Greengate pre-let part of Salford Council’s plan to "de-risk" schemes

SALFORD City Council has taken on the head lease for the first of the buildings to be constructed at Ask Developments’ £350m Greengate Embankment scheme in a bid to kick-start the project.

The council has taken a lease for around half of the biggest building on the site – the ten storey, 196,000 sq ft 101 Embankment building.

Speaking at a Downtown Manchester in Business event last week, Salford Council chief executive Barbara Spicer said that in the absence of the availability of gap funding the council had been working with several of its development partners to get key schemes moving.

She added that Ask’s Exchange Greengate was probably the next major scheme in terms of the development of Salford city centre, but it had been sat on the table since she first took up her post five years ago.

“The debt and mezzanine funding isn’t there to bring stuff through without an end user – it’s difficult to access finance without a pre-let.

“Do I want a pre-let for Exchange Greengate? No. Can I take the head lease? Yes.

“So we’ve taken the head lease to act as the pre-let to help them get access to finance.”

She said that Salford council staff “will never go in that building”, but that this was an example of a way in which it could help to de-risk schemes to get them off the ground.

She added that the council also expected to play some role in assisting the development of Peel Group’s Port Salford scheme, which was one of the schemes for which Greater Manchester’s authorities applied for regional growth funding earlier this year.

“We will play a role in that and take some of the risk,” she said. “Port Salford is seen as  critical infrastructure for Greater Manchester and is part of the carbon economy local plan.

Spicer said that the nature of the relationships between developers and local authorities have changed as funding conditions have tightened.

“Where we were in terms of development five years ago and where we are now dictates a different role from the local authority, and actually we’ve got to get into that space a bit more.”

Speaking about the impact of public sector cuts on Salford, which will see it strip £46m out of this year’s budget and a further £32m off next year’s, Spicer said that she feared that it would have an impact on the local economy as a whole and on the development pipeline in particular, but she added that the city council had retained its expertise in that area.

For instance, she said that all of the staff who had previously worked for Central Salford’s disbanded Urban Regeneration Company other than chief executive Chris Farrow had subsequently been seconded into its in-house development team.

“I couldn’t afford to cut it,” she added. “If you start cutting back on that you’re not going to get your economic drivers through.”

When asked what she envisaged that team to be doing in future years, she added that it would probably operate jointly alongside Manchester City Council’s own development arm.

“Howard and I are already looking to put a lot of our functions together,” she said.
“Actually, my development director Karen Hirst and Howard’s team are fairly hand-in-glove. They’re run the Evergreen Fund project together, they’re worked on the RGF round one and two bids together.”

She added that there was a maturity among the city-region’s political leaders which she had not experienced elsewhere in her career.

Moreover, the councils are beginning to share more functions between them, with different councils taking lead responsibility for policy in certain areas.

For instance, she said that she took the lead responsibility for economic development and skills, whereas planning matters tend to be handled by Roger Ellis at Rochdale.

“I have the confidence of nine other chief executives and leaders to go down and deal directly with Treasury and I go to MIPIM for Greater Manchester.

“So I’ll know as much about Kingsway and Carrington as I do about our own sites,” she said.

She also said that she envisaged a greater collaboration between the executive functions of the ten councils in a bid to streamline more functions. For instance, Manchester and Salford are currently in the process of putting together their legal departments and their IT operations.

“It will force some of that waste out of the system,” she said.