So who’s going to deliver the Goods?
AN interesting story regarding the levelling up agenda in the Potteries broke last Friday. The Sentinel reported that Stokeon-trent City Council is preparing to borrow up to £41million in order to deliver the flagship Goods Yard proposal in Stoke - to go alongside the £16million that the scheme is to receive from the government’s Levelling Up Fund.
The story startled me as I understood that Capital & Centric are the city council’s development partner, and it would be them that would be leading and delivering the scheme, and – in the main – financing it.
This latest announcement raises a whole host of questions regarding the scheme itself, and indeed the levelling up agenda across the city.
Obviously, I’m not a party to discussions between the city council and Capital & Centric, but the fact that the city council is now in a position where it is considering borrowing tens of millions of pounds towards just one development proposal in isolation may suggest that there has been a shift in the relationship between the two parties. The scheme is starting to look a lot like Smithfield.
We know that a planning application has been submitted and that their excellent community engagement processes have been in overdrive, but these alone aren’t going to build it.
And was the levelling up money secured and predicated on the leverage of significant private sector investment? And if so, where does that leave the city council? Of course, this proposed city council borrowing could be painted as being private sector borrowing if it is coming from the financial markets.
And given the prevailing economic headwinds and the spectre of looming recession, have Capital & Centric agreed an alternative delivery model with the city council, with Capital & Centric taking responsibility for the less risky elements of the scheme, with the city council – possibly through Fortior Homes – doing the heavy lifting? This last scenario is possible.
Back in the late 2000s, I worked on an award-winning scheme in the Bowes Street neighbourhood of Moss Side with Manchester City Council in which the council led and delivered the refurbishment and remodelling of a number of terraced streets, and a number of new build properties.
The council themselves acted as developer, procuring private sector sales and marketing expertise from Miller Homes.
The scheme was seen as innovative and forward-thinking on a number of levels. But it was heavily underpinned with public money.
Given what we know, is this the situation that we find ourselves in with the Goods Yard?
The city council playing developer through Fortior Homes while leaning on Capital & Centric’s dynamic approach to marketing, with them possibly acting as the scheme’s managing agent postcompletion? And where would these leave the non-residential elements?
Given the changing economic conditions, this would be a big risk for the city council unless there was an absolutely watertight case for doing so.
However, on the other hand, they will own the assets and the income streams and capital value associated with them would be theirs.
Another possibility is that the city council will borrow the money, and then will lend to Capital & Centric. This wouldn’t be the first time that a public body has taken such an approach.
However, whether or not it would be a sensible proposition is another question, and if this was to be the case, what would it say about actual private sector investment in the scheme.
And, of course, as was pointed out in Phil Corrigan’s story on Friday, the council may end up borrowing nothing, if the scheme is fully funded by the private sector.
A cynic may say that whatever the position may be, this new approach from the city council is simply designed to guarantee a start-on-site before the local elections in May 2023.
The Goods Yard has captured the imagination of a lot of people locally but it needs to be delivered in a manner that is appropriate for the site, and in a way that is robust enough to protect the city council.