Monday, July 15, 2019

News: Forge Island lease agreed


Rotherham Council has signed a key legal document that boosts the viability of the Forge Island redevelopment and enables its preferred private sector partner to press ahead with securing financing and planning permission.

Having secured the land from Tesco, and surrounding land such as the law courts, the authority went out to the market last year in an effort to realise its vision for a £60m leisure-led development on the key town centre site.

Muse Developments was chosen as the Council's preferred partner with a proposal that includes a cinema, food and drink outlets and a hotel. The leisure facilities will be set within an attractive public space and will include a new pedestrian bridge connecting to the rest of the town centre.

The Council's cabinet approved a head lease approach in December which requires that the developer raises funding for the total development costs and builds out the scheme in return for the Council taking a head lease of the completed development over 35 years.

An update shows that an "agreement for lease (AFL)" was signed by Muse and the Council in June and this allows the developer to progress with detailed design, obtaining planning permission and securing end users.

No financial details have been published due to being commercially sensitive but the update shows that a 250 year lease with Muse is proposed. Earlier estimates were that the first phase would cost £35m at current prices.


Tim O'Connell, head of RiDO, the regeneration arm of Rotherham Council, said in a report: "The AFL sets out a series of pre-conditions which if satisfied, trigger the Council granting a lease of Forge Island to the developer and allow the developer to commence building the scheme.

"It is important to note that the AFL is not the agreement of the final proposal in respect of either the detailed scheme or the financial approach but puts in place the agreements to ensure that the final proposal will be compliant with the Cabinet resolution of December 2018."

Pre-conditions include obtaining planning permission, securing funding, demonstrating that the development is viable, and securing pre-lets with a cinema operator, hotel and other tenants on terms that are acceptable to the Council. Dates have been set for the conditions.

The agreement still includes an option for the developer to ask the Council to take an over-riding lease of the scheme. Reducing some of the risks for the developer, this would involve the authority subletting and collecting rents from operators, which would generate an income stream to fund the head lease costs.

O'Connell added: "Muse has commenced negotiation with occupiers and the Council is engaging in these negotiations alongside Muse. There are variations in the operating models of occupiers which have an influence design and it is therefore helpful to progress these discussions swiftly.

"It is anticipated that Muse will commence obtaining planning permission by engaging in pre-application discussions over the next 2-3 months and submit a full planning application before the end of the year."

Exploratory work on the Council's flood alleviation project is underway. A completion date of 2022 for the cinema was discussed at a recent Rotherham Together Partnership event.

Forge Island website

Images: RMBC / Muse


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