A European procurement decision concerning a Greek council's development project has forced Rochdale council to re-open its developer selection competition for the town centre.
The council today confirmed it will re-run the contest, originally won by Wilson Bowden, for the £250m town centre redevelopment after complaints by Sultan Properties, one of the runners up.
Roger Ellis, Rochdale chief executive, said: "This has been a difficult decision for the council to make, but it has been taken with the best interests of the town centre's regeneration and the people of Rochdale in mind.
"There is real momentum in our town centre plans, assisted by the recent news about Metrolink and the funding approval for the new bus station. A drawn out legal dispute would have led to significant delays to the town centre redevelopment, as well as substantial costs to the public purse. This way we can re-run the process with the minimum delay and with the benefit of knowing the implications of recent case law."
He also said it should mean a delay to the retail element of the development by around one month and work can only start once the new interchange and river-side civic centre are complete. Those projects are going ahead as planned but will not be completed until 2011 so the main town centre redevelopment cannot start until then.
A developer selection process took place in 2007, resulting in the council's town centre committee of elected members choosing Wilson Bowden as the preferred developer. After the decision was announced, objections were raised by Sultan Properties, owner of the Wheatsheaf Shopping Centre. Sultan had been a joint venture partner with Manchester-based developer Ask in the competition, although Ask was not a complainant. Sultan's main objection concerned the "weightings of the award criteria and sub-criteria", the council said.
The council statement today said all three short-listed developers received the same information and the European guidance for tenders known as OJEU was strictly followed – but this did not advise that the award weightings should be released.
However, since the council made its decision, the Greek case decided by the European Court of Justice ruled the procedure should reveal the weightings. A further English High Court case then ruled on similar issues as the Greek case on 7 July 2008. The council has been advised that despite happening after Rochdale's decision, these cases would be considered in any legal proceeding.
Sultan Properties has agreed as a result to bring an end to the current legal proceedings.
The council, English Partnerships and Rochdale Development Agency will continue to progress the assembly of the site and the other advanced works, notably the construction of the new Rochdale Interchange bus station and the new civic offices to replace the Municipal Offices. The prospect of funding being made available for the extension of Metrolink into the town centre is also a major step forward. The re-run process will be a fresh start and all developers will be given the same opportunities.
Alan Black, director at DTZ, the commercial advisers to the council, commented: "This is extremely unfortunate and somewhat ironic – I have been closely involved in many major town centre developer selection competitions over the last few years and, without doubt, the process followed at Rochdale was the most thorough and transparent. The Greek case was decided after the developers' submissions had been evaluated and, whilst it provides new guidelines on certain technical aspects of the process, it seems perverse that this decision should be applied retrospectively."
Diane Goodwin, senior regeneration manager for English Partnerships, added: "We maintain our support of the council and RDA in selecting a preferred developer and will continue to support their land assembly programme."