London's decaying Battersea Power Station site would be worth an extra 470 million pounds to a developer who could demolish the protected landmark building itself, according to calculations done for Reuters by property consultancy EC Harris.
The extra cash would boost the viability of a stalled scheme central to the creation of 25,000 jobs in the wider area as Britain's economic outlook darkens.
The 38-acre (15-hectare) site, which has seen repeated failed redevelopment attempts in the three decades since the power station closed, goes on sale again next month after the collapse in December of the latest scheme - a 5.5 billion pound plan for homes and offices based around the derelict riverside edifice.
That plan, by Irish developer Treasury Holdings, was approved by local government authority Wandsworth council, and included 3,611 homes as well as shops and offices on the site and inside the shell of the building itself.
EC Harris calculates that after demolition and based on current density plans for housing, a developer could build 1,200 apartments where the building stands and sell them for an extra 470 million pounds.
Flattening Europe's largest brick structure and its four chimneys would save estimated renovation costs of about 500 million, roughly equivalent to the cost of demolition and apartment construction combined.
That would leave the 470 million pound proceeds as an extra cushion of profit for any developer running the numbers on the site, according to EC Harris numbers.
The site has been through four economic cycles and development after development has failed, said Mark Farmer, head of private residential property at the consultancy, which is part of Dutch company Arcadis.
You have to ask yourself at what point concerns about its heritage are outweighed by what is truly economically viable.
Battersea, a coal-fired power station that was closed in 1983 after 50 years in service, is expected to draw interest from the Far East, Russia and the Middle East and formal sales documents are due to go out via agent Knight Frank next month with a price tag of about 300 to 400 million pounds.
That price could leave its current owners -- Lloyds Banking Group and Irish state-run 'bad bank' the National Asset Management Agency -- out of pocket. They took control as creditors, reportedly owed between 400 and 500 million pounds, after the latest scheme collapsed late last year.
Malaysian property company SP Setia, which made a 262 million pound bid last year, and British groups Land Securities, British Land, and Capital & Counties have all been named as possible bidders.
The former coal-fired power station became a failed symbol of regeneration in the 1980s under then Prime Minister Margaret Thatcher, and has already repeated the trick on current Prime minister David Cameron who chose it as the backdrop to his Conservative Party election campaign in 2010.
After backing the extension of London's Underground rail network to Battersea, a crucial step towards its viability, Chancellor of the Exchequer George Osborne said the site would help create 25,000 new jobs in the wider area in November.
The power station chimneys have been a part of the city's skyline for almost 80 years and appear on Pink Floyd's 1977 Animals album cover, but after so many years without a successful redevelopment scheme the prospect of demolition is now openly discussed.
The way people are talking, the likelihood of demolition is increasing, said Neil Bennett, a partner at architect Terry Farrell and Partners, which has drawn up a compromise proposal aimed at keeping heritage bodies and developers happy.
The proposal removes a plan for 180 homes inside the structure itself that would cost 600 million pounds, and would instead see the building left largely untouched and surrounded by a park. Bennett says this would avoid the need for extensive restoration and only cost between 25 and 50 million pounds.
Given it's been derelict for so long it's time for reality. We are given to understand such a proposal would have the backing of English Heritage and the Wandsworth planners, Bennett told Reuters.
English Heritage, which advises the government on which buildings to protect, declined to comment on the proposal, but said planning restrictions were not behind the redevelopment failures and that removal of Battersea's Grade-II listed status was unlikely.
The presence of the power station makes it more viable because it gives the sense of magic that makes people want to live there, said Helen Bowman, a spokeswoman for government advisory body English Heritage.
The final decision would be taken the Department for Culture Media and Sport and getting a revised scheme through the local planning system could take several more years.
Any move to demolish might also provoke a strong backlash given its place in the nation's affections. The site's architect was Sir Giles Gilbert Scott, who also designed London's famous red telephone boxes. It featured in the Beatles' film Help! and more recently in Batman film The Dark Knight.
Previous failed plans for the site include a fairground, a base for circus act Cirque du Soleil and a scheme that included a restaurant table at the top of one of the chimneys. More recently, Chelsea Football club looked at the viability of moving there.
Never say never but demolishing Grade II-listed buildings doesn't generally happen, said Mike Brook, economic and development officer at Wandsworth council. The last plan got within a gnat's whisker of viability, and that will be a factor.
(Reporting by Tom Bill; Editing by Chris Wickham and Andrew Callus)
(Updated to remove incorrect connection of architects Farrell and Partners to failed Treasury scheme)