Row over town centre development plans

Want to buy this photo?

Paul Turner-Mitchell

In an article published in Estates Gazette, Rochdale MP Simon Danczuk and Rochdale independent retailer Paul Turner-Mitchell question the wisdom and viability of plans to build a third shopping centre in Rochdale town centre.

Mr Danczuk and Mr Turner-Mitchell both vigorously criticise the plans as no longer being sensible in the current climate, however, a spokesman for the developer hits back at what he calls "ill-informed criticism".

---------------

When the retail offer is so poor that the main shopping street has no less than 10 pay day loan stores and even McDonald's has fled in apparent terror, the story tends to write itself.

Against such a backdrop, you might think that the promise of investment in a 200,000 sq ft retail scheme would be welcomed. Yet proposals by Genr8 Developments - backed by Japanese-owned Kajima Partnerships - to bring forward precisely that have been beset by unusually vigorous criticism by local opinion-formers, and the company has been forced to come out in defence of the project with all guns blazing. So what is going on?

Genr8's development will be built on the site of the existing bus station, multi-storey car park and municipal building - known as the "Black Box" - which sit on the fringes of the retail pitch.

Local Labour MP Simon Danczuk has been vocal in his criticism of the scheme, arguing that it is wrong for Rochdale and is not progressing as it should. Last year he raised the subject of Genr8's trading position and what he described as its "low credit rating".

"I have had concerns about it for a while," Danczuk tells EG. "It isn't good and I don't see why a local council would get involved with Genr8.

"Our town is what some would call a peripheral town, but it will have three shopping centres. We can't sustain two and we are building a third. I would be happy to be proved wrong, but my view is that it is over development, it's not needed and it's a waste of money," he says.

Genr8 Developments' most recent financial returns for the year ending December 2011 showed an annual loss of more than 550,000, despite receiving almost 3m in grant funding. But Genr8 director Mike Smith says this tells only part of the story as he struggles to conceal his disdain over what he views as ill-informed criticism.

"Certain individuals have felt it suited them to make certain comments about the council and plans for the town centre, which are misplaced and inaccurate and extremely unhelpful," he says.

"Our balance sheet is utterly irrelevant for Rochdale. Kajima is the principle funder and its involvement is the point certain people are choosing to ignore."

Genr8 - a limited liability partnership - also points out that it is 50% owned by Chelsfield Partners, whose investors include Olayan Group, the Qatar Investment Authority, Bank of East Asia, Uberior Ventures and others.

But Paul Turner-Mitchell, owner of Rochdale-based independent fashion retailer 25 Ten Boutique, is unimpressed. He is critical of the local council, which selected Genr8 as preferred developer in 2009, despite no rival bids having emerged after a separate 250m development by Wilson Bowden was abandoned.

"The council embarked on this years ago with the Wilson Bowden scheme and back then the idea was fine and sound. The recession, the changing landscape - with retailers focusing on reducing their number of units and going for 'omni-channel' strategies - things have changed. But the council is still on the same path without taking that into account," says Turner-Mitchell, whose regular impassioned interjections on the troubled state of the UK high street have won him a place on fashion trade magazine Drapers' Top 100 power list.

Turner-Mitchell also points out that even with Kajima's backing, an element of external funding will be required for the scheme to progress. Genr8 admits "third-party finance" is an option under consideration.

Refuting claims that the scheme is more suited to a previous boom-era economy, Smith says that Genr8 is "very aware" of the retail trading environment and still perceives Rochdale as an "undoubted opportunity".

"The council is clear, and we are as one with them, that regeneration starts from the centre and it is crucial to Rochdale's regeneration that the centre has a good scheme in it," he says.

Warwick Smither, director of property consultant Cheetham & Mortimer, which is advising Genr8, believes the scheme suits Rochdale and will provide new units that will attract the likes of Next, Debenhams and Topshop - none of which is represented.

"If we were setting out to do a big-box scheme like The Rock in Bury, I would be sceptical. But it is not a huge scheme. It is a sensible size, complemented by a leisure component," he says.

Danczuk, though, believes that the council has gifted the private sector a scheme that does not present good value for local taxpayers.

He objects to the council's recent decision to fund the 2.5m demolition of two aerial walkways over Baillie Street into the existing Wheatsheaf Shopping Centre - which went into administration in 2011 - to facilitate redevelopment. The money will be repaid by Genr8, but only on the basis that the scheme progresses to "unconditional" status.

John Hudson, chief executive of Rochdale Development Agency - a public-private regeneration body acting as the link between council and developer - defends the need for it to be kick-started by public funding.

"Those walkways would have had to come down anyway, regardless of the Genr8 scheme. That is what the public sector has to do to create the opportunity for investment," he says.

He also refutes Danczuk's suggestion that the deal agreed with Genr8 is poor value for Rochdale.

"We are doing this with our eyes wide open," says Hudson. "We are not saying there is a long list of people with deep pockets queuing up to do it, but we want a partner with the skills and expertise to work with us to put in the funding, and the occupiers, that we feel are missing from the town."

Genr8 signed a legal agreement with the council in November, which Smith says will allow a delivery strategy to be "put into gear". No retailers have signed up for the scheme, which, despite earlier suggestions, will not now be based on a foodstore-led offer. It is likely to include an 80,000 sq ft anchor store, and a further large unit of around 45,000 sq ft, with the possible addition of a cinema. But much depends on prevailing market conditions. "The stage we are at is outline design, which allows us to understand the capacity and layout. That becomes the initial marketing tool we use to talk to retailers," says Smith.

Those expecting immediate delivery may be disappointed, however. Genr8 will not get its hands on the site until next year at the earliest and building work remains dependent on prelets. Its proposals are part of a jigsaw of initiatives in the town centre, explains Smith, including the completion of the Metrolink and the demolition of the bus station, car park and Black Box, which have to come together before it can get vacant possession. "It's not a small job," he adds.

Such protestations are likely to have little bearing on the simmering opposition to what both Danczuk and Turner-Mitchell perceive as a poorly conceived project that will do little to salvage Rochdale's fast-sinking retail offer in the short term.

Something the rival factions do have in common is a recognition that the economic climate is working against any quick or easy solution to the town's demise.

If development fails to materialise after large-scale demolition work takes place, then its critics may well have grounds for complaint. Until then, they will just have to sit tight.