News: Council prepared to fully fund Forge Island for £46.8m
Rotherham Council has got the contracts in place if it is to fully fund the Forge Island regeneration scheme in Rotherham town centre.
Rothbiz revealed last week that funding for the key leisure-led project was under review and new documents show that the external funding available to the Council's delivery partner, Muse, for the delivery of Forge Island "has significantly reduced."
Contracts for the scheme show a price of £46.8m and the authority's cabinet are due to meet next month to decide on the options available to facilitate delivery. Tender documents show that the council acting as funder "is the only reasonable option" and the agreement between the Council and Muse (who were selected as the preferred partner for Forge Island in 2018) is being updated.
Tender documents explain: "The project envisaged that Muse would secure external funding but allowed for alternative options, including for the Council to partially or fully fund the development to be considered.
"Due to unforeseen market conditions, particularly shifts in the gilt market, the external funding available to Muse for the delivery of this project has significantly reduced. The Council was notified of this issue on the 13 September 2022.
"Against this backdrop, the Council intends to enter into a funding agreement with Muse to fund and retain the project and will take market standard security relating to this funding, including an obligation on Muse to develop in accordance with an agreed specification.
"The Council considers that the project is strictly necessary as a key part of the Rotherham Town Centre Masterplan and that acting as funder is the only reasonable option to secure delivery of the project (there being no alternative funding options available within a reasonable timescale or within a cost that would make the scheme viable) and considers that this proposal will secure best value for the Council."
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The need for urgency is also explained as the construction costs for the project is currently tendered and fixed for a very limited period and the deal with Arc Cinema to anchor the scheme has a date for satisfying conditionality of December 31 2022.
The document adds: "The scheme will no longer be viable if the cinema agreement falls away, setting delivery back likely in excess of 2-3 years and jeopardising the entire delivery of the scheme. Recent developments in the cinema market indicate that identifying a replacement would be very challenging."
The council has therefore set up a new £46.8m contract with Muse stating that the developers have done the previous work to get to this stage and that there is insufficient time to conduct a new procurement procedure.
The procurement description states: "The Council intends to enter into further contractual arrangements with its Developer to take the Forge Island development opportunity forward and realise the Council's aspirations for the site, within the context of challenging market and financing conditions."
The initial estimated total value of the contract is £46,805,664. £3,012,012 is the cost of the enabling contract, with £43,793,652 making up the remaining costs from the total value. The total construction cost is £33,726,000.
Cabinet is due to meet on October 17 where it will "choose from the full range of options for delivery including further supplementing or replacing what was expected to be privately raised capital with the Council’s own borrowing and capital resources."
Forge Island website
Images: RMBC
Rothbiz revealed last week that funding for the key leisure-led project was under review and new documents show that the external funding available to the Council's delivery partner, Muse, for the delivery of Forge Island "has significantly reduced."
Contracts for the scheme show a price of £46.8m and the authority's cabinet are due to meet next month to decide on the options available to facilitate delivery. Tender documents show that the council acting as funder "is the only reasonable option" and the agreement between the Council and Muse (who were selected as the preferred partner for Forge Island in 2018) is being updated.
Tender documents explain: "The project envisaged that Muse would secure external funding but allowed for alternative options, including for the Council to partially or fully fund the development to be considered.
"Due to unforeseen market conditions, particularly shifts in the gilt market, the external funding available to Muse for the delivery of this project has significantly reduced. The Council was notified of this issue on the 13 September 2022.
"Against this backdrop, the Council intends to enter into a funding agreement with Muse to fund and retain the project and will take market standard security relating to this funding, including an obligation on Muse to develop in accordance with an agreed specification.
"The Council considers that the project is strictly necessary as a key part of the Rotherham Town Centre Masterplan and that acting as funder is the only reasonable option to secure delivery of the project (there being no alternative funding options available within a reasonable timescale or within a cost that would make the scheme viable) and considers that this proposal will secure best value for the Council."
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The need for urgency is also explained as the construction costs for the project is currently tendered and fixed for a very limited period and the deal with Arc Cinema to anchor the scheme has a date for satisfying conditionality of December 31 2022.
The document adds: "The scheme will no longer be viable if the cinema agreement falls away, setting delivery back likely in excess of 2-3 years and jeopardising the entire delivery of the scheme. Recent developments in the cinema market indicate that identifying a replacement would be very challenging."
The council has therefore set up a new £46.8m contract with Muse stating that the developers have done the previous work to get to this stage and that there is insufficient time to conduct a new procurement procedure.
The procurement description states: "The Council intends to enter into further contractual arrangements with its Developer to take the Forge Island development opportunity forward and realise the Council's aspirations for the site, within the context of challenging market and financing conditions."
The initial estimated total value of the contract is £46,805,664. £3,012,012 is the cost of the enabling contract, with £43,793,652 making up the remaining costs from the total value. The total construction cost is £33,726,000.
Cabinet is due to meet on October 17 where it will "choose from the full range of options for delivery including further supplementing or replacing what was expected to be privately raised capital with the Council’s own borrowing and capital resources."
Forge Island website
Images: RMBC
3 comments:
Not going to happen is it?
What do you expect with a town run like a small country parish,by clowns....and a population who constantly elect em!
Should've done this years ago ,then maybe it would already be built,it's what councils up and down country do too get projects moving.
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