Grosvenor Centre – Time to accept the reality?

Grosvenor Centre - NON -Redevelopment?
Grosvenor Centre – NON redevelopment?

Grosvenor Centre – Time to accept the reality?

I have written a number of times about the lack of progress by Legal and General in delivering the promised, and promised, and promised, and promised, Grosvenor Centre redevelopment.

Having over the past 10 years during 6 years of Conservative and 4 years of Liberal Democrat control of the Borough Council we have seen excuse after excuse from Legal and General of why they haven’t delivered the Grosvenor Centre extension.

It has now reached the stage when the “we remain fully committed to Northampton” rhetoric has to be taken as what it is, an ongoing repetitive delaying tactic to avoid what many people now believe is the truth.

That Legal and General will continue to look for any excuse not to deliver.

I don’t know what the Northampton Conservative Leader did in May 2012 to cause Legal and General to stop work on the single most important £250 million regeneration project only a fortnight after they had briefed all Councillors that it was going ahead and would be completed by May 2014.

The reason given by Legal and General was that they had not “received support from the Borough Council in recent times” suggesting that there had been a complete breakdown in trust and communication between the Leader, the Cabinet Member responsible for regeneration and Legal and General.

The breakdown was clearly demonstrated when during a BBC Northampton radio interview and in response to a statement by the interviewer that “we are trying to contact Legal and General for a statement”, Cllr Mackintosh the Conservative Leader of the Council said,

“Good luck with that because I haven’t been able to talk to them and don’t know what’s happened”

It was an amazing statement that he and presumably by his silence Cllr Tim Hadland the Cabinet Member responsible for regeneration didn’t know or at least claimed that they didn’t know that there was a problem.

The problems were then exacerbated by the ludicrous statement by Cllr Mackintosh in his attempt to point the finger of blame at Legal and General that if they didn’t go ahead with the development he would personally take charge and offer the Greyfriars Bus Station site to another developer.

It was a statement that must have had Legal and General holding their ribs for fear of them cracking as the gwaffed with laughter at his naivety.

Surely he hadn’t forgotten what all Councillors and especially those of us who have been around for the past 10 years know only too well about what the Development Agreement. contains, and in particular two very important clauses.

‘That Legal and General can delay the redevelopment of the Grosvenor Centre for up to two years and then that it would only go ahead if they believe it to be economically viable’, and,

‘ that as part of the agreement Legal and General have sole rights to redevelop the Greyfriars Bus Station site and would pay for the demolition of the Bus Station if they went ahead with the redevelopment’.

In other words the statements about finding another developer as I pointed out at the time was intentionally misleading, a charge that was emphatically denied by Cllr Mackintosh.

I’m sure that if they could the Northampton Conservative Leadership would hope to be able to follow the lead of their Westminster Conservatives and delete statements from the public record.

Luckily they can’t.

Which bring us to the problems that their latest decision to demolish the Greyfrairs Bus Station raises for the taxpayer and Council.

Having closed the Grey Friars Bus Station with the fanfare of taking very opportunity it offered for him to have a photo opportunity Cllr Mackintosh has of course no option but to either commit to its continuing maintenance or its demolition.

I don’t think anyone would disagree that because of the decisions taken the only sensible option is its demolition.

What raises concerns is that this point has been arrived at because of the Northampton Conservatives incompetent management of the proposed Grosvenor Centre redevelopment and Town Centre regeneration.

In the report justifying the decision for the Northampton taxpayers to pay for the demolition the Conservatives once again have used the excuse that it would have cost £30 million to refurbish the building including the offices, car park and bus station.

What they fail to say is that over 40 years the investment would have brought an estimated £780 million to the Town Centre.

Simply put, one of the options available to the Council was to save the £12 million on building a new bus interchange, £4 million on the demolition costs and the millions of pounds on the NCC Project Angel proposals and refurbish the Bus Station.

In fact the option of a £30 million investment included providing high quality office space for up to 850 people who would have more than accommodated the County Council staff with the added benefit that the 300 car parking spaces would have been brought back into use.

Conservative incompetence has handed the initiative to Legal and General
Conservative incompetence has handed the initiative to Legal and General

What the Northampton Conservatives are running scared of revealing is that in pursuing a policy of self-interest and individual self-promotion they have left Northampton with only one option, which was to hand the whole initiative to Legal and General.

I actually raised the issue of the Grey Friars future in January and the answers I received now make very interesting and I would suggest telling reading,

In answer to my query,

“During the demolition period what will be the impact on current car parking and businesses within the Grosvenor Centre I received the following answer”,

“For each method of demolition there would be an impact on the highway network. The Traditional approach (9 months duration) would be less onerous than the Structural Deconstruction (12 months duration) which would require repeated road closures for the high level working. The use of explosive (11 months duration) would require an extensive exclusion zone which includes the evacuation of all commercial and residential properties but it is not an option the Council would consider using. The demolition of the Bus Station, in accordance with the development Agreement, is the responsibility of Legal and General, with this in mind, it is assumed they would manage the demolition to ensure minimal inconvenience to their customers”.

It is clear from the answer that those of us who warned of the dangers of committing the Council to a course of action that handed the total initiative to Legal and General, warnings that were dismissed as being alarmist by Cllr Mackintosh, have now sadly come to be reality.

This is emphasised in the report by the professionals in the recent Council report when they say that,

The demolition of the Greyfriars complex by this Council may require a variation of the existing Development Agreement with Legal and General plc.  The financial basis of the proposed transfer of certain Council property assets to Legal & General was calculated having regard to a number of matters,

Therein lies the problem, that. having given control to Legal and General why would they renegotiate terms that would be less advantageous to them?

There is now an increasing sense of concern amongst the professionals on the Borough Council as is highlighted in their consideration of the risk involved which I have included below.

4.2 Resources and Risk

4.2.1   The addition of £4 million to the Council’s borrowing commitments will lead to
new revenue liabilities. These revenue costs may be mitigated, in whole or
part, by a capital receipt generated from disposal of the cleared land for re-
development. However, if no development was able to be achieved as a result of this demolition (consistent with recognised definitions of valid capital
expenditure), then the entire expenditure would have to be treated as revenue. Were this were to occur, it would have serious and unplanned negative
consequences for the overall revenue budget of this Council.

4.2.2  There is the risk that the costs of the demolition contract may exceed the £4
million estimated. This would necessitate an additional inclusion of further
expenditure within the capital programme for 2013/14 and 2014/15, with likely
further revenue cost consequences of servicing debt.

4.2.3  The early demolition of the existing structure would eliminate holding
(revenue) costs that might otherwise be incurred. This could help to meet
some limited part of the repayment costs of the capital borrowing. However,
the net revenue savings made by this Council from the closure of the existing
bus station and the opening of the new bus facilities has already been taken
into account, in the borrowing approved to construct the new bus station.

4.2.4  The demolition contract negotiated with the Framework contractor will be a
procured on lump sum basis to help minimise the financial risk to the Council.
There may still though be a need to instruct variations on site, given the
complexity of the project. The actual costs may therefore still vary from that
initially agreed.

As I said before, having been so incompetent in their negotiations with Legal and General and reneging  on the promise to deliver the Grosvenor redevelopment or walk away the Northampton Conservatives have committed not them, not the Council but the Northampton taxpayer to paying the bill.

It is a bill that will take at least a minimum of £4 million out of the taxes we all pay towards providing essential services.

I wonder how and who Cllr Mackintosh will blame?

With their record of prevarication it may be time for everyone to recognise that if it wasn’t ASDA at the Saints, or retail development at Sixfields, or Rushden Lakes, it will be something else that Legal and General will find as an excuse for not going ahead with the Grosvenor Centre redevelopment.

It is time to move on and concentrate on working with those businesses that have remained in and committed to Northampton.

The stark alternative is to continue to see the Town Centre decline and as we have seen in the last year people walking away and spending their money elsewhere.