Something brewing

Disquiet over the former Vaux brewery site in Sunderland’s city centre has come to a head, with the council issuing a CPO in the same week owner Whitbread announced it was in talks with developers. David Quinn reports Sunderland has always fallen in the shadow of neighbour Newcastle. Investment activity and rental levels in the Wearside city are way below those of its Tyneside compatriot, despite Sunderland’s larger population. But, like its football team – currently floundering towards the bottom of the Premiership – the city is trying to claw its way to the top. Central Sunderland has been boosted by Land Securities’ Bridges shopping centre, which has doubled in size in the past year, and boasted 35% more shoppers between July and September than in the same quarter last year. Gap, Debenhams and H&M now trade from there. A combination of this and other factors are boosting hopes that a turnaround in fortunes could be on the cards for the city. Three new Metro stations are due to open in January, providing a direct link to Newcastle and an alternative route into Sunderland city centre. Meanwhile, the city is scheduled to host a government-backed urban regeneration company, like those set up in Sheffield and Liverpool. Yet one site has proved troublesome and has stymied Sunderland’s resurgence, prompting drastic action by Sunderland city council. The site of the former Vaux brewery is seen as hugely important and could prove the crucial test for Sunderland’s future vitality. It is more than ripe for redevelopment, comprising a selection of abandoned, windswept buildings which, in their current state, represent a giant eyesore sitting uncomfortably close to the city centre. Situated on the bank of the Wear a few hundred yards north of the central retail area, the site’s physical significance is difficult to overestimate. Its proximity to public transport connections, including the new Metro stations, only adds to its weight as a high-profile development opportunity. However, since Vaux stopped brewing in Sunderland following a takeover by Whitbread in 1999, the site has lain derelict. The council has been concerned by the lack of action for some time. “It’s a flagship site in the city and the time is rapidly coming where proposals will need to be agreed,” says one internal source. “The general feeling, not just from the council, but from the people of Sunderland, is that something has to be done.” The council wants to see something befitting the Vaux site’s size and location, and was unimpressed by Whitbread’s rumoured intention to sell much of it to Tesco. The council is said to favour a mixed-use scheme that will capitalise on the riverside setting, similar in essence to Liverpool’s Albert Dock. “You can build a supermarket anywhere, but we feel that a mixed-use retail, leisure and office scheme would be more suitable, particularly given the nearby transport links,” says the council source. The extended wrangling over the site has resulted in the council pursuing a £12m compulsory purchase order against Whitbread, which it announced last week. Council leader Colin Anderson believes that a developer is unlikely to purchase the site from Whitbread in the current climate and has warned the leisure group that it can expect a long legal battle should it challenge the CPO. Whitbread had declined to comment. But, the day before the decision to pursue compulsory purchase was agreed by the council, a spokesman for Whitbread claimed that discussions were ongoing with various developers, including JJ Gallagher. Hopes are high that the new urban regeneration company, which had its first meeting last month, will help spur movement at the Vaux site in conjunction with the council’s CPO. The URC’s overall remit is to work with the private sector to bring forward key sites for investment, identifying possible barriers to development and working with site owners and partners to remove them. The aim is for a “one-stop shop” where developers can establish a single point of contact for local, regional and national government. It has also been charged with the task of developing a new strategic approach to tackling the economic and social problems in the 4,200-acre (1,700ha) ARC regeneration zone. The ARC stretches along the south bank of the Wear and takes in almost 500 acres (202ha) of brownfield development sites, including the former brewery. Dr John Bridge, chairman of regional development agency One NorthEast, believes the URC will be crucial for the regeneration of the riverside area. “The inaugural meeting of the URC marks the start of the next phase in the redevelopment of Sunderland’s riverside,” he says. “It will be the driving force, bringing new life to the banks of the Wear and stimulating the city’s economic revival.” Meanwhile, a separate city-centre scheme is also taking time to move forward. Helios obtained detailed planning consent for its £25m, 170,000 sq ft (1,600m2) leisure-led development and secured Cine UK as anchor cinema tenant last year. Nick Ferris of King Sturge, Helios’s agent on the scheme, says work should begin on site early next year but that some matters need “ironing out” before this can happen. Sunderland: major employers Call centres are a big source of local employment Arriva Nissan Barclays Bank One2One Federal Mogul Philips Components IJ Dewhirst (Clothing) Reg Vardy LG Electronics Rolls-Royce London Electricity Royal & SunAlliance Newells (Glass) SP Tyres Nike TRW Automotive Components Source: City of Sunderland Sunderland: key facts Prime office rents are some way below Newcastle Population 290,700 Households 119,000 Area 53.3 sq miles Labour force 128,000 Number in employment 104,700 Total unemployment 6.3% Unemployment – men 8.9% Unemployment – women 2.9% Retail floorspace 3.47m sq ft Prime zone A rent (Bridges Centre) £125 per sq ft Prime office rent (Doxford) £13.25 per sq ft Typical annual office take-up 200,000 sq ft Sources: City of Sunderland, Office for National Statistics, DTI, HM Land Registry, DTLR, Knight Frank Durham Fresh start for leisure scheme AMEC’s long-delayed Walkergate leisure scheme in Durham looks set to get the go-ahead in the coming year. The developer is to submit a revised planning application to Durham city council within the next few weeks and work is expected to begin on site next summer. Changes in the leisure market – particularly regarding the vitality of the cinema sector – have been blamed by AMEC for the delay in bringing the scheme forward. Planning consent was initially granted by the council in 1999 amid some controversy. A cinema operator is being sought and it is understood that a hotel will be included in the new plans, at the expense of a health and fitness outlet. AMEC, which wants to keep the scheme low profile before a planned blaze of publicity early next year, is in “advanced discussions” with the hotel operator and at least three bar/restaurant occupiers, according to the company’s Dan Needham. But the developer won’t name names. Out-of-town offices EZstatus dictates development Parts of County Durham are benefiting from enterprise zone status, which is fuelling speculative office development in the area. Grantside Developments is constructing two call centre buildings totalling 70,000 sq ft (6,500m2) at Dawdon Business Park in Seaham, which are due for completion in December. The site offers rate-free occupation until December 2005. Meanwhile, the Hillford Group is embarking on a 180,000 sq ft (16,700m2) office development comprising three service centre buildings at Whitehouse Point in Peterlee South West. Again, EZ status lasts until 2005. Sunderland’s 800,000 sq ft (74,320m2) Doxford International Business Park, which houses a number of national call centres, is now full, except for one 56,000 sq ft (5,200m2) building. The success of the park has been put down to its EZ status. But this has now expired and agents are watching closely to see whether interest in the Sunderland area will be maintained, or whether it will disperse to EZ-funded sites elsewhere, such as Cobalt in North Tyneside.