A multi-million pound fund is to be created to pave the way for the construction of homes, shops and leisure facilities across Peterborough.
Bosses of Peterborough City Council have reached outline agreement with UK and overseas investors to create a Peterborough Investment Fund of £130million.
The hope is that the fund will pave the way for the regeneration of sites that are proving difficult to develop such as the redevelopment of Fletton Quays on the South Bank.
However, the fund, which will be managed in the UK but domiciled in Guernsey, is expected to take up to two years to finalise.
Decisions on which sites the fund will invest in will be made by a so-called Joint Venture (JV), made up of two councillors and two representatives of the investors. Each side will contribute £3 million.
The JV will carry out the preparation and planning work. Once that is completed the fund’s investors will create and finance a separate company to deliver each project.
The council’s money will be cash already earmarked for development and section 106 money that comes from developers to provide community infrastructure.
Council leader Councillor Marco Cereste said the deal, thought to be the first of its type in the country, would be a major boost to the city’s economy and lead to the creation of hundreds of jobs and save money.
Cllr Cereste, said: “While this proposal is potentially incredibly exciting for the city, as a local authority, we have to ensure that taxpayers’ money is protected every step of the way.
“A lot of work has gone on over the past few years to put together a proposal to enable us to unlock some of those major development sites in the city we have previously struggled to get off the ground.
“In this very difficult financial climate when government is giving less and less funding to local authorities we need to come up with innovative new ways of attracting big investment into Peterborough.
“Every development will be carefully considered and if we don’t want to go ahead with a project it doesn’t happen.
“If a project doesn’t stack up financially, it doesn’t go ahead.
“We are in the driving seat and we can decide to have zero risk on a project by just selling land for its market value, or share in the upside.”
The proposed agreement is the result of the city council’s decision in 2009 to begin discussions with UK and overseas investors looking for long-term partnerships that can help deliver stable, predictable incomes from development projects.
Cllr Cereste also said that as part of the council’s drive to improve efficiency and reduce its costs, officers were looking to reduce the number of buildings the local authority rents and own.
The money men
Mystery surrounds the identity of the investors that are said to be ready to pledge £130 million to secure Peterborough’s future.
But Peterborough City Council officials say there are good reasons for the anonymity.
A spokesman said: “We are talking to a number of global investors in the UK, Europe, Middle East and Far East - sovereign funds, insurance funds, pension funds and other collective investment schemes. In fact, we are talking to more investors than may end up investing in the fund.
“We cannot disclose any names until the council confirms that it wishes to proceed and we have gone to the next step.
“The Fund Management Company is listed on the Alternative Investment Market stock exchange and is regulated in the UK. It means that every pound invested in the fund would be subject to the UK’s unparalleled compliance checks and scrutiny which will ensure that the money has come from a legitimate and approved source.”
Under the proposal, the council would move a number of back-office staff from offices that it rents, such as Manor Drive and Stuart House, to new offices on Fletton Quays, which the fund would build to a modest specification and rent to the council at the market rate.
The arrangement would see the council becoming an ‘anchor tenant’ on the site, which will kick-start wider regeneration, while allowing the council to reduce the number of its offices and redevelop older and less efficient buildings that are becoming increasingly expensive to maintain.
Other sites under consideration include the Wirrina car park, which could be used for mixed tenure and sustainable homes, the Pleasure Fair Meadow car park, that could get a new multi-storey car park and homes and Bayard Place/Market car park, which could be used for homes.
Changes are planned at Peterborough Town Hall, which would be retained by the council, but could become home to the council’s customer service centre which is currently on the ground floor of Bayard Place, Broadway. A section of the town hall may also be used for teaching by the University Centre Peterborough.
Iain Crighton, managing director of Crightons of Peterborough and president of the Peterborough Chamber of Commerce, said, “This is a bold but necessary step in taking forward the regeneration of the city and in particular the riverside area.
“It gives the city and surrounding areas the opportunity to take that first step forward at times when funds are not readily available.
“I see this as an opportunity for business leaders to work with the joint venture to ensure that the development is right for all parties.”
Peterborough town planning consultant, David Shaw, said, “It has the potential to unlock a number of sites within the city and get growth moving. I think that this will be broadly welcomed within the city.”
Tom Bingham, associate director of group communications at BGL Group in Peterborough, said: “Any investment in the city that attracts new people, new businesses and new innovation is something we would wholeheartedly support and welcome.”
Council cabinet meeting:
The issue will be discussed by members of the council’s cabinet on Monday, 24 February - see meeting agenda, including “Funding Peterborough’s Future Growth”.