On Monday evening (29 January), the government’s long-awaited review into “corruption, wrongdoing and illegality” surrounding the disposal of public assets at Teesside Freeport was published, with both sides claiming a partial victory.
The Conservatives were cheered by the review’s rejection of the corruption charge, while Labour felt it vindicated its concerns around governance, oversight and value for money.
At its core was a deal in which Tees Valley mayor Ben Houchen, in his capacity as chair of the South Tees Development Corporation, awarded 90% control of a 2,500-acre former steelworks site to local developers Chris Musgrave and Martin Corney for just £100.
The report made 28 recommendations which it said were vital to ensure value for money and an acceptable level of transparency. It remains to be seen whether Labour will pass the matter on to the National Audit Office if the party regains power at the next general election.
One man who has lost little sleep on the issue is John Taylor, founder and director of Middlesbrough agency Parker Barras. Teesside and politics have been inextricably linked since the election of Houchen as metro mayor in 2017, making him the only elected Conservative mayor in the north of England and, subsequently, something of a poster boy for the levelling-up initiative.
“It’s like anything,” says Taylor, who essentially views the situation as a case of sour grapes. “When someone is doing so well, and the area is doing so well, someone looks to try and tarnish his name and bring him down. But the facts and figures of what’s going on at the moment, you can’t hide that.”
Game changer
The sums being spent in Teesside certainly cannot be hidden. More than £560m of public funds have gone into the creation of the UK’s biggest freeport, most of which is located in a coastal area to the south of the Tees; it also includes an area around the airport, west of Middlesbrough, where an 818-acre business and logistics park is being developed.
Public funding is also behind the transformation of Stockton-on-Tees, where a monolithic 1970s shopping centre is being bulldozed to create a new town centre based around riverside public realm. Meanwhile, the Treasury is in the process of creating 1,400 jobs in a new economic campus in Darlington, while £1bn taken from the budget for the aborted northern legs of HS2 has been pledged to be used on transport improvements across Teesside’s various towns.
“It has been a game changer,” says Taylor of Houchen’s arrival. “If Ben wasn’t there, would we be in the position we are now? The chances are we wouldn’t, so all credit to him. He has done phenomenally well for himself and the region, more importantly.”
But for Taylor you sense this is less about party politics and more about demonstrable improvements made. “He is Conservative but he’s delivered on the airport, he’s delivered on the freeport, he’s delivered eye-watering numbers on infrastructure and logistics, we’ve got the business park at the airport going on. He’s done phenomenally well for our area and he really has put us on the map.”
All of which has created much optimism in the region’s real estate market. “It is Teesside’s time now, and we are punching well above our weight,” says Taylor. “We’ve got international recognition. There are so many exciting developments and opportunities happening. It’s fantastic to see.”
Open to the world
Taylor says the freeport will attract major international occupiers, particularly in the hydrogen and other green technologies sectors, but will also prove a catalyst for the wider region as supply chains develop around them.
“As soon as the freeport was announced, any land that was for sale just shot up in value,” he says. “People want to build and ride the coat-tails of these really large, successful developments.”
At 4,500 acres in total, the freeport has enormous potential. “The freeport is the largest development site in Europe,” Taylor says. “It is the equivalent of 2,500 football pitches, so it is absolutely vast.”
Taylor’s spirit of optimism is in stark contrast to the relatively recent past, which was marked by deindustrialisation and decline. Teesside’s final steelworks closed in 2015, taking a toll on the local community.
Taylor says the mood now could not be more different: “There is so much investment in the area as a whole, there are so many jobs, so you’re getting people moving to Teesside, which 20 years ago would be unheard of. With the improved connectivity and transport links, you can get to London in two hours or thereabouts. Teesside is now really open to the world.”
One of the keys to that global link is the airport, where there are ambitious plans for a mixed-use scheme sitting inside a freeport zone. Now back in public ownership, Taylor believes there is huge potential for the airport to increase the amount of freight it handles, particularly as shipping networks undergo disruption, which will create demand for storage facilities nearby.
But Taylor says the scheme will be about more than just warehousing: “They’re creating all sorts there, for sectors including industrial, logistics, office space, laboratories for research and development, aviation. And the beauty of that is it has fantastic transport links. It also has airside access and it has 2.8m sq ft of development land and 300,000 sq ft of current space.”
A river runs through it
Teesside is a strong working example of how intervention from the public sector can drive through positive change for real estate, and few places better demonstrate this than Stockton. The council has bought the outdated Castlegate Shopping Centre and is demolishing it and effectively starting the town centre afresh.
“A private investor wouldn’t be able to get that deal to stack up,” says Taylor. “They wouldn’t be able to buy a shopping centre and relocate all the tenants – the council was able to relocate the majority of them in the neighbouring Wellington Square, which it owns.
“It realised that the strength of the town is the river that runs through it, the River Tees, but the Castlegate Shopping Centre was a real barrier to get to the river. Now that the shopping centre has been demolished it will connect the other side of the river, which is the Teesdale Business Park, and there is a lot of office space there. I think there are great opportunities for Stockton town centre and, really, hats off to [the council] for ambitious, innovative plans.”
Taylor believes the measures taken by Stockton council should serve as a blueprint for the rest of the country at a crucial time for town centres: “Ultimately, if it hadn’t driven it forward then the town would have just gone into permanent decline, and the fact the council is willing to spend so much money and do these innovative projects enables private investors to have the confidence to say, ‘Let’s invest in Stockton, let’s invest in Middlesbrough, let’s get to Teesside,’ because the opportunities here are massive.”
A different sort of public sector support has arrived in Darlington, to which the Treasury has moved an initial 600 jobs and where it is building Darlington Economic Campus, which will ultimately house 1,400 civil servants. Taylor says the knock-on effect of that has been to create demand for grade-A office space in Darlington and further afield, particularly within the legal sector.
“There are a number of fantastic law firms already in the region, and really they are just strengthening their teams,” says Taylor. “The people already based on Teesside who have built up a number of relationships, I think they will really benefit from this inward investment because they will end up getting additional work.”
Parker Barras operates from a distinctive office building known as the Qube. It was initially built as a marketing suite for a £200m scheme near the southern end of Middlesbrough’s iconic transporter bridge, but these were the days when Middlesbrough was not ready for such grand plans and the scheme failed to materialise.
“It is really striking, so we made an approach,” Taylor says of the building. “It does really stand out. It’s visible from the train and it’s visible from the road.”
Votes and volatility
In a way, the Qube serves as a metaphor for Teesside itself: it has survived difficult times and now stands out with a certain confidence.
But Teesside’s recent success has been built largely on public funding achieved through its political relationships, and those relationships could be about to change. Houchen is up for election again when the voters of Teesside take to the ballot box in May, and it remains to be seen how the parliamentary review will play out locally.
Then at some point in the short term there will be a general election, and bookmakers would give long odds on both Houchen and the Conservative government being in place this time next year, meaning Teesside could lose its special status.
Quite what that means is yet to be determined, and perhaps the call for future investment will be directed more heavily towards the private sector. But there is, now, a lot to invest in.
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Photos: Infinity Bridge, Stockton-on-Tees © BrianXIX/Pixabay
John Taylor portrait © Parker Barras
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