GO-AHEAD FOR NEXT STAGE OF FRIARGATE
A PROPOSAL to borrow £17m to help fund the next stage of the Friargate scheme has been rubber stamped by city councillors.
At a meeting of the city councill cabinet, the brand new office block scheme was described as a “visible symbol” of Coventry’s economic resilience.
Cabinet members were asked to approve plans to borrow £17m to fund the grant of a 250 year leasehold of the land and delivery of the 12-storey building, named Two Friargate.
The meeting heard that the building had been valued at £68m, but £51.2m will be provided by a grant from the West Midlands combined authority. The £17m sum requested to be borrowed will make up the shortfall.
Cabinet also approved a request to make available £750,000 to ensure that the JV Company - which is half owned by the council - to promote the scheme to investors and secure development. The other shareholder will match the amount.
The funding will next be discussed at a meeting of full council on September 8.
Two Friargate is the second part of a multimillion pound scheme to regenerate the Friargate area of Coventry.
Presenting the report, Cllr Jim O’boyle, cabinet member for jobs and regeneration, said the first part of the scheme has already been a success with two tenants - the Financial Ombudsman Service and Homes England.
Other negotiations are taking place for additional tenants, he told the virtual meeting. Two Friargate will contain 134,000 square foot of “state of the art office space” as well as a ground floor cafe or restaurant. Work is hoped to begin in October and finish in summer 2022, and the scheme is expected to create 700 jobs during the construction phase.
The scheme was largely welcomed by councillors at the meeting - although some concerns were voiced.
Cllr Gary Ridley, who attends Cabinet meetings as a non-voting representative of the Conservative party, said that, while he is keen to get behind the project, “it would be remiss of me not to say I have concerns about the state of the market.”
He added: “Could coronavirus mean more people working from home? If that’s not a problem for this development it might be a problem for the Friargate project overall. We do not know what it will look like in the future.”
Misgivings were also heard about the amount of money being borrowed - although on balance it was agreed the benefits of the scheme would be worth it.
Cllr John Mutton, Cabinet member for strategic finance and resources, said: “One thing I hate doing is borrowing money because of the interest repayable on it, but in this instance the amount we are borrowing is miniscule to the amount we will get back in rent and business rates.”
Cllr O’boyle said: “We need to prepare for whatever comes of Covid going forward. If we sit back and do nothing our economy will decline. If we don’t invest in our city we will go backwards.
“Taxpayers in Coventry will get a big return on this. It’s a vote of confidence in our city.”
Adam Hunt, the council’s head of property and development, echoed the sentiment.
He said: “The delivery of this building will be a visible symbol as we move forward from the impact of Covid-19.”