Stockport plans to fund leisure scheme with £43m loan

STOCKPORT Council wants to borrow £43.4m to kickstart a new leisure scheme at the Bridgefield site.

The planned development off Great Egerton St – adjacent to Debenhams – will include a nine-screen cinema, eight restraurants, two shops and a 400-space multi-storey car park.

The council is now in talks with a cinema operator and will seek pre-lets at seven of the units.

Stockport has already agreed to pump £18.5m into the second phase of the Exchange hotel and offices scheme at the train station.

Last year a council report admitted the Bridgefield scheme was commercially unviable but the authority now says it is moving towards “financial deliverability” because of some of the preparatory work it has carried out. The town’s existing Grand Central cinema will also close in 2015.

A document prepared ahead of an environment and economy scrutiny committee meeting explains the council wants to fund the project because the cost of commercial finance means a developer would need some kind of gap funding.

It also said it needs to bring on the scheme to secure future investment from Debenhams as the department store has said it will only invest in the town if improvements are made to car parking and the public areas.

The seven-acre site currently consists of a car park and six retail units which will be demolished. Ambitious £500m plans for the site were drawn up by Lend Lease but abandoned fours years ago when the market went sour.

In early 2012 the council acquired the long leasehold on the Debenhams building and car park, and has also approved buying up more buildings on the site to create a new public square linking the leisure scheme to Mersey Way Shopping Centre.

The report said: “There is only one option immediately available to finance this scheme which would be to ultilise prudential borrowing. This is available to the council at a lower cost than commercial funding.

“The council could then choose to hold the assets long term or dispose of them when the capital value exceeds the outstanding debt. The use of prudential borrowing would allow the council to access loan rates with the public works loan board and also provide flexibility in terms of future disposals and profiling of debt and interest repayments.”

If funding is approved the scheme could start on site in 2015 and open the following year.