Grosvenor’s major retail scheme for Liverpool finally got planning permission last December. But, as Noella Pio Kivlehan reports, there are still obstacles to clear before it can start the development
After a lengthy battle to get planning permission, the last thing a developer needs is untimely speculation that its whole development could be going belly-up.
Grosvenor, the developer behind Liverpool’s 2.4m sq ft £750m Paradise Street scheme faced such a conundrum last month when its partner in the project, Henderson Global Investments, pulled out.
This prompted speculation that the scheme, which will provide 1.2m sq ft of retail space, may not see the light of day.
Henderson had been the joint venture partner behind Paradise Street, known as the Bluecoat Triangle, since Grosvenor brought the scheme to the table three years ago.
Since then, Grosvenor has been fighting off stiff competition from rival city centre project, Chavasse Park, spearheaded by the Walton Group (see panel below).
The council finally rejected Walton’s plans, which overlapped with Grosvenor’s, in September. And in December, it granted Grosvenor planning permission for the Paradise Street scheme.
Agents and retailers in the city were relieved that at least one of the schemes had finally been decided on.
For years, Liverpool has been strangled by its lack of retail offer. As a result, it came 16th in the 2002 Experian Retail Rankings.
The council’s decision to plump for Grosvenor, backed by Henderson, meant Liverpool at last had a chance to develop the type of units it needs to attract big retail names – particularly now as it has been named European Capital of Culture 2008.
Then came last month’s headline: “Henderson retreats on retail risks”.
Stories stated that Henderson Global Investors was “considering pulling out of funding high-risk development, which could seriously delay Bristol’s £500m Broadmead development and Liverpool’s £750m Paradise Street scheme” (24 May, p21.)
Henderson was not extending its agreement with Grosvenor beyond the planning process, and had ended its 50:50 funding arrangement with the company.
The move was part of the firm’s plan to shift to lower-risk portfolios and provide more security for policyholders.
“It’s all a storm in a teacup,” says Rod Holmes, project director for Grosvenor.
Holmes says his company knew as early as two years ago that Henderson would not be able to continue with the partnership beyond the planning process for Paradise Street.
He claims the Henderson story only made the headlines because of changes in the organisation of Henderson’s parent company – Australian financial service group AMP – which announced last month that it was to sell off Henderson.
Holmes says that the swirl of news around Henderson “certainly hasn’t held up any development” with Paradise Street, which Grosvenor signed up for in its own right.
He adds that Grosvenor is now talking to other investors for the next stage of funding, and that Henderson could possibly come back on the scene at a later date.
With the matter of funding cleared up, Grosvenor now faces another possible delay to its plan to start on site by the end of the year – a public inquiry into the CPOs, scheduled to start in September.
Road closures
More than 200 landowners are involved in the CPOs associated with Grosvenor’s scheme, which forms a triangle around Lord Street, that runs on to Church Street, Paradise Street and Hanover Street.
In all, 57 objections have been received, plus objections to several road closures.
If these objections are upheld, they will go before the secretary of state, John Prescott, who would not be expected to release his report until next March.
Not surprisingly, Holmes is hoping that it will not come to that. Holmes says that the company wants to reach agreements with retailers about the CPOs and road closures before September’s inquiry.
He points out that none of the retailers at the planning inquiry or at the planning application stage expressed concerns, and he hopes the public inquiry will go the same way.
Liverpool council believes the majority of the CPOs will be done through negotiation. “There’s likely to be a small number of people involved who will object, and we are not anticipating everyone will agree, but we are confident that the scheme will go ahead at the end of the year,” says a spokesman.
Local agents say that, given the size of Grosvenor’s development, it is not surprising that there are objections.
Peter Burke, retail partner at Mason Owen, which is acting for Kwik Save on Hanover Street, says landowners in the area facing CPOs would rather their premises be acquired by negotiations rather than via legal action.
Objectors to the scheme have three months to submit their grievances. But most Liverpudlians would like all the fighting and speculation to finish and for the city to get its much-needed additional retail space.
A development coming out of the ground will, of course, help keep shoppers, who are now attracted to nearby Cheshire Oaks and Manchester’s Trafford Centre.
As Nick Young, retail partner of Strutt & Parker, acting agent for Grosvenor, says: “Paradise Street will really take the city up the retail hierarchy.”
Plans for new high-fashion scheme
Like the wholesome 1970s TV show of a similar name, the Walton Group has seen its fair share of drama and disappointment.
The Liverpool-based group, headed by Bill Davies, fought since 1996 to get permission for a 1.1m sq ft shopping mall at Chavasse Park, an area of Liverpool that overlapped with Grosvenor’s Paradise Street scheme.
Last September, Walton saw its battle with Liverpool council finally come to an end as its proposal was rejected in favour of one by Grosvenor.
But, like all good TV dramas, the group is set to stage a retail development comeback. The scene for the comeback is set to be the former post office site at Whitechapel, now known as the Met Quarter.
Again, it has been a saga, with Walton purchasing the site in 1996, announcing plans but then doing nothing in an area generally regarded as an eyesore.
Considering what happened with Chavasse Park, many in the city had little faith in anything being developed.
However, things are now set to happen. Walton Group’s agent and spokesman, Darren Moorhouse, a company director at Manchester-based SY Moorhouse Wright, says the group is due to sign the final papers with a joint venture partner, London-based investor John Milligan.
The partnership plans a 160,000 sq ft retail development on the 250,000 sq ft site.
The idea of a joint venture has certainly warmed hearts at Liverpool council. A council spokesman says it is “encouraged” by the news.
Moorhouse says the signing “will give us the momentum to push on. We are already close to terms with a number of tenants”.
He says the 20,000 sq ft anchor store is close to being signed to an “upmarket brand fashion store”.
And Walton is in discussion with a second anchor store.
The Met Quarter will not compete with Grosvenor’s scheme as it will be a “niche fashion scheme”, says Moorhouse. The Walton Group hopes to start on site in October.
