Last week, outline plans to transform 24 acres of central Newcastle into an 1.9m sq ft hub for the science industry were approved.
Science Central, as the scheme is known, will sit on the site of the former Scottish & Newcastle brewery and is backed by the city council and Newcastle University, with city development company 1NG charged with its delivery.
Back in 2005, the then-Labour government designated Newcastle as one of six “science cities” on the back of the university’s work in the field. The idea was to boost the industry in the city, and Science Central is intended to be the physical manifestation of Newcastle’s scientific renaissance.
Land adjacent to the 24 acres has already become the most recent focus of developer activity in the city, with Liverpool-based Downing Developments securing £32.5m in 2009 for the first phase of its £200m Downing Plaza, which, crucially, includes a 100,000 sq ft building that has been prelet to Newcastle University Business School.
A detailed application for the first phase of Science Central proper – a 60,000 sq ft “Gateway Building” – will be lodged by 1NG by the end of this summer. It could be on site by early 2012.
The overall vision is to harness the spin-off value of the university to bring scientific companies to the site as anchors for a mixed-use regeneration scheme, which will also include homes and community facilities. 1NG claims that, over a 20-year period, £255m of private sector investment and 1,950 jobs will be generated.
But a major challenge lies ahead. Newcastle is not the only city chasing the science sector. Manchester council is promoting a science-based hub on its Oxford Road corridor and, in the recent Budget, the government reaffirmed its commitment to a number of the industry’s traditional English hubs in the South East.
Some also question the viability of the project, with public funding likely to be limited and developers in the city still largely unable to secure finance. So, will Newcastle’s scientific experiment be successful?
Colin Macpherson, director of development with 1NG, insists that the plan remains as relevant today as when it was hatched at the top of the market. He says: “Our 1PLAN for Newcastle and Gateshead identifies industries that can help the city to grow, and we have a competitive advantage in the field of science. We’re trying to lever the strong position of the university.”
Sign of things to come
Professor Nick Wright, pro-vice chancellor for research and innovation at the university, points to the NUBS headquarters at Downing Plaza as a sign of things to come on the former S&N site. He also points to work that is already under way on the site to drill a 2,000m geothermal borehole, which will eventually provide energy for the city quarter.
“Further investment in the site will see the relocation of some of the university’s activities in sustainability research,” he says.
Andrew Lewis, director of policy for the city council, points out that it was central government that identified the potential for Newcastle’s “science city” badge, hence the Science Central proposal. “As a result of the downturn, it has been more difficult to develop than we expected,” he admits, “but we haven’t been sitting on our hands.”
Ask property people what they think of Science City and most agree with the principle. “Newcastle University has a very good reputation in sectors such as bioscience and it needs to be capitalised on,” says Robert Patterson, head of Sanderson Weatherall’s city office.
Paul Nicholson, head of BNP Paribas Real Estate’s Newcastle office, agrees. “We need to create better quality jobs that aren’t easily replaceable when times are tough,” he says.
But agents question its deliverability in the near future. Michael Cuthbertson, head of GVA’s office in Newcastle, says: “From a regional economic perspective, the science sector offers a huge amount of potential, but from a hard-nosed property perspective, science-based development will not work unless both the buildings and occupiers are subsidised by the public sector.”
He adds: “We’ve seen science-based developments in the region fail, but in this climate it will be doubly difficult. The question then is, how long can the site stand largely undeveloped before the vision is compromised?”
Macpherson insists that the rug has not been completely pulled out by government cuts. He says that £16m of initial funding from the council and university is in place to finance the first phase and a bid for £4m of European funding has been submitted. But a bid for £8m from the government’s Regional Growth Fund – which would have been provided by the outgoing One North East regional development agency – was not successful in the first round of bids.
“The potential loss of future funding doesn’t make life easier, but we already have cash in place so we can use it to leverage private sector investment,” says Macpherson.
In the longer term, rumours abound in the city that the council will look at a tax increment financing model for the scheme, and some suggest that Science Central will be put forward as the North East’s enterprise zone. Tough questions will need to be asked about how to fund the wider project.
Key growth sectors
It is also difficult to measure Newcastle’s ability to compete for occupiers with the UK’s more established industry hubs, such as Oxford and Cambridge.
Semta, the state-sponsored Sector Skills Council for Science, Engineering and Manufacturing Technologies, champions the industry’s growth in the UK. Asked about Newcastle’s credentials, a spokesperson says: “As a region, the focus is on encouraging high value and knowledge-intensive industries. There are two key growth sectors.”
The North East’s manufacturing industry contains an existing supply chain in the biopharmaceutical sector, says Semta, and 58% of the UK’s petrochemical industry is located in nearby Teesside. Semta also notes that North East companies are involved in advanced manufacturing in fields such as nanotechnology, materials science, electronics and ICT.
Newcastle and the region in which it sits clearly have a track record when it comes to science, and most agree with the wisdom of boosting the sector in the area.
The challenge now is to create the physical setting in which science can flourish.
Government’s enterprise zone plan sparks concern in Newcastle
Although the location of the government’s proposed North East Enterprise Zone has yet to be announced, Newcastle’s 24-acre Science Central scheme must be a contender, agents surmise.
Local property people also suggest that the north bank of the River Tyne, which is earmarked for major development, might catch the government’s attention. Newcastle is far from guaranteed the EZ, though, with sites in Sunderland, including Turbine Business Park and land close to Nissan’s plant, also tipped.
Newcastle and North Tyneside have a history of EZs, with the Cobalt and Quorum business parks still reaping the benefits of tax breaks, the latter attracting Tesco Bank in 2009.
Some in the area argue that the existence of EZs on Newcastle’s doorstep has historically diverted demand from the city centre and that the new zone must be well thought through.
Robert Patterson, head of Sanderson Weatherall’s office in the city, points out that 1m sq ft of offices are vacant at the Quorum and Cobalt parks following a race to deliver as much stock as possible while tax breaks remained in place.
Michael Cuthbertson, head of GVA’s Newcastle office, says: “This time round, I don’t think EZs should be drawn up with everything within a red line qualifying. It needs to be more focused, perhaps by selecting a wider area and only certain types of business and property benefiting.”
