Argent has sold the freehold of its office scheme for creative industries in Piccadilly, Manchester, to the city council for £3m and formed a joint venture, enabling work to start on site.
Argent, which struggled to make the scheme stack up in the past year, will take back a geared long lease and enter into a profit share agreement with the council.
The developer has appointed Bardsley Construction as contractor on the 76,000 sq ft first phase of the 135,000 sq ft scheme, officially starting on site on 1 September.
The HKR-designed building is aimed at providing a flexible workspace for the creative industry and acting as a magnet for inward investment.
The Arts Council is taking an 18,000 sq ft pre-let on the ground floor and Argent project manager Ollie Butler said a further significant pre-let was expected by the end of the year.
An economic impact study undertaken by Arup estimated that by 2013 The Hive will deliver 440 full-time equivalent jobs. The additional annual income generated for the city's economy by the development is estimated to be £9.3m.
The council has also approved the idea of a competition to remodel Stevenson Square, which borders The Hive. A detailed design brief will now be drawn up for Stevenson Square. Its transformation will include lighting and tree-planting schemes and the use of natural materials will be specified. The City Council will be looking for the owners of neighbouring properties to contribute towards the cost of the scheme.
Argent gained planning consent for the project in April last year. Completion is due for December 2009.