Pembrokeshire County Council is looking to buy the Riverside Shopping Centre, Wilkinson’s store and Perrot’s Road carpark in Haverfordwest, to support its ambitious regeneration programme for the town centre.
Cabinet approved the acquisition proposal on Monday (30th November) on condition that it is purchased is at less than market valuation.
While that process is ongoing, Cllr Paul Miller has moved to explain the rationale behind it and discuss some of the issues which have been raised.
“I’m really pleased that this proposal has generated interest and I would like to try and answer for the public some of the questions which have come up so far,” said Cllr Miller, Cabinet Member with Responsibility for Economic Development.
“I’d also like to try and explain how our plans for the Riverside area fit within our wider Economic Development Plan for Pembrokeshire.”
Why is the Council doing this?
“The Council has already developed a wide-reaching plan for the transformation of Haverfordwest.
“We’ve opened Glan-yr-Afon library and cultural centre, returning footfall to the town centre, we’re soon to start on site on Western Quayside – the former Ocky White building – creating an amazing food and beverage hub.
“We’re working on linking Bridge Street directly to the Castle and are committed to the wholesale redevelopment of the town’s unfit multi-storey car park.
“However, right in the middle of all those project sites, there is a fairly enormous space (in excess of 3 hectares) currently in the ownership of a single third party and that’s the Riverside Shopping Centre.
“Securing control of this site makes sense on a number of levels – not least because it enhances our ability to deliver on a whole-town plan. It also links directly to sites already in the Council’s ownership.”
If it goes ahead, how much will the acquisition cost?
“While negotiations are ongoing, and it should be stressed it may still not prove possible to agree a purchase price acceptable to both parties, I do not expect the Council’s contribution to the purchase price to exceed £700,000 including land tax charges.
“There are some maintenance liabilities we’ve identified which will be in addition to that sum.
“This level of capital funding is available from within the Council’s Property Investment Fund and so will not require additional borrowing. Nor will it directly impact on the Council’s revenue budget for other services or Council Tax levels.”
Isn’t this a bit risky, given the current economic climate?
“We’re going into this ‘eyes open’ to the worst case. Our worst-case scenario takes into account the current state of the market and the lease positions of the existing tenants.
“We know that more tenants will leave the centre over the next 12 months and we know things are going to get worse before they get better. Despite all that, our worst-case scenario still shows the centre to make a revenue surplus both in the particularly challenging short term and then to a greater extent in the medium term.
“The financial effect of the short term challenges are included in the modelling and actually the purchase price reflects that fact too. In addition, we anticipate further vacancies in the short term might actually be desirable, making easier some of the physical changes to the site that will inevitably be required.”
Isn’t there a risk this all goes wrong and costs us money in the long run?
“There is always that risk. It’s no different to the risk associated with running our current industrial estate units. If all the tenants suddenly disappear, you’re left with no income to use to maintain the site.
“In this case, we’re very aware of the risks. We’re aware of the wider market position, of the businesses under pressure and aware of the number of leases expiring in the coming years.
“The Council’s officers and advisors put together three scenarios for cabinet to consider. A Best, Worst and Reasonable case. We focused our thinking around the worst-case model and that has driven our thinking on purchase price and determined our appetite for this at all.
“That worst-case scenario still shows the centre to make a revenue surplus both in the particularly challenging short term and then to a greater extent in the medium term.”
Retail is a ‘dead duck’ – what are you thinking?
“I accept completely that there is no future in retail-only town centres. We are not purchasing the Riverside because we think we’ve spotted something no one else has and that suddenly there is going to be some town centre shopping renaissance.
“We do however think our town centres have a future, just a different future. The Grimsey Review (just one example of the many such reviews into town centres) is clear both on the need for local leadership and public sector investment in transforming town centres. The review also has as one of its key findings the following; ‘There is a need for all towns to develop plans that are business-like and focused on transforming the place into a complete community hub incorporating health, housing, arts, education, entertainment, leisure, business/office space, as well as some shops, while developing a unique selling proposition (USP)’.
“That’s exactly what this purchase is about. It allows us to support a whole town plan for transformation not to ensure Haverfordwest continues to provide what people used to want but to ensure Haverfordwest provides what people want know and what people will want in the future.”
Aren’t you interfering in the role of the private sector?
“We know that the private sector is not going to repurpose our town centres for us. We also know how the Riverside has fared over the years in remote ownership. In my view we have a choice. We either say we don’t care about the town centre and it’s for the private sector to sort out, or, we recognise the role which a quality built environment plays in the wider offer of the County – and in turn how that supports economic activity.
“What I want to ensure is that we provide the local leadership and vision needed to see a transformation happen in Haverfordwest. We don’t think for a second we can bring about that transformation on our own but we do, absolutely, have a key role to play. In this case, that role is in securing the asset upon which future regeneration interventions will be built.”
Will the Council be managing the centre, if the acquisition goes ahead?
“The authority will not be directly managing the asset either in the short or the long term. This will be done by others and the costs of that management has been included in all of our modelling. To repeat, even our worst case model shows the site always making more income than it costs to run.”
Why should the Council get involved in the regeneration of town centres?
“To start with, because no one else is going to. I believe, strongly, that the quality of key town centres is important for the wider economic wellbeing of Pembrokeshire. We could, of course, just look the other way and say this is something for the private sector but I believe to do so would be a mistake.
“I do not believe that the local authority can transform Haverfordwest Town Centre on its own.
“However, I do believe we have a clear role to play in support and through the strategic acquisition proposed we can make that transformation deliverable.
“Beyond the strategic acquisition we are already in discussion with prospective private sector development partners and we anticipate taking those discussions forward with more vigour if the sale is completed.
“We don’t have a dream of doing this all on our own – but we know we have to play our part if we’re to deliver.”