£45m offer to get new Sheffield retail quarter underway

An artist's impression of the original Sevenstone scheme
An artist's impression of the original Sevenstone scheme
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STALLED plans for a new retail quarter in a Yorkshire city which fell victim to the recession could be kick-started with a further £45m of public money under plans unveiled by council bosses yesterday.

Sheffield’s Sevenstone project, which is supposed to be overhauling a huge area behind the city’s John Lewis store, should have been completed by now, but its developers have continually postponed the start date.

This has led to parts of the city centre falling into near-dereliction after shop units were the subject of compulsory purchase orders led by Sheffield Council several years ago only to be left empty.

Traders who still have shops in Sheffield have made representations to the council, claiming the state of the streets is putting shoppers off, but developer Hammerson has not yet been persuaded to move forward.

Yesterday, Sheffield Council chief executive John Mothersole, who has led negotiations with Hammerson, confirmed the authority has now offered to fund £45m of work to “facilitate” a start date on the scheme in 2014.

Mr Mothersole said the deal would involve the council advancing the cash in the knowledge that once the new shops were up and running taxpayers would get the money back through business rates.

Under a so-called City Deal signed recently with the Government, Sheffield Council is now able to keep more of the business rates raised in the city, which previously would have gone to Westminster.

Mr Mothersole said the Sevenstone project was currently a “chicken and egg” situation, with Hammerson refusing to start without more investment but with little extra cash available until the “innovative” deal was arrived at.

But he stressed the council would not be “writing a cheque for £45m to the private sector”, adding that the money would be spent on works to assist Hammerson, but would not pay the company’s private bills.

He added: “It doesn’t have to be the full £45m, but we have agreed that sum. This all means that the council will receive a new income stream but only when the shops are built.

“Someone has to break the circle and the council will step in. But it will not all be money up front to Hammerson. The fact is that Hammerson will not commit to build it until a substantial part of it is let.”

It is hoped that spending up to £45m on more preparatory work will encourage more retailers to make a firm commitment to the scheme, alongside big names like John Lewis and Next, which have already signed up.

Mr Mothersole said Sheffield was the only Yorkshire city to win approval from the Government to use its new City Deal cash powers in this way, with retail projects in Nottingham and Newcastle also receiving approval.

He added: “The £45m is a figure we have put to the Government and the spending has been agreed. This is money that is entirely within the council’s control.

“The works that we will carry out will be works that in some cases would have been carried out by the council in any case, or we will bring in contractors to do work to get the scheme moving.

“But we will not do any of this work until we have got a firm commitment from Hammerson, which needs to legally commit itself to starting work.

“We are not going to just spend this money on putting in infrastructure like cables and water supplies in the hope that the developers will be persuaded.

“We will only move forward once Hammerson is legally committed to deliver the scheme.”

Frustration at the company’s lack of movement on Sevenstone has been compounded in Sheffield after it purchased the Victoria Quarter in Leeds to link with new shops it is building close by.

After announcing the £136m purchase in September, Hammerson said the Victoria Quarter would create a “direct route” to its planned Eastgate Quarters, which will be anchored by a 24,000 sq m (260,000 sq ft) John Lewis store.

Nobody from Hammerson was available to comment on Mr Mothersole’s announcement yesterday or confirm whether it was prepared to enter into any arrangement with Sheffield Council on Sevenstone.

martin.slack@ypn.co.uk