Saturday 4 December 2021
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Nottingham

Broadmarsh: Nottingham City Council lost £9million because of intu collapse, says report

Now, a soon-to-be-published report has found the ‘sunk costs’ are estimated to be around £9 million.

Around £9 million has already been lost due to the collapse of intu and the resulting failure of the Broadmarsh shopping centre project, a leaked report has suggested.

At the start of the first lockdown, work on the Broadmarsh shopping centre was halted but never restarted, and former owner intu was put into administration.

Ownership of the site was then handed over to the city council.

Previously, the leader of the council David Mellen said it was unlikely the council would get back all of the £18 million it had invested in the project.

Now, a soon-to-be-published report has found the ‘sunk costs’ are estimated to be around £9 million.

While this means the council has lost half its investment, the site itself has significant value to the council, given its city centre location.

A major consultation is currently ongoing as to what should now happen with the Broadmarsh shopping centre site, but the Government investigation has said the council should limit its funding of the project due to the financial pressure it is under.

It also recommended the Government place legally-binding limits on how much the city council is allowed to borrow.

The report is the result of a Government inquiry into governance and the financial situation at Nottingham City Council, brought about as a result of the collapse of Robin Hood Energy.

It found: “Broadmarsh is a major project which initially included the redevelopment of an existing shopping centre and bus station, together with a new library and the creation of new car parking.

“The development partner for the shopping centre Intu, fell into administration earlier this year and NCC has had to work with Intu’s contractor Sir Robert McAlpine to make the site safe.

“Works are ongoing to the site to allow the contractor to leave site in early 2021, with some additional ongoing costs likely until work recommences or the site is disposed of (sold).

“Spend to date on this element of the project is circa £18m of which approximately half is estimated to be a sunk cost.

“Works to the bus station and car park are scheduled to be complete in spring 2021.

“A full review is underway of options for the site, but it is highly likely to require significant capital investment.

“The council needs to ensure that any options considered limit the extent to which they will be required to fund the project.”

Asked whether he could rule out the Broadmarsh site being put on the market, the leader of the council Daviud Mellen said yesterday: “We’re in the middle of the big conversation about the Broadmarsh as to what the citizens and the residents who live here would like for that space.

“I have said a number of times we will not be able to redevelop the Broadmarsh by ourselves.

“It will need investors and partners to come alongside us – it’s not something that the city council can bankroll.

“We think that’s a tremendous opportunity for investors and others.

“There isn’t really a city centre site of this size that is available in any of the other big cities around the country and Nottingham has a lot going for it.

“This report (the rapid review) is a difficult one to read but there’s also much for our future that is to be hopeful about – the Castle opening next year, the college building already open and other things going on in our city centre, the tax and revenue people coming to work here, there’s a lot to be positive about.

“We really believe that there is a big opportunity for that site. We don’t know yet exactly how we will do that but we believe it is a great opportunity for us in the city for those who want to invest in our city.”