Agenda item

10.1

The Executive Director, Place and Executive Director, Resources, submitted a joint report:

1)         Providing an update to the Heart of the City II development two years following the major decision that this Council took to invest in and progress the major re-shaping of Sheffield City Centre following past difficulties and seeking approval/endorsement for the Councils updated delivery strategy;

2)         Seeking to delegate authority for the delivery of the remaining phases of the Heart of the City II as set out in the report, including proposals for introducing the Real Living Wage, measures to deal with Climate Change and specifically providing authority to enter into new lease arrangements with John Lewis & Partners for their existing shop in Barker’s Pool; all subject to compliance with the Council’s budget processes, financial regulations and capital approval processes; and

3)         Seeking approval to the reallocation of the previously approved financial envelope to reprioritise the delivery of the remaining Heart of the City II blocks in line with the proposals set out in the report taking into account current economic challenges, risks and the Covid-19 pandemic.

10.2

RESOLVED: That Cabinet:

(a)  notes the progress made to date on delivery of the Heart of the City II   development;

(b)  endorses the updated strategy outlined in the report for the phased delivery of the Heart of the City II development together with the updated delivery programme, the proposed new lease arrangements with John Lewis & Partners and the updated estimated financial envelope;

(c)  endorses the plan to encourage occupiers within the scheme to be good employers through, for example, paying employees the Foundation Living Wage as a minimum, or alternative mechanisms such as employee owned businesses;

(d)  endorses the aim for all further development to exceed minimum environmental standards as set out by the international standards through the UK’s Building Research Establishment Environmental Assessment Method (BREEAM) or the US Green Building Council’s Leadership in Energy and Environmental Design (LEED);

(e)  delegates authority to the Executive Director, Place and the Executive Director, Resources, in consultation with the Cabinet Member for Business and Investment, the Cabinet Member for Finance, Resources and Governance, the Director of Legal & Governance and the Chief Property Officer, to:   

1.    approve the detailed delivery plan for the development of the remaining development blocks as set out in the report; and

2.    instruct the Director of Legal & Governance in consultation with the Chief Property Officer to complete all necessary legal documentation required to document the terms of any transactions agreed in accordance with the approvals delegated pursuant to the report; and

(f)   approves:-

1.    the re-allocation of the previously approved financial envelope to reprioritise the delivery of the remaining Heart of the City II blocks in line with the proposals set out in the report;

2.    that all relevant budgets if necessary be able to be fully funded through Prudential Borrowing and be subject to the phasing of the spend going through the Council Capital Approval process;

3.    the use of any increase in business rates income directly attributed to the scheme to repay any balance of the related Prudential Borrowing; and

4.    the use of any receipts from the disposal of any properties within the Heart of the City II site to repay any balance of the related Prudential Borrowing.

10.3

Reasons for Decision

As outlined in the report, there is a still a very clear strategic and economic case to justify the Heart of the City II development, and to maintain project momentum.

The Executive Director Place and the Executive Director, Resources still believe that the Heart of the City II development is vitally important for the regeneration of the city centre.

The reasons for the recommendations are to provide a way forward for the Council to deliver the remainder of the Heart of the City II development.

10.4

Alternatives Considered and Rejected

The do-nothing option i.e. complete the current phases the Council has committed to deliver (blocks B, C and stabilisation works only on E and H1) and then cease work on the wider Heart of the City II scheme has been considered. Not only does this course of action have a potentially worse financial impact but also has many negative outcomes for the Council.

The status of city centre will diminish, the Councils long term economic aspirations for the city and the city centre will become less feasible, there will be a lack of confidence for other projects and the reputation of both the city and Council will also suffer.

Whilst it would reduce the level of capital expenditure it would mean that the Council will have to crystalize the loss if the Heart of the City II development is not delivered, as much of its investment to date in working up the scheme will be lost and this will cause a more immediate pressure on revenue budgets.

10.5

Any Interest Declared or Dispensation Granted

None

10.6

Reason for Exemption if Public/Press Excluded During Consideration

Part 2 of the report is not for publication by virtue of Regulation 20(2) Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 because, in the opinion of the proper officer, it contains exempt information under Paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended) and the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

10.7

Respective Director Responsible for Implementation

Laraine Manley, Executive Director Place and Eugene Walker, Executive Director, Resources.

10.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

Economic and Environmental Wellbeing Scrutiny Committee.

10.1

The Executive Director, Place and Executive Director, Resources, submitted a joint report:

1)         Providing an update to the Heart of the City II development two years following the major decision that this Council took to invest in and progress the major re-shaping of Sheffield City Centre following past difficulties and seeking approval/endorsement for the Councils updated delivery strategy;

2)         Seeking to delegate authority for the delivery of the remaining phases of the Heart of the City II as set out in the report, including proposals for introducing the Real Living Wage, measures to deal with Climate Change and specifically providing authority to enter into new lease arrangements with John Lewis & Partners for their existing shop in Barker’s Pool; all subject to compliance with the Council’s budget processes, financial regulations and capital approval processes; and

3)         Seeking approval to the reallocation of the previously approved financial envelope to reprioritise the delivery of the remaining Heart of the City II blocks in line with the proposals set out in the report taking into account current economic challenges, risks and the Covid-19 pandemic.

10.2

RESOLVED: That Cabinet:

(a)  notes the progress made to date on delivery of the Heart of the City II   development;

(b)  endorses the updated strategy outlined in the report for the phased delivery of the Heart of the City II development together with the updated delivery programme, the proposed new lease arrangements with John Lewis & Partners and the updated estimated financial envelope;

(c)  endorses the plan to encourage occupiers within the scheme to be good employers through, for example, paying employees the Foundation Living Wage as a minimum, or alternative mechanisms such as employee owned businesses;

(d)  endorses the aim for all further development to exceed minimum environmental standards as set out by the international standards through the UK’s Building Research Establishment Environmental Assessment Method (BREEAM) or the US Green Building Council’s Leadership in Energy and Environmental Design (LEED);

(e)  delegates authority to the Executive Director, Place and the Executive Director, Resources, in consultation with the Cabinet Member for Business and Investment, the Cabinet Member for Finance, Resources and Governance, the Director of Legal & Governance and the Chief Property Officer, to:   

1.    approve the detailed delivery plan for the development of the remaining development blocks as set out in the report; and

2.    instruct the Director of Legal & Governance in consultation with the Chief Property Officer to complete all necessary legal documentation required to document the terms of any transactions agreed in accordance with the approvals delegated pursuant to the report; and

(f)   approves:-

1.    the re-allocation of the previously approved financial envelope to reprioritise the delivery of the remaining Heart of the City II blocks in line with the proposals set out in the report;

2.    that all relevant budgets if necessary be able to be fully funded through Prudential Borrowing and be subject to the phasing of the spend going through the Council Capital Approval process;

3.    the use of any increase in business rates income directly attributed to the scheme to repay any balance of the related Prudential Borrowing; and

4.    the use of any receipts from the disposal of any properties within the Heart of the City II site to repay any balance of the related Prudential Borrowing.

10.3

Reasons for Decision

10.3.1

10.3.2

10.3.3

As outlined in the report, there is a still a very clear strategic and economic case to justify the Heart of the City II development, and to maintain project momentum.

The Executive Director Place and the Executive Director, Resources still believe that the Heart of the City II development is vitally important for the regeneration of the city centre.

The reasons for the recommendations are to provide a way forward for the Council to deliver the remainder of the Heart of the City II development.

10.4

Alternatives Considered and Rejected

10.4.1

10.4.2

10.4.3

The do-nothing option i.e. complete the current phases the Council has committed to deliver (blocks B, C and stabilisation works only on E and H1) and then cease work on the wider Heart of the City II scheme has been considered. Not only does this course of action have a potentially worse financial impact but also has many negative outcomes for the Council.

The status of city centre will diminish, the Councils long term economic aspirations for the city and the city centre will become less feasible, there will be a lack of confidence for other projects and the reputation of both the city and Council will also suffer.

Whilst it would reduce the level of capital expenditure it would mean that the Council will have to crystalize the loss if the Heart of the City II development is not delivered, as much of its investment to date in working up the scheme will be lost and this will cause a more immediate pressure on revenue budgets.