Agenda item

To consider an update on the town centre regeneration projects including Peach Place, Elms Field and Carnival Phase 1 and 2.

The Committee considered a report, set out in agenda pages 11 to 16, which provided an update on the ongoing town centre regeneration works including Elms Field, Peach Place and Carnival Phase 2.

Philip Mirfin, Executive Member for Regeneration (including town centre highways), stated that he had been involved in the town centre Regeneration project for some time, originally being the deputy Executive Member for regeneration under Councillor Stuart Munro. Philip added that the Market Place project was a highways improvement project, rather than a regeneration project. Philip stated that the Clerk for Wokingham Town Council had asked for support with the Market Place project (see item 42), and subsequently Philip took on town centre highways as part of the Executive portfolio. He added that more stringent governance was put in place on the Market Place scheme (modelled after what was already in place on regeneration projects), in addition to weekly updates being communicated via the Town Council to residents and the wider community.

Bernie Pich, Assistant Director - Commercial Property, stated that it was important to understand the distinction between the regeneration projects (such as Peach Place) and the Market Place highways improvement project. Bernie stated that Gail’s Bakery and Waterstones had been a big success with residents since their openings, and demonstrated the type of quality retail stores that the Peach Place development was looking to attract.

Bernie stated that there had been some delays in the development of Peach Place, and outlined the timeframe for new tenants taking up new retail outlets being early February 2019. Bernie added that an Executive decision had been made in 2016 to lease the Peach Place residential units as key worker housing. He stated that access between Rose Street and Peach Street was being looked at.

Bernie stated that the Elms Field development was progressing swiftly, based on a phased completion process with the Shute End car park being the first such phase to have been completed. Bernie added that the Carnival Phase 2 development was now planned to include the demolition and a rebuild of the Carnival Pool. Bernie outlined that the Carnival Pool demolition would not take place until the redevelopment of the Bulmershe leisure centre was completed in addition to a substantial completion of the Elms Field development.

Bernie stated that Wokingham was in a good position to attract and maintain retail support as it was a historic market town in the South East. He added that the regeneration team were very keen to open Gail’s and Waterstone’s as this was used to help attract further interest in the rest of the scheme from prospective tenants and the community, with the goal being a mix of local and national names within the retail outlets.

Bernie stated that work on the Elms Field development did not begin until 65% of the retail units on the site had been let. He added that the total cost of the regeneration projects was £117.6m (using a cash flow model), which included everything needed to deliver the schemes. Bernie stated that the rental income from the final regenerated sites would be an approximately 9% yield, based on a £50m debt amount and a £4.5m per year return. Bernie stated that the £4.5m per year return could be used to fund and support various areas of the Council, as the Council wished.

Guy Grandison queried what benchmarking was used to model the retail returns. Bernie Pich stated that the benchmarking was based on various expert opinions and by tracking the market, and the derived figure was calculated using a prudent view.

Philip Houldsworth queried who (the Council or the contractor) was taking the risk for the Carnival Phase 2 development of 55 apartments, when bank rates were normalising and the housing market was suffering. Philip Mirfin stated that it was his wish to retain the apartments as additional key worker housing, to encourage young doctors, nurses and care home workers to live and work within the Borough. Philip added that a contractor had not yet been appointed to the said development. Bernie Pich stated that the current plan was to offer the apartments on the open market. However other options, such as using the apartments for key worker housing or senior service housing, were also possibilities.

Rachel Burgess queried how (considering the multiple delays to the Market Place scheme) residents could be confident that the Peach Place scheme would be ready in February 2019, and that the retail outlets in both the Elms Field and Peach Place developments would not be empty upon opening. Bernie Pich stated that the contractor made proposals as to the timescales for completion, and the regeneration team took the view that those proposals were acceptable. He added that the team was monitoring the works closely and there had been some technical issues. However, any delays did not come at a cost to the Council as it was a fixed cost. Bernie stated that the currently agreed retail leases in Elms Field were legally binding, and 11 further legal lease contracts (out of 18 units) were being circulated, with 3 more units being close to agreement on a lease. Bernie added that the process of agreeing leases was slower than had been hoped. However, good progress was being made.

Bill Soane queried whether regeneration of other areas of the Borough was being investigated. Philip Mirfin stated that the Regeneration Team were talking to areas such as Twyford, Earley and Woodley to gauge their plans for 2022 onwards and to see how the Council could work with them on delivering these plans. 

Clive Jones queried the long term plans for the retail unit previously occupied by M&S, how many empty retail units there would be on 1 June 2019 and what assurances there were that the Council would undertake full Equality Impact Assessments (EqIA) for future projects. In response, Bernie Pich stated that the charity shop which currently occupied the unit previously leased to M&S was temporary, with 3 interested parties being considered for that unit; an estimated 2 empty retail units maximum would be present on 1 June 2019, with the hope that no retail units would be empty; and the design and access statement for Peach Place laid out measures regarding disabled toilets, lifts, lifetime homes, the surface of the square, pavement widths, removal of barriers and various other issues. Bernie stated that EqIA was included within that document, and for future projects those issues and solutions identified would be extracted in to a separate standalone EqIA document.

Mike Haines queried what had been done to bring more people in to the town centre from areas such as Sonning and what flexibility was there in the estimated returns should the economy fluctuate in the next 4 to 5 years. In response, Philip Mirfin stated that the culture and experience that the town centre would provide (via a cultural hub that would include live shows and a new town park, for example) would be used to encourage all areas of the Borough to visit, use and benefit from the cultural experience. The regeneration team had one of the strongest project management teams in the Borough Council and had a balanced attitude towards risk, and this was factored in to the resilience of the scheme. Bernie Pich added that there was flexibility in the scheme to lose a percentage of tenants and still allow the scheme to break even.

Shahid Younis queried how the revenue obtained from leasing units would be received by the Council, and the resilience of the scheme in terms of the minimum occupancy threshold needed to stay positive. Bernie Pich stated that this was dependant on the incentives given to each shop and business, for example some units may have a longer rent free period as part of their agreement than others; Bernie stated that there was resilience in the scheme and adequate headroom for changing market conditions.

Bill Soane queried what was being done to address vandalism in the town centre. Philip Mirfin stated that the team was looking at providing wireless CCTV. However there were issues concerning how this would be managed. He added that the key to addressing vandalism issues was for the Council to work alongside the Police and to see what the Police were doing to address issues of vandalism in the town centre and across the Borough.

Clive Jones queried whether the £4.5m per year income was based on the sale of all 55 residential properties. Bernie Pich stated that there would be more properties than the 55 stated, which would be delivered across the regeneration sites, and that these income estimates were prudent and considerate of market conditions.

RESOLVED That:

1)     Philip Mirfin and Bernie Pich be thanked for attending the meeting;

2)     any further questions regarding the town centre regeneration projects be directed to Democratic Services and answers subsequently be circulated to the Committee;

3)     a further update on the town centre regeneration projects be submitted to the Committee in the 2019/20 Municipal Year.