Rotherham Council is getting closer to concluding negotiations with Tesco over the acquisition of Forge Island - the key site in the continued regeneration of Rotherham town centre.
Rothbiz reported first that the authority was preparing a bid to buy the 4.23 acre site that was previously the Rotherham Forge & Rolling Mills.
Currently home to an empty supermarket and a car park following the relocation of Tesco across town in 2014, it was identified as a suitable site for development of a town centre leisure hub as detailed in a council-commissioned planning document which placed bringing a cinema and leisure development to Forge Island as the first "key move" in the town's renaissance.
Commissioner Julie Kenny is being asked to approve the strategic acquisition and empower council bosses to negotiate terms with the vendors. Commercial property agents, Savills listed the Forge Island site in July with Tesco inviting offers from interested parties to purchase the site.
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Approval is also being sought for the funding for the acquisition and demolition to be drawn from the town centre allocation in the Council's capital programme and for a bid to be submitted to Sheffield City Region to seek Growth Fund money to assist with the acquisition and demolition.
The Council is set use its financial firepower to invest around £17m in key projects that have been agreed in principle as those that should be supported. These include a cinema, which in turn is expected to attract secondary restaurant, shop and bar developments. The pot includes provisional sums for the purchase of Forge Island and a "reverse premium" to incentivise a developer or end user to deliver a leisure scheme.
Financial details of the deal have not been disclosed but it is known that the Council had an option to buy the site for £1.5m when Tesco vacated and moved across town to the a £40m store on the site of former council buildings on Drummond Street. Demolition costs are an estimated £251,000 and consultants at Jacobs identified in a 2013 study that around £6m would need to be spent to deal with flooding and ground issues on the site.
The authority will be hoping for a better response from the city region as a bid was knocked back last year for £6m of pubic sector funding via the Local Enterprise Partnership's investment fund for strategic infrastructure investment (SCRIF) when discussions were taking place over a potential 200,000 sq ft office development on Forge Island.
A report to the Council's decision makers states: "It is clear that Forge Island will be a major component of Rotherham town centre's regeneration and a catalyst for the regeneration of adjacent sites. The Supplementary Planning Document (SPD) confirmed the suitability of the site for a leisure hub. Building from the SPD, Forge Island will feature as a major strand of the town centre masterplan."
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The Council has discounted letting the market decide what happens to the site due to uncertainties in terms of timescales and the prospect of development not coming forward in accordance with regeneration aspirations. It has also discounted using compulsory purchase orders (CPO) to acquire the site, again due to the timescales that would be involved.
The report concludes that the Council purchasing the site by agreement is the recommended option as it "provides certainty, subject to reaching agreement with Tesco, in terms of being able to control the future use of the site. Tesco is actively marketing the site and prepared to negotiate on a mutually acceptable price."
Private sector members of Rotherham Partnership's Business Growth Board have taken the view that the acquisition of the site by the Council "will send a clear message to the market that the site will be available at an early stage to deliver the town centre masterplan proposals. This will build confidence in Rotherham town centre as a place to invest and assist in bringing forward other regeneration opportunities. The Business Growth Board would encourage the Council to take all reasonable steps to negotiate the purchase of the site as soon as practicably possible."
With commissioner approval, council officers hope to exchange contracts next month, allowing for the sale to take place and demolition work to begin by the end of 2016.
A detailed development proposal and a delivery and implementation plan for the site will be prepared in tandem with the town centre masterplan which is due to be completed in Spring 2017.
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