News: Public funding set to be used to buy land for South Yorkshire Airport City project
South Yorkshire’s Mayor and leaders are set to approve a landmark deal to bring Doncaster Sheffield Airport and adjacent land into public ownership.
Rothbiz reported last year on a South Yorkshire Mayoral Combined Authority Board (SYMCA) decision to reopen the airport when it approved a £160m (£159.52m) funding package.
However, during negotiations with landowners, Peel, it was found that clauses in a proposed lease would impact upon the viability of the project. Specifically a solution to a turnover rent clause that was satisfactory for all parties could not be found.
Discussions continued and a change in stance from Peel combined with the potential use of devolved powers led to talks over the freehold purchase of the airport site and the adjacent Gateway East development land.
The SYMCA board is now being asked to essentially use funding that was approved to pay for the lease of the land, to instead cover the borrowing costs for purchasing around 1,000 acres from Peel.
Papers explain that borrowing is profiled to be repaid over a thirty-year period compared to a 125-year lease, with public control of the land offering the opportunity to "achieve the strategic ambition by reinstating the airport whilst at the same time developing the Gateway East land."
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No figures have been made public yet and, whilst bosses say that acquisition borrowing can be largely matched to grant funding, they identify a risk that FlyDoncaster Ltd, the 100% Doncaster Council-owned private limited company running the operation, will need to generate the cashflows required to repay the credit facility extended to it by SYMCA.
Another major risk to the project remains a potential legal challenge from other regional airports regarding the use of public money.
South Yorkshire's Mayor Oliver Coppard said: “I’m delighted to say that subject to formal approval of the MCA Board next week and then Peel, we’ve agreed a deal that means we’re taking Doncaster Sheffield Airport and adjacent Innovation Quarter employment land into public ownership. This is a deal that puts the future of DSA back in our hands and finally gives one of the biggest and best growth opportunities in South Yorkshire the platform for long-term success that it needs and deserves.
“Four years ago, we were told that our airport would be closing. But alongside [Mayor of Doncaster] Ros Jones, I said I would do anything I could to save DSA, and I meant it.
“Which is why after months of negotiations and the growing flexibility afforded to us by the government’s devolution agenda, today we can announce that we have come to an agreement for SYMCA to buy the airport and Innovation Quarter employment land from Peel.
“Subject to the agreement of the MCA Board next week, the airport and surrounding Innovation Quarter employment land will be owned and controlled by us, for us; the people of South Yorkshire. This deal means our future will be in our own hands again.
“When the airport closed, almost everything was against us; the owners did not want to sell, we had no legal powers to intervene or stop the airport from closing, and no backing from the government at the time. Today, the future for DSA is bright, with the airport back in our hands, the sky’s the limit.”
Chancellor John Healey, who is also MP for or Rawmarsh and Conisbrough, added: "This is concrete proof of the benefits of shifting power out of Whitehall and into the hands of the people who best know their local economies: our mayors and local leaders.”
“Local and regional jobs, innovation, opportunities and hope for communities and families across South Yorkshire, including in Rawmarsh and Conisbrough, will all flow from the hard work, determination and partnership which has delivered this outcome.”
“This is precisely the good growth in every postcode that the Government has made its central mission.”
FlyDoncaster Ltd website
Images: FlyDoncaster Ltd
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Rothbiz reported last year on a South Yorkshire Mayoral Combined Authority Board (SYMCA) decision to reopen the airport when it approved a £160m (£159.52m) funding package.
However, during negotiations with landowners, Peel, it was found that clauses in a proposed lease would impact upon the viability of the project. Specifically a solution to a turnover rent clause that was satisfactory for all parties could not be found.
Discussions continued and a change in stance from Peel combined with the potential use of devolved powers led to talks over the freehold purchase of the airport site and the adjacent Gateway East development land.
The SYMCA board is now being asked to essentially use funding that was approved to pay for the lease of the land, to instead cover the borrowing costs for purchasing around 1,000 acres from Peel.
Papers explain that borrowing is profiled to be repaid over a thirty-year period compared to a 125-year lease, with public control of the land offering the opportunity to "achieve the strategic ambition by reinstating the airport whilst at the same time developing the Gateway East land."
Advertisement
No figures have been made public yet and, whilst bosses say that acquisition borrowing can be largely matched to grant funding, they identify a risk that FlyDoncaster Ltd, the 100% Doncaster Council-owned private limited company running the operation, will need to generate the cashflows required to repay the credit facility extended to it by SYMCA.
Another major risk to the project remains a potential legal challenge from other regional airports regarding the use of public money.
South Yorkshire's Mayor Oliver Coppard said: “I’m delighted to say that subject to formal approval of the MCA Board next week and then Peel, we’ve agreed a deal that means we’re taking Doncaster Sheffield Airport and adjacent Innovation Quarter employment land into public ownership. This is a deal that puts the future of DSA back in our hands and finally gives one of the biggest and best growth opportunities in South Yorkshire the platform for long-term success that it needs and deserves.
“Four years ago, we were told that our airport would be closing. But alongside [Mayor of Doncaster] Ros Jones, I said I would do anything I could to save DSA, and I meant it.
“Which is why after months of negotiations and the growing flexibility afforded to us by the government’s devolution agenda, today we can announce that we have come to an agreement for SYMCA to buy the airport and Innovation Quarter employment land from Peel.
“Subject to the agreement of the MCA Board next week, the airport and surrounding Innovation Quarter employment land will be owned and controlled by us, for us; the people of South Yorkshire. This deal means our future will be in our own hands again.
“When the airport closed, almost everything was against us; the owners did not want to sell, we had no legal powers to intervene or stop the airport from closing, and no backing from the government at the time. Today, the future for DSA is bright, with the airport back in our hands, the sky’s the limit.”
Chancellor John Healey, who is also MP for or Rawmarsh and Conisbrough, added: "This is concrete proof of the benefits of shifting power out of Whitehall and into the hands of the people who best know their local economies: our mayors and local leaders.”
“Local and regional jobs, innovation, opportunities and hope for communities and families across South Yorkshire, including in Rawmarsh and Conisbrough, will all flow from the hard work, determination and partnership which has delivered this outcome.”
“This is precisely the good growth in every postcode that the Government has made its central mission.”
FlyDoncaster Ltd website
Images: FlyDoncaster Ltd
