Chester Northgate Planning Application June 2019 4

Chester Northgate on course for 2020 start as funding gap widens

Charlie Schouten

Cheshire West & Chester is set to start work on the long-awaited project in the New Year but has warned its delivery cost has increased by nearly £10m, with funds to be diverted from elsewhere within the council’s budget.

The estimated development cost of the mixed-use project, which features a new market, cinema, a multi-storey car park, and leisure, is now £69.6m, up from a previous estimate of£60m made around a year ago.

In total, the council expects the funding gap – the amount the council would invest in the scheme that is not supported by the commercial value generated by Northgate’s forecast income streams –  is now just shy of £14m, a increase of £3.7m on previous estimates, again made last year.

Although hybrid planning permission was originally secured in 2016, the council rejigged the proposals with an alteration to the existing consent along with a new planning application for a multi-storey car park. This was approved in September this year, with AHR brought in to replace former architect ACME.

The change in the planning consent is cited as the main reason for the council’s cost increases;

In a report, the council said: “The fact that there is a gap is not a surprise as the relocation of a public market, the delivery of a cinema and the delivery of critical infrastructure works, including highways and drainage works are not things that traditionally would deliver a positive development value.

“However, what this development does do is begin the redevelopment process and creates the foundation for further development across the rest of the Northgate site and provides much needed confidence that should stimulate further development in the city.”

To plug the gap, the council is looking to reallocate funds from elsewhere. The estimated £3.7m funding will come from a combination of different areas, including highways work, public realm and regeneration strategies, carbon reduction, and contributions from Section 106 and Community Infrastructure Levy funds.

The council also warned a final cost for the construction contract, which is being worked up by Vinci, is not yet set; while £6m had been allocated to bring Northgate’s first phase through planning and pre-construction, a further £1.5m has been allocated.

Under the council’s timeline, work is set to begin in the first quarter of the year, once the final contract with Vinci is agreed, and the project’s budget is signed off in February 2020.

This is due to re-programming of works, including some to de-risk the site ahead of construction beginning. This is to be funded from borrowing.

The council has previously been criticised for its spend on the project; Freedom of Information requests showed the council had spent more than £2.1m in consultancy fees up to July last year.

The tenants already signed up to the first phase of Northgate are Zizzi’s, Cosy Club, Tapas Revolution, and cinema operator Picturehouse. The council added it was in negotiations with a number of other prospective tenants.

The professional team includes Planit-IE; Curtins; Avison Young; Hoare Lea; Rivington Land; Gardiner & Theobald; Aecom; Vectos; WMC; Town Centre Parking; and Fraser Blair Associates.

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Much needed strategic investment – just do it!

Chester needs to get its act together – in recent years it’s lost it’s police HQ, Council offices and direction (generally).
Further, several thousand homes next to it’s crown jewel business park should see a reasonable number of its tenants move elsewhere – given that there is only a single road access to the City Centre.

By PB

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