Beach haul Bournemouth council is hoping for a flood of applicants to regenerate 16 sites over 25 years. Is it being realistic? asks Nadia Elghamry
It is crunch time for Bournemouth council’s grand regeneration plans.
Last week, the council’s deadline for submissions from private sector partners for its local asset-backed vehicle expired. It was hoping for a flood of applications, but the property industry has been left wondering just whowill be willing to stump up cash and expertise to support the proposed 25-year overhaul of the seaside town.
The council, which will place its own assets into the vehicle and seek a development partner to match the contribution, faces plummeting land values, a paralysed finance market and local occupiers heavily reliant on the fragile financial sector and tourism industry.
Notable heavyweight developers have put plans on ice. These include X-Leisure, which pulled proposals for its £50m West Central project on Exeter Road in July, while McAleer & Rushe’s mixed-use St Paul’s Square scheme remainsa car park. So how successful will the council be in securing a development partner?
The council put a notice in the Official Journal of the European Union in September offering 16 town centresites for the project (see below). A private sector partner will be selected next June.
But will the council will be able to secure a companywiththe muscle to support itsplans. Bill Parker, managing director of Goadsby, says: “It’s got to be someone with mixed skills, both residential and commercial, and there are very few of those about.”
Others go further. One property player who asked not to be named called for the council to prioritise sites and offer developers concessions as well as guarantees of speed. “If someone does come along with a scheme, will the council move quickly? Otherwise, by the time they’ve been through the processes, the market will have changed,” he says.
Alastair Warwick-Smith,director of investment at Goadsby, says some organisations have got the necessary resources, but adds: “They are few and far between.The majority of people in the market are very conscious of tying up capital in one project, and the reality is you wouldn’t want to deliver everything onto the market at the same time. The market takes time to digest things,one bit at a time.”
Commentators are reticent to go on the record, but most believe the council has failed, in the past, to factor in these issues.They point to the St Paul’s Square scheme, where they say the council forbade McAleer & Rushe from moving ahead with other uses until it had made a start on the 100,000 sq ft office element.
The developer has been trying to make the development workand, in June, it lodged an amended planning application to build a 10-storey hotel on the footprint of a previously approved 14-storey residential block. The council has deferred a decision, but there is evidence that its stance is softening. McAleer & Rushe was unavailable to comment.
“We’d all like to see updated office accommodation in Bournemouth, but there needsto be sweeteners in terms of more valuable uses,” says Simon West of local agent Cowling West.He admits, however:”The alternative uses are all struggling.”
West says that the council seems committed to putting all its regenerationsites into one pot. “It then wants a developer to chuck the equivalent sum of money in. I can’t see residential developers prepared to go down that route,” he says.
The council must also address the problem of falling land values. The value of the assets the council puts in to the project is directly linked to the benefits it can expect from a private sector partner.
West says: “Some of the valuations of the assets aren’t where they were. People’s views are pretty jaundiced.”
Last year, the council valued the town centre sites it has earmarked for redevelopment at £60m. Since then, agents estimate prices have fallen 40%, so the figure could be nearer to £35m.
Bournemouth council’s deputy leader, John Beesley, bats the issue aside. “The market was never going to be the same as we envisaged, and there are mechanisms in place to reflect that,” he says. Hesays the £60m figure is a “bit of a stab”, as no one would claim to be able predict values over 15years.
“The sum was merely to give the private sector a ballpark idea of the size of the regeneration,” he says.”It’s a long-term project, and the industry will probably go through another couple of recessions in that time.”
The council has taken more than two and a half years to set out its regeneration stall – one, Beesley says, that will change as the list of sites and ambitions broaden.
He points to Westover road, where there might be an opportunity to relocate the Odeon cinema. “Things will happen in the private sector, and other sites might become available. I’m confident we’ll be able to acquire sites without a CPO,” he says.
Headds that interest in the project has been registered from “all the plcs you might expect”.
Gems among the car parks
Most of the council’s assets are surface car parks, but a few gems are generating interest with local property players.
Among them is the former Winter Gardens theatre site. This, says Bill Parker, managing director of Goadsby, is one of the better sites. “You can get some wins on the hotel sector at the moment. But, if it’s residential, I can’t see anyone speculatively developing.”
The Winter Gardens could eventually be linked to another plum site on Westover Road.
The council has indicated that it is keen to open this up to the Gardens, thinning trees and replacing the busy thoroughfare with a tree-lined boulevard. However, at present, the site is still home to the Odeon cinema, which was due to relocate into X-Leisure’s abandoned West Central project.
Deputy leader of Bournemouth council John Beesley is keen to see retail form a big part of the regeneration, although he admits that now may not be the time to do it.
He wants to stop the leakage out of Bournemouth, but admits this means the centre will need to look at niche shopping as much as flagship and could involve dividing the square in the middle of the town centre.
