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16.1
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To provide 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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