Cabinet discussed changes to the initial agreement between the developers of the site (Stanhope plc) and British Land plc. With preparatory works and demolition underway, the meeting successfully resolved the few remaining conditions, paving the way for construction to begin on the new retail development imminently.
The changes include that the council will waive £500,000 of money it would have received from the deal and that British Land will agree to relax some of its original conditions before the funding is released. Stanhope has also agreed to reduced returns from the deal and will bear additional costs that were not known at the outset. The discussion today has come about in response to changes in the market value of the development. By agreeing to the variations, the cabinet has ensured the Council will receive £1.5million from the developers as a capital receipt, before returning its £500,000 waiver.
Nothing in the proposal has changed the agreement on lettings, which is in place to protect the economy of the existing city centre and with today’s news, critically, all three parties are now locked into the development; a major milestone for the project.
Councillor Jarvis said: “We all negotiated very hard and I believe we have managed to deliver a really good deal for the City and the County. Everyone has made concessions but today’s agreement now means the only retail scheme to open in the UK in 2014 will be here in Hereford.
“This development will generate more than 1,000 jobs, in addition to the jobs during the construction phase. It will lead to £1.25million of business rates income to the Council along with the income from the new car park on the site. The Council will still retain the car park as a capital asset.”
Alistair Shaw from Stanhope commented: “This is a critical last step in bringing to fruition the first funding deal of its kind to be agreed in the UK for more than five years; a deal which will bring about a real boost for the county. The commitment being shown in Hereford, and in agreeing this landmark deal, is exciting for all parties and for the residents and businesses of the city. Everyone has had to make significant contributions to make this deal happen, but we are delighted with the cabinet’s decision, which serves as evidence of our shared vision for Hereford’s future.”