Posted by:24 April, 2012
The economic downturn has created a number of challenges for local authorities to overcome, especially in regeneration. Simon Hope, pictured, strategic project manager at Basingstoke & Deane BC discusses the issues they have overcome as they seek to redevelop Basing View and attract investment into the area.
The impact of the 2008 financial crash and recession had inevitable consequences for regeneration schemes around the country. This brought about new challenges for the public sector as a major partner in regeneration schemes - the question was how to bring forward viable projects against a backdrop of constrained development funding, weakened occupier confidence and willing development partners.
The fallout from 2008 required us to re-exam our relationships with developers to ensure schemes were fit for purpose for a new and very different economic landscape.
Against this backdrop, the council was busy advancing the regeneration plans for the Basing View area of Basingstoke, a vital economic area of 65 acres very close to the centre of Basingstoke.
Basing View is not only a key gateway to the town, both by road and rail, but provides nearly 25% of the town’s entire office buildings. However the area is in need of a radical overhaul with the majority of buildings constructed in the 1970’s and early 80’s and with vacancy rates dropping and only one new development built over a 20 year period and that in 1999!
As freeholder of Basing View, with 1.25 million sq ft of buildings leased to 17 different landlords, the council recognised something had to be done and that given it also owns 15 acres of undeveloped land outright it was best placed to take a lead role to revive an area once known as the “Dallas of Hampshire” for its predominance of high rise buildings, which symbolised Basingstoke’s rapid economic growth in the 1970’s.
Taking the lead
Recognising the need for a different approach to the project, the council recognised they needed to appoint a project manager to lead the regeneration initiative and looked to the private sector to bring the skills and experience in dealing with large scale regeneration projects. In early 2009, I joined the council from a commercial development background in the private sector.
The council took the first critical steps to providing strong foundations for the project by earmarking up to £10m of investment. This combined with cross-party support and significant landownership and long term commitment, provided a strong platform to convince the private sector this is a location and a council to invest in. This was not going to be an easy challenge with high vacancy rates, declining rental values and a number of vacant buildings.
However, fundamentally Basing View is an area with strong transport and locational strengths but we knew our first challenge was creating momentum and a belief that real change would take place.
From my own point of view, the main task ahead was to make the proposition attractive to the private sector, recognising that as with all large scale regeneration projects we would need to attract a long term partner with patience, determination, vision, access to finance, stability and staying power.
Three years on and Basing View is well positioned to attract major investment and change on the ground has gathered pace.
This has been achieved by the council adopting a very forward thinking approach to take back vacant buildings from investors which were blighting the entire estate and funding the demolition of obsolete office space. This has created a real belief, combined with commencing the initial phase of a three year public realm scheme improvement scheme across the whole area.
At the same time, the council was undergoing a procurement exercise to find a development partner which saw the appointment of a long-term partner, Muse Developments in October of last year. Turning the clock back to 2009, the council accepted that to attract the right calibre of development partner it would need to offer an appropriate basis of partnership, reflecting realistic but deliverable objectives, with development delivered on an incremental basis. Importantly the council also acknowledged that it would play an active role as an investor by funding the initial infrastructure works.
A critical aspect to attract the right calibre of developer partner was establishing a commercial strategy informed by testing the market; recognising that in a post-recession world developers were going to be more cautious about how they approached large scale regeneration projects. The private sector would of cause be cautious in making its choice and which projects offer the right ingredients for success. This is something we were very keen at the outset to make sure Basing View would be attractive by carefully considering the basis for the bid process and commercial structure.
The procurement process is often cited as a major challenge in itself but it does not necessarily need to be overly complicated, though it is important to provide the private sector with comfort that the development selection process will be run to a clear and achievable timetable and will not involve excessive expenditure. It can though allow the public sector the opportunity to test the private sectors appetite and approach in a pragmatic way, which will allow the public sector to manage its risk and obtain a clear insight into its potential partner proposals.
The competition process does take on a life of its own and needs significant resource both from a legal and management perspective, but provides valuable feedback to help make an informed decision about the future identity of the partner and setting out the commercial terms.
Looking back since 2009, many challenges have been overcome and Basing View is now well placed to be seen as a credible location for occupiers - it will not be an overnight process though and economic realism will still need to prevail but important first steps have been taken and we are well placed to capture new investment. It’s a very exciting time for all in Basingstoke.
Simon Hope, strategic project manager, Basingstoke & Deane BC
Anyone wanting to learn more about Basingstoke’s regeneration projects can contact Charlotte Hammond, senior media relations and communications officer, Basingstoke & Deane BC on 01256 845770 or via email: email@example.com
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