Dundee makes in­vest­ment bid

The Herald - - NEWS - SCOTT WRIGHT DEPUTY BUSI­NESS ED­I­TOR

DUNDEE’S £1 bil­lion Water­front re­gen­er­a­tion has moved into its “real phase”, one of its prime movers has claimed, with efforts now be­ing stepped up to stim­u­late the next wave of in­vest­ment in the am­bi­tious project.

The pub­lic-pri­vate project was con­ceived around two decades ago to trans­form the city’s eco­nomic for­tunes through a mix of heavy pub­lic and pri­vate sec­tor in­vest­ment, spear­headed by pres­ti­gious out­post for the V&A Mu­seum at the heart of the river­side.

Phase one of the project is close to com­ple­tion, with work on the new V&A and railway sta­tion al­most com­plete, and 240 acres of mixed use de­vel­op­ment op­por­tu­ni­ties opened up on the water­front area.

With that in­fra­struc­ture in place, Mike Gal­loway, ex­ec­u­tive di­rec­tor of city de­vel­op­ment at Dundee City Coun­cil, said the fo­cus now is on at­tract­ing pri­vate in­vestors to move into the river­side. Such in­vest­ment, which will range from ho­tels to high-qual­ity built-to-rent flats, is cru­cial to the city’s hopes of pro­vid­ing an eco­nomic boost to Dundee aris­ing from the Water­front project.

Mr Gal­loway said: “I think we’re into the real phase now of the project. We’ve cre­ated the con­text. We’ve got those big, land­mark, sig­na­ture build­ings com­plete, and it’s now get­ting into the real meat of cre­at­ing the jobs and the ac­tiv­ity in the area.”

While the needs of the pub­lic and pri­vate sec­tors can of­ten clash, Mr Gal­loway said they have found com­mon pur­pose in Dundee. He noted: “I think we recog­nised right at the be­gin­ning of the project, which is nearly 20 years ago now, that we had com­plete and to­tal mar­ket fail­ure in the water­front area, and per­haps you could ar­gue beyond that in the Dundee mar­ket gen­er­ally.

“There was a num­ber of op­por­tu­ni­ties, but the pri­vate sec­tor wasn’t re­ally tak­ing those up. We felt what was nec­es­sary was the pub­lic sec­tor to in­ter­vene, to tackle fun­da­men­tal issues in terms of in­fra­struc­ture and in terms of im­age and cer­tainty.

“On the back of that, what was based on a very strong mas­ter-plan­ning process, we have been able to grad­u­ally change the im­pres­sion of Dundee as a place to in­vest amongst the pri­vate sec­tor.”

Mr Gal­loway added: “The mas­ter­plan al­lowed them to un­der­stand where they sat within an over­all con­text.”

Around half of the £1bn ex­pected to be poured into the re­gen­er­a­tion will be fo­cused on the water­front area. Sig­nif­i­cant strides have al­ready been taken to es­tab­lish the port as a cen­tre of ex­cel­lence for North Sea oil and gas com­mis­sion­ing work, as well as a cen­tre for de­ploy­ing off­shore wind in­fra­struc­ture.

Mr Gal­loway re­ported a “level of de­vel­oper and in­vestor in­ter­est” in each of the plots.

He said: “What we are try­ing to do, and I think it is the main task left for us now, is to man­age the process of how we de­liver that de­vel­op­ment in­ter­est be­cause not all of it can hap­pen at the same time. We would flood the mar­ket, and self-de­feat­ing ac­tion like that is some­thing we are de­ter­mined not to man­age.”

The ini­tial de­vel­op­ment fo­cus, he said, is on two sites – plots two and six. Both are ad­ja­cent to the railway sta­tion and one, which is be­side the V&A build­ing, has an of­fice block un­der con­struc­tion. It will be com­pleted by next spring.

“We are in ad­vanced ne­go­ti­a­tions with Mar­riott, for an up­scale ho­tel di­rectly op­po­site the V&A it­self, and then the re­main­der of site six will be res­i­den­tial apart­ments,” Mr Gal­loway said. “Again, we have a part­ner there in Edi­son. We are in the last throes of the dis­cus­sion to sell then that site.”

As re­gards the other site in ini­tial fo­cus, a joint ven­ture has been formed with Our En­ter­prise Lim­ited for a mixed-use de­vel­op­ment, in­clud­ing build to rent hous­ing for young pro­fes­sion­als. “It will be the first PRS (pri­vate rental scheme) de­vel­op­ment in Dundee,” Mr Gal­loway said, adding that the space will also in­clude of­fices and an in­cu­ba­tor hub for busi­nesses in the cre­ative sec­tor.

“Cre­ative in­dus­tries are one of the main sec­tors, we be­lieve, for Dundee’s fu­ture econ­omy,” Mr Gal­loway said. “What we want to do is help those busi­nesses to form and to grow.”

Mr Gal­loway used an air traf­fic anal­ogy to de­scribe the process of man­ag­ing the in­vest­ment process, ex­plain­ing that sub­se­quent sites will be brought into play as progress is made on the sites un­der de­vel­op­ment.

Asked why Dundee has backed PRS de­vel­op­ment when there have been sug­ges­tions that the model has been op­posed by other cities, he replied: “We see it as be­ing po­ten­tially very im­por­tant to the city. Our econ­omy is now a knowl­edge-based econ­omy, rather than an in­dus­trial econ­omy. Our two uni­ver­si­ties are hugely im­por­tant; we have got 40,000 full-time stu­dents in the city, and the vast ma­jor­ity when they grad­u­ate leave the city and go else­where.

“We would like to try and keep as many them as we can and get them to form new busi­nesses and grow. One of the things we need to do is part of that per­sua­sion process is not only to pro­vide job ad busi­ness op­por­tu­ni­ties, but also the right type of hous­ing for these young pro­fes­sion­als and busi­ness peo­ple, and PRS seems to be some­thing that has been very suc­cess­ful in achiev­ing that in ma­jor cities in Eng­land. [In] Manch­ester, Birm­ing­ham, these sort of cities, PRS has been fun­da­men­tal in cre­at­ing that ur­ban pro­fes­sional that we would want to de­velop in Dundee.

“It does mean you are cre­at­ing a life­style choice, be­cause they tend to be smaller in the pri­vate space but larger, more gen­er­ous in their pub­lic space. But you are pay­ing a rental pre­mium for that be­cause of the high level of ser­vice and main­te­nance as part of that pack­age.”

He added that there are cur­rently two PRS projects in the pipe­line for Dundee, which he would like to see de­liv­ered. “We’re quite op­ti­mistic about PRS, per­haps that marks us slightly dif­fer­ently from the cen­tral belt cities,” Mr Gal­loway said.

Asked whether the project has given the peo­ple of Dundee a lift, he said: “Very def­i­nitely. I think peo­ple now ac­tu­ally be­lieve us. We have been say­ing for 20 years we were go­ing to de­liver this kind of re­gen­er­a­tion. Dun­do­nians now be­lieve it is go­ing to be de­liv­ered.

“The most im­por­tant thing, and the is­sue up­per­most in their minds now, is how do we en­sure that ev­ery­one in the city ben­e­fits from this process. There is ab­so­lutely no point in us bring­ing well-paid jobs into the city if Dun­do­nians are not get­ting ac­cess to them, if that re­gen­er­a­tion doesn’t touch some of our most dis­ad­van­taged com­mu­nity else­where in the city.

“We are spend­ing a con­sid­er­able amount of time and ef­fort to en­sure that it’s a deep­rooted re­gen­er­a­tion. For ex­am­ple, all of the de­vel­op­ments that are oc­cur­ring in the cen­tral water­front, we have com­mit­ted our­selves [to en­sur­ing] that will pay the Liv­ing Wage. Now that isn’t just dur­ing their con­struc­tion, but also the busi­nesses that will oc­cupy them.”

He also noted that the re­cruit­ment of staff will be done through lo­cal em­ploy­ment ini­tia­tives.

„ A view of the Tay Bridge across the Firth of Tay in Dundee. It is hoped the mas­sive £1bn re­gen­er­a­tion of the Water­front area will trans­form the city’s eco­nomic for­tunes.

„ Work on the stun­ning new V&A, de­signed by Kengo Kuma is al­most com­plete.

„ Mike Gal­loway wants pri­vate in­vest­ment.

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