Cancel Old River Lane, Better Alternatives. A Letter to Julie Marson MP.
Dear Julie Marson,
This letter is about our worries for Bishop’s Stortford town centre jobs and businesses and tries to explain a few things that could be done quickly and easily to help the town. There is also a genuine offer to work together to define a local support scheme for businesses.
You do not need us to tell you how businesses are worried about surviving the Covid period, the initial heavy lockdown losses and then finding a way through the social distancing, to build up trade to get back to self sustaining levels of profitability, whether months or years in the future.
We need carefully crafted financial support schemes from the government, flexible both financially and ideologically. It is good to see Rishi Sunak seems willing and capable. It is particularly good to see the austerity and magic money tree rhetoric ditched. The diversity of the problems mean he is never going to be able to support all businesses in all circumstances. So Bishop’s Stortford town centre is only going to come out of this pandemic with fewer businesses, possibly much fewer.
Stortford, could be hit relatively badly because of the many nighttime economy businesses: restaurants, pubs, cafes, coffee shops that will need social distancing completely removed to stand a chance of getting back to self sustaining profitability. Also the town’s major single employer, Stansted airport, is shedding vast numbers of jobs and not expecting to get back to previous traffic levels for years. Stortford’s recovery is going to be more extended than most and especially dependent on the government’s financial support schemes tapering - for businesses and employees - over a relatively longer timescale that is appropriate to this area.
Hence as well as the national schemes we could be supportive of a local scheme to invest in Stortford. The scheme we suggest would operate through an entity separate from East Herts Council (EHC) and purchase a small percentage of existing core town centre business premises, working to a strict business model, with the aim to accelerate regeneration by encouraging new businesses to enter the town and during the initial Covid period being very supportive mainly through flexible rent and rent holidays. Then after Covid drive a re-rating of rents down to longer term sustainable levels, including influencing where possible other businesses to agree lower rents. We are also open to other effective solutions.
There is already a local example of how effective this could be. The Anchor Street Leisure complex has partially revived after being bought out at a much lower capital value than the previous owners paid and has successfully repopulated some empty units, presumably after also rerating rents downwards and/or giving rent free periods.
Would this local scheme not be prohibitively expensive? Where would the money come from? Actually it would be considerably cheaper than EHC’s currently proposed investment in the town centre, and likely hold its capital value better in the longer term and create a more supportive environment for existing businesses, if not landlords.
We appreciate your difficulty in coming from outside the area and being expected to understand longstanding local issues, especially where you are being offered conflicting, not always impartial, advice. We aim to describe a thorough background of the local situation, that you are unlikely to be receiving if you are only talking to Tory colleagues, to provide the basis for considered decisive decision making. Hence this long, but hopefully informative letter.
Looking at EHC’s current central Stortford investment that they refer to as regeneration, call the Old River Lane development (ORLdev). EHC plans to develop a new shopping area around ORL. As Derek Crowther’s open letter to you [Bishop’s Stortford Independent, Apr 8-14] said, many residents are ‘incredulous’ that ORLdev is still going ahead.
The development did originally make some sense when it was first proposed over 11 years ago. Stortford was coming off the back of 16 years of continuous economic growth and the town centre was doing well, up to the global financial crisis admittedly. It seemed viable that a new shopping area could be created and expanded into successfully.
The idea of ORLdev was latched onto within the local Tory party and EHC, and their enthusiasm has been maintained until today. Unfortunately that enthusiasm is not based on any economic reasoning as the business case, over time, has become less and less viable to the point of ‘incredulity’ that it is still going ahead.
Stortford town centre, in the last decade, has had a long slow decline due to online shopping and austerity. Two of the three department store type shops have closed along with other luxury shops, largely losing Stortford’s reputation for high end shopping. Many retailers have failed or moved on, to be replaced by coffee shops, discounters, charities or hairdressers/barbers, so losing considerable diversity of shopping. Anchor Street Leisure complex and Florence Walk have half (or more) emptied making them better candidates for (re)development before ORL. Lack of parking, particularly to the south and Jackson Square car park gridlocking when busy, have also put many people off shopping in the town. There are currently (start May) over 20 commercial/retail units empty or closing down in the town centre.
But, there is still plenty of room for optimism as Stortford town centre is surviving better than most. The core South/Potter/North St has high footfall areas, there is a steady stream of new businesses starting up, we have a rich choice of restaurants and most of the central pubs have survived. Sainsbury’s, with its central location, is fulfilling its anchor tenant role well. The significant future population growth within the town and the surrounding rural catchment area gives us the opportunity to preserve a relatively popular shopping and nighttime destination.
What is a professional property developer’s view of ORLdev ?
The first attempt at ORLdev started in 2009 when EHC sold the site, cheaply for £2.35m, to Henderson Global Investors. They made plans for a £105m development of a John Lewis store, 36 shops, 100 flats, underground car park, cinema and hotel. By 2015, Henderson said it was no longer commercially viable and put the, now expanded, site up for sale. EHC bought the site back for £19.55m, making a loss of £15.05m on the original site. The justification for the buyback was claimed to be the, possible, 5-6% future rental income. This ignored the real capital loss to taxpayers that made Henderson the only winner in the transaction.
EHC’s secretive decision making, avoidance of democratic scrutiny, weak negotiating and huge financial losses led us to calling this the ‘Henderson Causeway scandal’.
Whatever lessons that should have been learnt from that debacle were not because EHC’s one party dominance meant scrutinising deferred to party loyalties and there was no worthwhile autopsy.
EHC then made plans for the current ORLdev consisting of a £19m Northgate End multi-storey car park(MSCP) and a £28m arts centre, both publicly financed. A private developer was solicited to specify, finance, build and profit from a ‘quarter’ of shops, restaurants and flats. The developer wants to up the flat count to 150 and has not said how many commercial units they will provide, but looking at their graphics it only seems to be a handful, with a lot of space taken by residents parking instead. The site is far too important as a central car park to be turned into a mainly residential area, more so if huge public subsidies (£47m+) are required to make it happen.
The ORLdev is not just a hopeless investment business case. Even if you ignore the capital cost, ORLdev does not justify itself as a pure regeneration as Implementing the development is not a clear benefit to the town.
Firstly the site of the shopping ‘quarter’ is currently one of the town’s large heavily used car parks, so you are already handicapping the development by having to also provide a replacement car park that functions as well as the original.
Considering the redevelopment value of each of the 3 ORLdev parts, shopping ‘quarter’ first. The number of shops in the town was not growing even before Covid, so the only way it will succeed is by pulling businesses from other parts of the town centre, which some will be happy to do, as long as it lowers their rent. From the viewpoint of the town it is a zero sum game, and a poor investment for the developer.
Consider the arts centre. It overlaps with existing provision of a theatre at the Rhodes centre and the cinemas at the Empire. Again Rhodes and Empire were not showing obvious signs of growth, so it is highly likely both would be driven out of business. In Rhodes case it would probably be propped up be council subsidy, when the new arts centre is expected to also require subsidies double what Rhodes has been getting until now. There is an argument that the new arts centre is better located to provide a multiplier effect in combination with the nighttime economy businesses. That is probably true but there are eating and drinking establishments near the Rhodes & Empire already and also the Rhodes has its own car park, where the new arts centre has none near it and is some distance from the nearest disabled parking bays. So the multiplier effect is unlikely to be as big as it could. Another argument is the larger theatre and better backstage will bring bigger shows and more customers, but there has been no evidence provided despite being asked numerous times. Various letter writer in the Indie have convincingly dismissed this argument and do not expect demand to be increased. Again from the towns viewpoint the arts centre is a at best a marginal gain at the cost of diminishing the Empire & Rhodes.
Consider the Northgate End MSCP. It is required to replace the lost parking spaces from the sites of the shopping ‘quarter’ and the arts centre and is the hardest to predict the effect as it could be positive or negative. EHC claims the MSCP adds 197 extra spaces to help ease the lack of parking in the town but that number is misleading as it does not include all the lost spaces if the full ORLdev is done. The real number of extra spaces is under a hundred when you count the loss of the youth centre, old Council Chambers car parks and the lost Waitrose spaces to create the new entrance. It also replaces a busy surface car park with a multi-storey with more awkward vehicular and pedestrian access, situated further from the shops, the wrong side of what will now become a much busier road, which may discourage more people away from shopping in the town rather than trying to park there. The towns parking problems are at their worst in the south around the train station, because of the lack of reasonably priced station parking and it being the only large car park in the area make it particularly difficult. Through the centre of the town there are more car parks but it is only the large Jackson Square car park that have any sort of turnover of cars. To the north of town, since the old Council Chambers car park was opened, the parking is easiest, with spaces reliably available in the Causeway car park, during the week anyway, as it still fills at busy times. Unfortunately the MSCP location is to the north of the town centre where the extra spaces would be least effective.
Note that a much quicker and cheaper option that would benefit the whole of the town centre is to unblock the Cllr Drake parking suggestions which include suggestions from ourselves, EHC parking consultants and the Tory councillors on Cllr Drake’s committee. This would reorganize and effectively create more parking spaces for shoppers possibly as much as the MSCP and save the £19m cost.
Parking problems at the south of the centre and Jackson Square car park gridlocking still remain unaddressed.
In conclusion. The reason for the ORLdev was to build a new shopping area and grow demand to expand into ORL. It is just not going to happen in either the pre or post pandemic retail environment and definitely not in the Covid economy. The only way it could succeed in populating its commercial units is by significantly reducing rents, and drawing many businesses from elsewhere in the town. A vastly cheaper way to reduce rents, without adding lots of empty retail units is to have a local Stortford town centre investment fund/support scheme along the lines of what has been described
It is time to stop throwing good money after bad and use public money more effectively.
We would recommend that you instruct your colleague on East Herts Council to:
Cancel the shopping ‘quarter’ project with Cityheart.
Cancel the Northgate End multi–storey car park. If ever there was a time to invoke the ‘force majeure’ or ‘material change’ clause.
Implement the Cllr Drake parking recommendations.
Cancel or at least put the arts centre on hold until post Covid to see then if there is a need for it. In the meantime restore the Rhodes centre funding to retain a theatre.
Help define and setup a Bishop’s Stortford town centre investment fund/support scheme, for which we offer assistance, and would almost definitely be supportive of in the future.
We look forward to your reply.
We are available to discuss any of the above.
Bishop’s Stortford & Sawbridgeworth Labour party.