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16.1
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The Executive
Director - Place provided an update on this strategic regeneration
project and seek approval for the City
Council to accept the new sources of external funding to support
delivery outlined within the report.
West Bar Square
is a long standing strategic project promoted by the Council which
aims to extend the City Centre to the riverside, Kelham and
Castlegate and reduce severance of Burngreave from the City Centre.
The site is currently mostly vacant land and temporary car parks.
Its development will create a vibrant new place including new
‘build to rent’ apartments and large-scale office
development in high quality buildings set around new public realm.
It is one of the few sites in the City Centre that can accommodate
large floorplate offices and is particularly well suited to
Govt/Public Sector relocations/consolidation due to existing
occupiers nearby and lower rental values than in the prime core of
City Centre.
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16.2
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RESOLVED: That Cabinet:-
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1.
That Cabinet approve the proposals set out in the report and the
terms of the proposed agreements. In so doing, Cabinet agree not to
terminate the existing agreement with Urbo and Legal & General;
and
2.
That Cabinet delegate authority to the Executive Director Place in
consultation with the Executive Director Resources and the Director
of Legal and Governance to finalise, agree and execute the terms of
the agreements and the terms of any other documentation required to
give effect to the proposals set out in this report and generally
to protect the Council’s interests.
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16.3
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Reasons for Decision
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16.3.1
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The West Bar
Square development is a transformational project that ties together
the northern fringe of the City Centre and Fargate with Kelham and
Castlegate and removes a physical and psychological barrier from
Burngreave to the City Centre.
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16.3.2
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The initial
phases of the development secures £150m of private sector
investment from Legal and General which would be a much needed
boost to the local economy in the current economic
climate.
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16.3.3
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Planning
applications have been submitted for the first phase and could
start on site by the end of this year.
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16.3.4
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The first phase
of the project can generate Business Rate and Council Tax growth
for the Council of approx. £143m with further significant
amounts in future years from the next phases.
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16.3.5
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The requirement
for the Council to take a 40 year lease of Office 1 is not without
risk, however this is mitigated by the very low rent payable to
L&G.
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16.3.6
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The proposed
JESSICA loan reduces the risk further and also reduces the short
term CIF requirement.
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16.3.7
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If the Council
serves the termination notice in April and does not take the lease
then it is highly likely that L&G will not proceed and the
scheme will be stalled for several years.
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16.4
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Alternatives Considered and Rejected
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16.4.1
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The 2020
agreement with Urbo and L&G includes an option for the Council
to terminate the agreement in April this year and pay compensation
towards costs incurred by the other parties. If that was to happen
it is very likely that L&G would also not proceed as the
involvement of the Council is extremely important to their
partnership approach on regeneration schemes such as
this.
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16.4.2
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It would then be
necessary for Urbo to find a new source of development finance. In
the current economic circumstances that will not be
straightforward, but it is possible that the scheme would still
eventually be delivered in more phases over time. However there is
no doubt that this would take considerably longer to achieve than
what is being proposed.
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16.4.3
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If this approach
were to be taken then the significant economic, environmental and
social benefits to the city set out in the report would take much
longer to materialise. The same would apply to the financial
benefits accruing to the Council from new business rates and
Council Tax.
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16.4.4
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The Council
could decide not to take up the JESSICA or SCR Brownfield Housing
Fund monies which have been negotiated. However, the costs to the
Council of securing that funding are low and in terms of what
benefits the funding secures that would not seem a commercially
sensible option.
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16.5
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Any
Interest Declared or Dispensation Granted
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None
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16.6
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Reason for Exemption if Public/Press Excluded During
Consideration
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None
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16.7
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Respective Director Responsible for
Implementation
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Executive
Director of Place
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16.8
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Relevant Scrutiny and Policy Development Committee If Decision
Called In
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Economic and
Environmental Wellbeing
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PDF 364 KB