Report of Interim Corporate Director of Regeneration, Economy and Growth
Minutes:
Geoff Paul presented a report which considered the options available to the Board in relation to the Stronger Town Funding supporting projects in the Tindale area.
By way of background Geoff Paul reminded the Board that the Town Investment Plan specifically included the Tindale Triangle project which would improve the capacity of three junctions in the area which were preventing new housing, commercial and retail development taking place. Council officers had been developing the detailed business case for submission to Government by the deadline of the end of July.
At its meeting on 21 June 2022 the Board considered a new project that would provide a viability gap grant to a developer to enable the provision of new leisure and retail facilities at Tindale. The development would create over 400 jobs and secure private sector investment. The developer had called the development the Auckland Retail Park. Officers were asked to consider this scheme as an alternative to the Tindale Triangle project.
This report considered both schemes.
The Business Case for Tindale Triangle was on target for submission later this month. The design proposals for the three junctions were included in the report. The scheme rated very highly in terms of value for money (benefit cost ratio over 4) and would enable future housing, leisure and retail development as described in the Town Investment Plan.
The Auckland Retail Park proposal comprised of a mix of retail and leisure providing eateries, gym, cinema and bowling alley with an estimated 450 jobs created.
The Board was advised that planning permission for the development was granted a number of years ago and included a condition which prevented development taking place until highway improvements to address capacity were implemented (The Tindale Triangle improvements).
The Board was also informed that a £3m grant to the developer to meet a viability gap would need to satisfy a number of tests before a Business Case could be signed off by the S151 Officer. These were listed in the report. Work on this was ongoing and it was suggested that this be further considered at the Board meeting on 28 July.
If the Board was minded to prioritise support for the Auckland Retail Park and deliver the anticipated benefits to the wider town then the Board could consider supporting both projects. This would require a review of unallocated Funds in the Town Centre Diversification Fund, but it was important to stress that movement of Funds could have an adverse impact on the town centre by further out of town retail development. Such a change would also require a project variation request to Government as the Town Investment Plan outputs agreed with the Government would not be delivered. Board was also advised that any decision to support this project would require approval from Government to extend the deadline for business case submission.
The Board was advised that the Business Cases currently being delivered and those subject to agreed extensions were at risk of final costs being in excess of original estimates in the Town Investment Plan because of national pressures on construction costs.
The Board discussed the options.
Rob Yorke sought clarification regarding the planning condition, and was informed that without funding, the costs for the junction improvement works would be met by the developer. The developer had not included such costs in his proposal. The works must be delivered to the satisfaction of the LPA before any development, other than preliminary works, were commenced on site.
Rob Yorke asked if the highway improvement costs were known when the planning permission was granted. He was concerned that the developer may potentially be required to meet these costs and referred to a report he had seen some time ago. This referred to improvements to only one roundabout at a cost of £380k. Craig MacLennan advised that recent data showed that the congestion at Tindale warranted improvements to three junctions, and the estimated cost of undertaking the minimum works required to allow future housing, leisure and retail development was £2.75m.
David Maddan noted that the report recommended that the Board continues to support the funding to address capacity issues, and that it may wish to look at unallocated TCD monies to support both schemes.
There was no guarantee that £2.75m investment would generate £100m in new housing. David Maddan considered this to be a risk as opposed to the Auckland Retail Park project which would create over 400 jobs subject to highway capacity improvements.
David Land advised that from his own experience congestion was experienced between 2pm and 4pm on Fridays. If the Board wished to support both schemes he asked how value for money could be assured. Geoff Paul explained that the report to the Board identified a BCR on the Tindale Triangle works of 4 and that should the Board agree to fund the Auckland Retail Park the detailed work to develop the detailed business case, including the BCR would need to be undertaken.
Following further questions and comments from Rob Yorke, Craig MacLennan advised that Highways had been looking at the options for capacity improvements for 2 years and could provide a breakdown of how the £2.75m would be allocated. Geoff Paul added that this was the minimum work needed to unlock the potential for future development.
Councillor Scott reminded the Board that if the road mitigation works were not implemented then the Auckland Retail Park could not happen, and added that the Tindale Triangle Project would remove the obligation from any developer to have to potentially meet capacity improvement costs.
Both David Land and Rob Yorke considered that the biggest highways risk was the McDonald’s roundabout but noted that this was not included in the project.
Dehenna Davison MP stated that she would be pleased to see both projects delivered in full but appreciated that caution should be exercised to ensure that economic development was realised. The point of the Fund was levelling up; job growth would be hugely beneficial and she would like to see the retail park delivered if possible. She asked if a Business Case was feasible by 28 July or if an extension could be requested. In terms of the junction improvement works she agreed that McDonald’s roundabout was the biggest bone of contention for residents.
Craig MacLennan was asked to look at the forecast model to establish if the McDonald’s roundabout could be included in the improvement works. The Board was advised that the works included in the Tindale Triangle project would have a beneficial impact on the tailback issues associated with McDonalds.
Councillor Scott asked Officers if it would be feasible to include both projects given that the Retail Park could not proceed without the junction improvement works which had been identified as necessary to support housing development.
Geoff Paul advised that the Business Case for the £2.75m capacity improvement works could be delivered by the deadline. If the Board could fund a grant of £3m from the wider TCD Fund a four month extension from Government would be required to complete the Business Case.
David Land stated that at the last meeting, although it had not been voted upon, the majority of the Board preferred the Auckland Retail Park development.
Nik Turner stated that a preference had not been expressed by all; the Board had requested further information about the Auckland Retail Park and Heritage Walking and Cycling Route proposals for consideration at this meeting.
Nik Turner also asked about the potential risks if a Business Case extension was needed. Alex Jarvis explained that there was no guarantee that an extension would be granted and if the project was significantly changed a variation assessment would be required.
The discussion on the report ended without the Board making a decision on the recommendation and the matter would be further discussed at the meeting on 28 July.