Liverpool City Council is in talks with developer Glenbrook Property about funding a £25m project to transform a vacant former HMRC office building into one of the country's largest private residential rental schemes.
The Queens Dock office building on Liverpool's waterfront has been empty since September 2012, when the last remaining HMRC staff were relocated.
Consent was granted to Glenbrook Property and building owner Mapeley Steps in March for a full conversion from commercial office space to residential, with a mix of 240 studio one, two and three-bedroom apartments. A design statement for the scheme was provided by Liverpool-based Brock Carmichael Architects.
Place North West understands that the deal under discussion would see Liverpool City Council borrow the money required for Glenbrook to buy the building from Mapeley and redevelop it.
In return, the council would get a 60% stake in the completed apartment block. The council would also benefit from interest on loan repayments, a share of rental income, and a 60% share of the proceeds of any subsequent sale.
Without the redevelopment, there are concerns that the building's office space would be difficult to let in the current market. The development also provides an opportunity to further improve an area within close proximity to the Echo Arena, Albert Dock and Liverpool Exhibition Centre development.
Ian Sherry, of Glenbrook Property, said: "Queens Dock represents a fantastic opportunity to create one of the largest dedicated private residential rental schemes in the UK and in the process brings back into use what would otherwise be a large vacant office building on one of Liverpool's prime waterfront sites."
Sherry said that Glenbrook could have raised the money itself but that it would potentially add years to the process of transforming the building, delaying the redevelopment of the overall waterfront area.
Built in 1991, the 300,000 sq ft building was owned by HMRC until it was sold to Mapeley Steps as part of a property disposal sale.
It is situated on an 8-acre site and spans the internal dock area.
Liverpool City Council says the deal would bring the HMRC building back into use and provide a catalyst to bring in vital funds for the city.
If approved, the deal would contribute to the on-going regeneration of Kings Waterfront, including the delivery of the new Exhibition Centre and Hotel on the adjoining site.
The proposals are subject to legal clearance and will be fully risk-assessed and scrutinised by the district auditor before they can be given the go-ahead.
Mayor of Liverpool, Cllr Joe Anderson, said: "This is a strategic investment opportunity which has the potential to bring a major waterfront building back into use and deliver much-need new homes.
"It would also provide continued momentum for the regeneration of the Kings Waterfront, which is being transformed through the delivery of a world class Exhibition Centre and which is set to be further revitalised through the Kings Dock Master Plan.
"At a time of inertia in the economy, it's vital that we work creatively with the private sector.
"These proposals are the latest example of how we are seeking to use our borrowing power and target our resources effectively to help kick-start development and invest in assets that bring in new income streams for the council.
"We will be making sure we receive all the appropriate legal and financial advice to commence the deal so we are satisfied that we are getting value for money and the proposals will also be scrutinised by a council select committee."