The Executive Member for Regeneration and the Director for Regeneration submitted a report for Executive’s consideration.
The purpose of the report was to seek Executive approval for Middlesbrough Council to acquire the freehold interest in a major town centre building of strategic significance.
In recognising the fragilities of its high street, the Council commissioned an economic assessment of the retail and commercial areas within the Town Centre, to provide an evidence base on which to tailor a package of interventions. The process benchmarked Middlesbrough against national trends, highlighting deficiencies and areas of improvement. In parallel, an analysis of retail floor space trends was also carried out. This data had informed the development of specific priorities, actions and responsibilities, to be taken forward by all stakeholders.
The exercise highlighted that Middlesbrough had an oversupply of retail floor space, in proportion to the amount of commercial activity. Middlesbrough had a retail core vacancy rate of approximately 19% on a base of 1.8m sqft of all available town centre floor space; this resulted in a buyers’ market with tenants seeking competitive terms from multiple landlords therefore driving down rents.
Middlesbrough Council had not determined a final use for the space but opportunities were significant. Early consultation had identified preferred community uses for the building which range from indoor marketplace, educational spaces and cultural performance space. This project would involve intensive co-design and development with businesses, residents, and other stakeholders. The respective business cases would be worked up for viability in the next phase of the project with the aim of securing a self-sustaining, publicly accessible use, which would add value to the area and generate the income required to sustain the property (and any future heritage / maintenance investments) in perpetuity.
The Council could have chosen not to acquire the property. As a property with local merits, any adaptation works must be sensitively handled. This added complexity and cost to the development options as the space was repurposed to modern town centre uses. In an already distressed property market, this added an additional financial burden for the delivery of the project and severely limited commercial viability and, therefore, private sector ability to deliver. It was therefore likely that the building would remain undeveloped without Council intervention.
That Executive be asked to:
1. Note the information contained within Part A of the report; and,
2. Take the decision to acquire the freehold interest in a major town centre building of strategic significance, once all the financial or exempt information contained within Part B of the report had been considered.
The restoration and reuse of this key building would provide a hugely symbolic investment in Middlesbrough and reassurance that the Council would invest in its significant buildings to breathe new life into them. In owning the asset, the Council could exert a level of control to support the development and restoration of the site, subject to the availability of external funding opportunities.