Agenda item

5.1

The Council acquired the former Cole Brothers Building from John Lewis in January 2022 and marketed it through external agents CBRE from May 2022. This report informs Committee of the very exciting outcome of this marketing and recommends a preferred bidder to take forward with detailed negotiations

5.2

RESOLVED UNANIMOUSLY: That Strategy and Resources Policy Committee:-

(a) notes the outcome of the marketing exercise conducted in respect of the former Cole Brothers Building by CBRE on behalf of the Council and notes the outline of the preferred bid as set out in this report;

(b) endorses proceeding with proposed scheme (Option 1) as set out in Parts 1

and 2 of this report and a conditional agreement for a 250-year lease of the Cole Brothers Building;

(c) notes that when further discussions have better particularised the lease terms, a further report will be brought to this Committee as soon as is reasonably practicable for a further decision; and

(d) notes that as well as the preferred bid, the Council received a number of other credible bids and thank all bidders for their interest and endorses discussing alternative opportunities within the city which they may be interested in pursuing.

5.3

Reasons for Decision

5.3.1

The proposed agreement for lease to the preferred bidder will result in the delivery of an exciting mixed-use scheme comprising flexible workspace and cafes/retail/leisure/cultural uses/event space which are all considered to be complementary uses to the rest of the Heart of the City project. The scheme will create space for new jobs, places to shop, eat and visit and will help to increase the vibrancy and attractiveness of the city centre for residents and visitors.

5.3.2

The bidder has a strong track record of working with many public sector parties. The proposed project team have redeveloped many challenging and listed buildings, including both historic and post-war structures.

5.3.3

Bringing this vacant listed building back into active use will be hugely beneficial both for the wider city centre and the surrounding Heart of the City Scheme. Retaining the large majority of the structure, whilst improving the thermal performance of the building, should have a positive impact on climate change.

5.3.4

The building was openly marketed over a significant period of time and the preferred bidder submitted the highest financial offer.

5.4

Alternatives Considered and Rejected

5.4.1

The summary report annexed to the Part 2 report explains why the preferred

bidder is being recommended to progress with rather than the other bidders.

5.4.2

As stated in the previous reports to this Committee in August 22 and March 23,

the Council could decide not to progress with a disposal of the building at the

present time. However, to do so would lead to further delays and uncertainty

around what is an important building for the regeneration of the city centre and

of a lot of interest from many people both within and outside of Sheffield. There

is also a risk that developers currently interested in the scheme could withdraw.

5.4.3

Retaining the building without securing its redevelopment will have financial implications for the Council both in vacant property management, security and holding costs and in potential blight suppressing values and interest in the surrounding property and the Heart of the City Scheme.

5.1

The Executive Director City Futures submitted a report setting out details of a proposed agreement for the lease of the former Cole Brothers Building.

The Council acquired the former Cole Brothers Building from John Lewis in January 2022 and marketed it through external agents CBRE from May 2022. This report informs Committee of the very exciting outcome of this marketing and recommends a preferred bidder to take forward with detailed negotiations.

During consideration of this item of business, and in order for Members of the Committee to ask questions on Appendix 1 and Appendix 2 of the report, it was RESOLVED: That the public and press be excluded from the meeting and the webcast be paused before further discussion takes place on the grounds that, in view of the nature of the business to be transacted, if those persons were present, there would be a disclosure to them of exempt information as described in paragraph 3 of Schedule 12A to the Local Government Act 1972, as amended. 

The meeting was re-opened to the public and press, and the webcast was recommenced, prior to the decision being taken by the Committee. 

5.2

RESOLVED UNANIMOUSLY: That Strategy and Resources Policy Committee:-

(a) notes the outcome of the marketing exercise conducted in respect of the former Cole Brothers Building by CBRE on behalf of the Council and notes the outline of the preferred bid as set out in this report;

(b) endorses proceeding with proposed scheme (Option 1) as set out in Parts 1

and 2 of this report and a conditional agreement for a 250-year lease of the Cole Brothers Building;

(c) notes that when further discussions have better particularised the lease terms, a further report will be brought to this Committee as soon as is reasonably practicable for a further decision; and

(d) notes that as well as the preferred bid, the Council received a number of other credible bids and thank all bidders for their interest and endorses discussing alternative opportunities within the city which they may be interested in pursuing.

5.3

Reasons for Decision

5.3.1

The proposed agreement for lease to the preferred bidder will result in the delivery of an exciting mixed-use scheme comprising flexible workspace and cafes/retail/leisure/cultural uses/event space which are all considered to be complementary uses to the rest of the Heart of the City project. The scheme will create space for new jobs, places to shop, eat and visit and will help to increase the vibrancy and attractiveness of the city centre for residents and visitors.

5.3.2

The bidder has a strong track record of working with many public sector parties. The proposed project team have redeveloped many challenging and listed buildings, including both historic and post-war structures.

5.3.3

Bringing this vacant listed building back into active use will be hugely beneficial both for the wider city centre and the surrounding Heart of the City Scheme. Retaining the large majority of the structure, whilst improving the thermal performance of the building, should have a positive impact on climate change.

5.3.4

The building was openly marketed over a significant period of time and the preferred bidder submitted the highest financial offer.

5.4

Alternatives Considered and Rejected

5.4.1

The summary report annexed to the Part 2 report explains why the preferred

bidder is being recommended to progress with rather than the other bidders.

5.4.2

As stated in the previous reports to this Committee in August 22 and March 23,

the Council could decide not to progress with a disposal of the building at the

present time. However, to do so would lead to further delays and uncertainty

around what is an important building for the regeneration of the city centre and

of a lot of interest from many people both within and outside of Sheffield. There

is also a risk that developers currently interested in the scheme could withdraw.

5.4.3

Retaining the building without securing its redevelopment will have financial implications for the Council both in vacant property management, security and holding costs and in potential blight suppressing values and interest in the surrounding property and the Heart of the City Scheme.