Labour-led Cheshire West and Chester Council seems prepared to risk at least £57m taxpayers’ money to make the dream of the £300m Northgate Development become a reality.
And as the council continues to search for investors, it looks set to take a gamble by committing even more cash to improve the chances of the Chester city centre scheme getting off the ground.
Council advisers Strutt and Parker claim there is ‘strong’ interest from a number of potential funders.
But a report to next Wednesday’s cabinet (October 11) recommends the council keeps up the ‘critical momentum’ by funding the construction phase if no financing partner is forthcoming, subject to stringent commercial conditions, with the belief private money will follow later.
The council-backed scheme, which already has planning consent, would include:
■ House of Fraser department store to anchor a project featuring large and small shops
■ New market hall
■ Picturehouse six-screen cinema
■ Replacement Crowne Plaza hotel with conference facilities
■ Parking for around 800 cars
The vision also includes a plan to transform the former Chester library into a restaurant hub called Hunters Walk, which the report reveals is being considered as a standalone project – restaurant group Cosy Club is already signed up.
And a proposed change would see a larger residential component in the scheme with the numbers of homes increased from 72 up to 120.
A report by Charlie Seward, deputy chief executive - place and Mark Wynn, director of corporate services, sets out a way forward.
It explains that while the ‘preferred approach is to secure third party financing prior to a start date on site’, it would be helpful if the council was ‘prepared to provide financing for the scheme to completion’.
This would give confidence to potential investors waiting in the wings with the hope a funder would come on board ‘later than the start of the construction phase’.
In terms of the current financial risk, if the scheme failed to get off the ground, the report states: “The maximum total abortive cost could therefore be £56.850m. In reality this is highly unlikely as there would be a land/asset value associated with the Forum purchase and site assembly expenditure.”
Former Tory county councillor Andrew Needham, chairman of Campaign to Protect Rural England (CPRE), says Northgate is ‘risky’ given the amount of public money at stake. He cites the experience of the council-backed Barons Quay development at Northwich .
He said: “CWaC have not learnt a lesson from BQ in Northwich. They are proposing a similar course of action for Chester Northgate! £80m has been spent on mini version of Cheshire Oaks . There is a cinema, a supermarket and one restaurant but everything else is empty.”
However, the Northgate model differs in that tenants are being signed up prior to the commencement of the construction phase.