Documents have revealed Trafford CCG is exploring the conversion of the Altrincham Health & Wellbeing Centre into office space at a cost of £7.2m, despite the £24m healthcare facility only completing earlier this month, as discussions over costs with its previously-agreed tenants continue.
Construction work on the 88,000 sq ft building next to the market completed earlier this month at a cost of around £24m, but it has remained empty after a rethink by the CCG, which said it would be “revisiting its long-term strategy” for the site.
Six tenants were due to move in: St John’s Medical Centre; Barrington Road Medical Centre; Mastercall out-of-hours; Trafford Care Co-ordination Centre; Greater Manchester Mental Health NHS Foundation Trust; and Pennine Community Services NHS Foundation Trust.
However, papers due to go before next week’s CCG meeting have revealed the project is still facing a £1.9m funding gap before any of the partners can move in.
The papers show that all six tenants would not move into the building unless they had a cost-neutral position – that is, the cost of the move would have to be met by the CCG and NHS Property Services. In addition, five of the six tenants had also been offered a cost-neutral move at a previous date; only Pennine had not been offered a cost-neutral move, with its move-in costs estimated at £500,000.
St John’s Medical Centre said the move would see practice costs increase by around £70,000 per annum, while Greater Manchester Mental Health’s move would cost nearly £375,000 per year based on it taking 9,200 sq ft in the building.
The CCG’s estimates leave it with a net funding gap of £1.95m, which also assumes a contribution of £400,000 from the two GP surgeries, and subsequently it said it was “no longer in a position to commit to previous assurances given to providers regarding cost neutrality”.
As a result, the CCG has said its “preferred option” would be to convert the building from medical use into commercial office space. Although the CCG is not able to sign off an alternative use for the building, it can put a business case together to put forward to NHS Property Services to convert it.
NHS Property Services commissioned Cushman & Wakefield to explore the feasibility of alternative uses for the building, including office, residential, leisure, and retail.
This report found that offices would be the only viable use of the building, although this would require “substantial change to the building services and internal configuration”.
A best estimate of this cost at present is £7.2m, and the use of the building as offices over the next 10 years is stated as being “not economically viable in its own right”.
However, NHS Property Services has requested whether office use would be viable over a longer period.
The building, completed by contractor Bowmer & Kirkland and developer Citybranch, features a number of bespoke features and has been fitted out to NHS specifications, and the specifications of the original tenants.
Moving forward, a programme board for the project has been established, which is aiming to explore other healthcare options both within Trafford and Greater Manchester, as well as NHS England, for the building by the end of November. It has also agreed to look at other non-healthcare uses, while a phased move-in of potential tenants is also being considered.
A further update on the building will be provided to the CCG’s governing body in January 2019.
This week, Citybranch has completed the sale of the building to Canada Life, which agreed to forward-fund the project. NHS Property Services has the option to acquire the freehold lease of the building after 30 years for a nominal sum of £1.
NHS Property Services is paying £1.6m in rent on the building per year, along with £750,000 in rates, insurance, and facilities management. Along with a £111,000 facilities management contingency budget, this amounts to £2.4m a year.
Altrincham Library, set to relocate from its existing site at Clarendon House, will move as planned and is set to open before Christmas. The council is required to give a six-week notice to the library’s existing users before it can open at its new location and is planning to advance this in the coming weeks.
A spokesman for NHS Trafford Clinical Commissioning Group said: “The new leadership team at the CCG is looking at all options for the site. The preference for the CCG is to fully explore all options which will provide for health and well-being related uses, prior to considering any non-health use of the site. Going forward, any decision made will be on the basis of what is best for the people of Trafford and taxpayers. The CCG’s Governing Body will be kept fully updated.“