Thursday, 12 March 2009

New schemes under threat

The development of new retail centres seems, over the past decade or so, to have viewed by many authorities as a bit of a cash cow - certainly in the case of town centre or near centre developments they have often been promoted as economically essential improvements that also impact positively on the visual amenity and upgrades to local public space, something that I believe to be more than just slightly disingenuous.

It seems that the farm-yard animal has changed and it is now the chickens that are coming home to roost. Ben Cooper in 'Retail Week' has today reported on the fact that the City of Wakefield near the eastern fringes of West Yorkshire is having to come to terms with the fact that the principal financers (Anglo-Irish Bank) of the proposed new centre named 'Trinity Walk' have withdrawn the funding. In the current climate it is difficult to see how replacement finance will be procured. I have not had the time nor inclination until now to investigate how this scheme was originated nor how it was to have been implemented, but to judge by the already secured anchor store and those other retailers committed to the scheme it is not difficult to imagine that this was to have been another scheme that was dominated by the usual brands. I am left wondering what role Wakefield's SME retail community were to have played and what impact the development was likely to have had on their existing businesses upon completion?

In the same 'Retail Week', Ben Cooper's report has made mention of the fact that one of the the joint developers, Modus, had already last December announced that it wanted to sell its 50% share which is hardly a ringing endorsement of the scheme - but then they already had had the finance withdrawn on two other schemes in Warrington and Crewe. Is this trend telling us something?

One thing is certain, the City of Wakefield and other local authorities should pay much more attention to the risk management aspects of the processes that they employ in furthering these schemes. The money is never guaranteed, even in good times - and now is not that! Perhaps as I have said in this blog before, it is time that planning authorities took a more balanced approach to these things and considered how they can help incubate high quality new businesses in their new developments, because even if Trinity Walk had actually opened it is arguable that some of the original lease signatories may well not have survived for too long in the current climate and a poorly populated centre is not one which sends out positive messages to the visiting public. By this time of course, the traditional areas round these new schemes are invariably shot to pieces with vacant plots and over-priced rents and business rates, all acting as barriers to any smaller business wanting to open in the centre - here's a thought, how about a business rates moratorium on locally owned businesses for the first two years of their trading from a town centre site?

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