumping up ￡27million for a huge office bloc in London vacated after Brexit, confidential papers have indicated, with the bill having the potential to rise to an eye-watering ￡370million.
The 280,000-square-foot building, 30 Churchill Place in Canary Wharf, was previously used by the European Medicines Agency (EMA).
It was leased to US office rental business WeWork after Britain quit the EU - but the future is unclear after the company filed for bankruptcy in November.
The EMA signed a 25-year lease worth ￡500million for the property in 2011 - five years before the pivotal referendum.
As a result, it relocated 900 staff to Amsterdam, and after an unsuccessful High Court claim that Brexit had “frustrated” the lease agreement, struck a deal with WeWork to sublet 10 floors of office space in 2019.
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The EMA is now based in Amsterdam (Image: Getty)
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However, a document circulated to the European Parliament’s budget committee and seen by The Daily Telegraph said the UK branch of WeWork would soon stop paying rent on the building.
If it stays empty for the rest of the year, the EU will face a bill of ￡27million bill, with the EMA, which is an agency of the bloc, already requesting more cash to cover the hit to its budget.
MEPs must soon decide whether to cover the ￡4.55million it will owe for the first three months of 2024.
A briefing note said: “The Agency’s current budget for 2024 does not have funding for additional costs outside its annual programme.
“As negotiations with WeWork UK continue, it appears increasingly likely that the Union budget will need to contribute towards the rent of the 30 Churchill Place premises, which has until now been fully covered by WeWork UK.”
The EU’s lease on 30 Churchill Place runs until June 2039, meaning it will be liable for ￡373million in rent if a longer-term solution is not identified.
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Churchill Place is in Canary Wharf (Image: Google Streetview)
Frank Furedi, the executive director of the MCC Brussels think tank, said: “EU taxpayers are on the hook for millions of Euros because of bad decisions by EU agencies.
“We are still paying for the incompetence of the EMA not negotiating an exit clause of their expensive London property.
“There was no need to rush forward to move the European Medicines Agency from London after Brexit, but because of that arrogant decision by the EU, millions will be wasted.”
A Wework spokeswoman said: “We are up to date on our lease obligations at 30 Churchill Place, which remains open and operational.
“As part of our previously announced process, we continue to work constructively and collaboratively with our landlord partner at this flagship location to craft a solution that mutually benefits both parties for the long term.”
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An EMA spokesperson said: "WeWork filed for ‘Chapter 11’ bankruptcy protection in New Jersey (United States) on 6 November 2023, in the context of an ongoing reorganisation of its business activities. Chapter 11 of the US Bankruptcy Code is a procedure which allows a debtor to remain in possession, continuing to operate its business, while a restructuring plan is agreed with its creditors. The bankruptcy protection filing concerns WeWork’s branches in the US and Canada only."
WeWork continued to carry on operations from its London premises and was not in breach of its financial obligations, the spokeswoman stressed.
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The spokesperson added: "The rate of occupation of WeWork working spaces at 30 Churchill Place is currently one of the highest in London. The allegation that the giant space is now empty with none of it rented out to other businesses is devoid of any foundation.
"Following the filing for bankruptcy, WeWork has been in contact with its landlords including EMA in order to re-negotiate their leases.
"The Agency is in close contact with the EU Institutions to address the situation, in line with the provisions set out in its financial regulation and to ensure that it can focus its resources on its public health mission."
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