Sevenstone set to progress

SHEFFIELD City Council is to borrow £10m to enable a major retail quarter by developer Hammerson in the city centre to move forward.

The Council and Hammerson have agreed terms to execute a Compulsory Purchase Order at the Sevenstone site, meaning that construction work on the scheme could begin “at the earliest in 2013/14”.

Sevenstone will provide 80,000 sq m of prime retail and mixed use space, and is still expected to include a John Lewis store. It is expected that full scheme details will emerge later this year.

The CPO obtained by the Council expires at the end of July, and its expiry without a concrete funding structure in place had threatened to put the scheme into doubt.

A Sheffield City Council cabinet report on the scheme says that the £10m will be procured through “prudential borrowing” and will be repaid by Hammerson when construction work starts on site.

The Council’s Cabinet agreed to allocate £10m of funding towards land acquisition at the site under CPO powers in January 2010 but this was based on £9.5m of co-funding from regional development agency Yorkshire Forward.

However, the Yorkshire Forward cash was later withdrawn and the Homes and Communities Agency is now being asked to “restructure its investment” in the scheme to help deliver it, the report says.

The report also states that changes have been made to the commercial deal between the Council and Hammerson and that the Council’s £10m will be spent on land acquisition and property while Hammerson will underwrite the CPO and pay additional costs.

The Council’s partnership funding arrangement with Hammerson will “both secure the budget for acquisition purposes and protect the long term development opportunity within the city centre” but will not act as a “financial subsidy” to Hammerson, Sheffield City Council said.

In a statement, Coun Paul Scriven, leader of Sheffield City Council, said: “This is the biggest step forward we have seen in making Sevenstone a reality. In basic terms the Council will commit £10m to securing this development opportunity.

“What we are saying now is that Hammerson will provide additional funding so that we can move forward and secure the development site during 2011.

“This is a major and necessary step to make Sevenstone happen and bring the people of Sheffield a first class retail experience.”

Richard Brown, project director at Hammerson said: “We are in the final stages of negotiations with Sheffield City Council to ensure the CPO for the scheme can be delivered.

“We are working with the Council to deliver a scheme which matches the requirements of retailers and the people of Sheffield and following the delivery of the CPO, we will be in position to progress the revised masterplan. We hope to be in position to share details of the emerging scheme later in 2011.”

The report adds: “The long-term benefits to Sheffield of securing delivery of a New Retail Quarter (NRQ) would be both enormous and long lasting.

“It would provide a high class regional shopping facility which would compete with other city centres such as Manchester, Leeds and Nottingham.

“The scheme would create a major private sector investment in the city centre and create a high quality retail led / mixed-use scheme.”

The project was originally proposed to begin in 2008.