Friday, 27 July 2012

Greens warn on dangers of Centros deal; developer absorbed by 'Sovereign Land'

Lancaster's Green Party have hit out at the City Council's continued support for developer Centros, who have recently re-submitted new plans for Lancaster's Canal Corridor area.

The Greens voted against accepting an extension to a development agreement with Centros at Full Council last week, which the City Council has described as offering a "renaissance" in Lancaster's fortunes.

The Greens argue the development may prove quite the reverse, basing their arguments in part on the experiences of councils elsewhere in the UK who have had dealings with Centros.

Centros development projects in the UK include the Arc Shopping Centre in Bury St Edmunds and N1 Islington, London and, as well as Lancaster, the company is the appointed developer on Portsmouth Northern Quarter.

"Whatever we may think of the scheme to develop the Canal Corridor, we believe that this is a bad financial deal for local council taxpayers which may only prolong the dereliction on the site," spokesperson Ceri Mumford told virtual-lancaster.

"Firstly, the city council will lose income on the site, at a time when it is also losing a great deal of funding from central government. It will be hard enough to protect front-line services and avoid council tax rises, without losing a significant source of income for very little return. It is a materially worse deal for the taxpayer than the original 2006 agreement.

"Secondly, the details of the deal itself are still being negotiated – the vote to accept the extension of the development agreement was an act of blind faith, not a considered appraisal of a completed document.

"Thirdly, tying the council to this deal makes it impossible to develop other smaller-scale, more easily deliverable opportunities, like affordable housing, on parts of the site.

"Earlier this year, Centros acknowledged that the Canal Corridor redevelopment is not financially viable and that the company would not build in the current property market until rents rise," she added. "Setting aside the mixed messages now being given, in reality there is a strong risk that Lancaster ends up in the same position as Portsmouth council: all shiny optimism and new masterplans, but no action on the ground and ever more time extensions being sought by Centros."

Developer Centros is now owned largely by Sovereign Land, who announced they had bought the development management company Centros from investor clients of Delancey. The company says this will create "a major new force in retail property development with a stable of projects across the UK".

Sovereign Land tends to act as a developer, investing alongside its development partners. Its projects include a new project in Witney in Oxfordshire, while continuing to work on its existing centres in Ayr, Cardiff and Wakefield.

“We are really excited about this deal," commented Chris Geaves of Sovereign Land earlier this month. "It provides for a well-balanced and interesting business, with huge expertise. The Centros business has a very experienced team with a strong existing client base.

"We aim to grow the development management/asset management side of the business across the whole retail sector, while Sovereign maintains its appetite for new development and investment propositions across the sector with its investing partners. The merged group will have great strength in depth."

1 comment:

Anonymous said...

Three cheers for the evidence based approach to evaluating the proposal. It appears that Labour just took the headline offer of more jobs and failed to look at the small print. The fact is we have no confidence in this council negotiating professionally to secure the best deal for the city. Their record from Blobby to the Storey via the Market is a catalogue of disasters and without providing a compelling case we citizens are asked to support a company whose regeneration record is very poor and where other LA's have repented at leisure after entering into partnership with them. Think again and think very hard before inviting them in to Lancaster.