Agenda item

The Leader of the Council, Councillor Simon Tagg introduced a report and moved the recommendations providing an update on the Astley Place, Midway Car Park and Ryecroft developments in the town centre and to agree a contract award for the three projects.

The three projects represented a combined investment of over £85m in committing to create a vibrant, thriving town centre.

The former York Place site was now partially demolished paving the way for the new development.  The Midway car park was now ready to be repurposed and redeveloped and the Ryecroft was earmarked for housing and a hotel.

Financing for the developments was structured to ensure cost certainty and minimised financial impact of the Council, building on the Future High Street and Town Deal Funds.  A short term financing model coupled with a buy-back agreement was detailed in the agenda report which limited the Council’s borrowing to the duration of the building phase. 

Councillor Sweeney seconded the recommendations and reserved his right to speak.

Councillor Stubbs stated that the redevelopment would inject new life into the town centre and create much needed economic revitalisation.  The projects would provide enhanced urban living and the amenities would create an attractive and convenient living environment.   The proposed financial model, involving short term borrowing would significantly reduce interest costs.  However, there were still financial risks as the Council would need to secure substantial funding up-front and any delays could strain the Council’s financial resources. In addition, the reliance on external grants introduced a level of uncertainty.  There would also be disruption in the town centre during the construction phase.  Councillor Stubbs stated that it was important to note that the three developments would result in a reduction of the Council’s asset base.

Councillor Paul Waring welcomed Capital&Centric’s approach to retaining and re-engineering the existing structures which was a good example of sustainable development.  The funding model was innovative and was an excellent example of how public sector funding could go hand in hand with private sector funding.

Councillor Gorton raised a question on paragraph 2.16 of the report which stated that Capital&Centric were currently in discussion with Homes England regarding a grant from their BIL programme to subsidise some of the project costs.  He asked, how confident was the Council that the funding from the BIL programme would be secured and was there an alternative plan should the decision go against or less than was hoped was received.

Councillor Parker welcomed the fact that Joules Brewery would incorporate a live music venue into the Astley Place development adding a vibrant and cultural element to the project and compliment the already thriving night-life in the town.

Councillor Sweeney stated that the Council was not reliant on the Homes England funding;  it would be a bonus if it was received.  It was an exciting project and the funding model was good.  The Council financed everything and after Capital&Centric have completed building, they pay all of the money back to the Council including any interest and if the market value was higher.

Councillor Richards asked if adequate contingencies been put in place due to the economic climate and cost of materials.

Councillor Holland stated that he would much rather see the Ryecroft and former Civic offices sites redeveloped than sitting on the Council’s assets book doing nothing.  He had great confidence in Capital&Centric having seen some of their other work.

In summing up, the Leader stated that the development was not reliant on the Homes England bid being successful. Regarding disruption in the town during construction, the Council had a good record of the works going on to date with disruption at a minimum. 

A comment had been raised as to whether too many properties were being built and wouldn’t be taken up.  The Local Plan, currently being inspected included a commitment to build on brownfield sites and there was the requirement from the Government to build houses. 

Resolved:    (i)       That the progress made to date by Capital&Centric on the

partially demolished Astley Place development project in Newcastle Town Centre, be noted.

(ii)      That the progress made to date by Capital&Centric on the

Midway Car Park development project in Newcastle Town Centre, be noted.

(iii)      That the progress made to date by Capital&Centric on the

Ryecroft development project on Newcastle Town Centre, be noted.

(iv)     That expenditure of up to (either £18,213,758 in total or

£16,111,895 minus costs already approved) be approved to complete the Astley Place scheme to practical completion in readiness for occupation.

(v)      That expenditure of up to (either £37,518,885 or

£35,954,885 minus costs already approved) be approved to complete the Midway scheme to practical completion in readiness for occupation.

(vi)     That expenditure of up to (£34,444,256 or £33,131,668

minus costs already approved) be approved to complete the Ryecroft scheme to practical completion in readiness for occupation

(vi)     That the Deputy Chief Executive, in consultation with the

Portfolio Holder for Finance, Town Centres and Growth, and Portfolio Holder for One Council, People and Partnerships, be authorised to progress legal agreements, subject to planning approval, to enable the appointment of Capital&Centric under a Development Services Agreements (DSA) for the development of all three schemes through a direct award under the Pagabo Development Management Framework;

(viii)    That the Deputy Chief Executive, in consultation with the

Portfolio Holder for Finance, Town Centres and Growth, and Portfolio Holder for One Council, People and Partnerships, be authorised to progress the legal agreement for the ‘buy back’ of the schemes by Capital&Centric upon completion of the developments.

(ix)     That the Deputy Chief Executive, in consultation with the Portfolio Holder for Finance, Town Centres and Growth, be authorised to progress the legal agreements with Homes England to accept a grant as a subsidy for the development and become the accountable body for the grant, subject to Homes England approving the grant.

Watch the debate here