Unrealised potential

By Alaisdhair MacPhie, head of commercial property, Ricksons Solicitors

The apparently slow progress of Preston’s Tithebarn regeneration project could prompt potential tenants to look elsewhere, according to one expert

Wednesday October 12, 2005. After five years of planning, the contract was finally signed between Preston City Council and Grosvenor for a £450m development at the heart of England’s newest city. Over a year on, however, the fanfare has died down and Preston is left wondering if its Tithebarn regeneration project will ever get past the planning stage.

Tithebarn is a 1.5 million sq ft area scheme on a 30-acre site in the heart of Preston’s city centre. The development involves 700,000 sq ft of retail space, 150,000 sq ft of leisure space for bars, restaurants, gyms and cinemas, 100,000 sq ft of office space and at least 200 new residential units. The development is hoped to create a commercial boom in Lancashire’s administrative capital, with a ripple effect across the county. This aim is in line with national policy for the North West which identifies Preston after Manchester and Liverpool as “the key driver for future growth in the region” (Northwest Regional Development Agency).

But since the agreement was signed over a year ago there is still no financial backing, no key tenants and most importantly, no visible action. The property market is now moving on and the risk is that the real investors – the leading retailers and others – will go elsewhere.

Assembling key tenants is the biggest task any developer faces. Earlier this year, John Lewis was researching numerous sites across the country to decide at which location to open any new stores. Preston is waiting with bated breath on John Lewis’ decision – because without a big name, the deal with Grosvenor could be in serious doubt.
Grosvenor’s reluctance to commit to any further developments until a key tenant is found may have influenced Preston Council’s planning committee to give the go-ahead for proposals to turn the former Tradex site at the heart of the development, into the flagship European HQ for the multinational NCO Europe Ltd, despite objections from Grosvenor. This may not have improved relations between the two parties but it is the first sign that Preston Council may be getting frustrated with the slow progress that Grosvenor is making.

My concern is whether Preston Council is applying enough pressure on Grosvenor to move the project forward. It has to understand that a national developer such Grosvenor has many different projects in operation at any one time. Most importantly, Preston Council must bear in mind that Grosvenor is heavily involved with another major development in the North West, the Paradise Street Project in Liverpool. This has become a major concern for Grosvenor because of large cost overruns and losses of £50 to £90m. It is feared that as Liverpool is a higher priority regeneration location to Grosvenor than Preston, the Tithebarn project could be overlooked.

Preston Council is only one potential investment situation among several available to the major players in the regeneration field. Blackburn, a close rival to Preston, is the subject of a major retail development approval while another rival, Burnley, is the subject of a planning application by Henry Boot for a £55m scheme. In the meantime, no application has been lodged in relation to Tithebarn.

A development of this size is desperately needed in Preston for all sorts of reasons. In practice, the retail offer in the city is not particularly strong and is similar to many places. Preston needs to exploit its central location as much as possible and make up for poor development in earlier years.

There is clearly a demand for a quality retail offering with Preston's inhabitants travelling regularly to Manchester and other locations. Heavier fuel costs and poor travel links in the North West should be made to operate in favour of shopping locally and not elsewhere.

There is no real reason why Preston should not develop a vibrant city centre in the same way as other cities have done. There are several developments on-stream for new housing in the city centre which need to be accompanied by retail and leisure offerings – one problem with Preston at the moment is the lack of diversity and choice in these parts of the local economy. The culture has changed in Manchester rapidly over the last few years and is quite capable of change in Preston as well.

Rather than presenting an opportunity, the Tithebarn scheme is in danger of becoming a threat to city centre and edge-of-city development. Other sites are unlikely to be developed while the large scheme does not move forward.
That said, I do not underestimate the complexity nor the challenges of the scheme in Preston which is large by any standards and not helped by the fact that it is right in the centre of the city. The current road infrastructure in Preston is inadequate at best and a major factor at the heart of Preston’s redevelopment plans. A central question is whether the city council has an alternative plan to Tithebarn, where it is so heavily dependant on one developer. There are other local complications in that Preston – despite its city status – is not a unitary authority. Key areas such as highways are the responsibility of Lancashire County Council, which although based in Preston has responsibilities over the far bigger area of Lancashire. In practice, many decisions have to go through the County Council – which inevitably leads to delay and complication.

I for one do not wish to see Preston’s future hampered by lack of implementation of the Tithebarn project. For it not to progress now would mean the loss of great investment in time and expectation.

That would be a great disappointment for the city. Few locations are able to contemplate a new scheme of this size so near to the centre of town. I think I am not alone in saying that so far as the property world and the city is concerned we need real action now.

Preston City Council's chief executive Jim Carr said in response to this article: “This is a large and complicated scheme. Certainly, being a unitary authority would help but Grosvenor and ourselves are making progress and are optimistic about bringing it to fruition.”