To seek Cabinet approval to vary the terms of the retail quarter development agreement.

The Leader of the Council presented the report to Cabinet and was asked by the Independent Group Leader as to the legality of the meeting as the Chief Officer Finance and Commercial, who is the Section 151 officer, was not present.  Cabinet was informed that there was no requirement in law for the Section 151 Officer to be present.

In the open session of the debate the following points were made by Cabinet:

·         It was emphasised that what was before Cabinet was a variation to the original contract and that approval of the original scheme had been agreed by Cabinet in June 2009 and Council in July 2009.  The first variation had been agreed in March 2011.  There were only six variations proposed to the contract and the impact financially was minor.

·         Cabinet was referred to the Montague Evans papers contained in the agenda.  It was stated that the advantage of the old livestock market site was that it was next to the city centre and not out of town. 

·         It was important to note that local companies would be able to tender for contracts providing jobs in the construction phase.  In addition there would be a skills academy offering apprenticeships to young people.

·         Cabinet was reminded that it would affect everyone if Hereford was unable to attract young people in the 20 – 45 age group to live in Hereford.  It was felt that this development would attract young people back into Hereford.

·         It was noted that retailers had wished to move to Hereford for some years but had failed to find large enough premises for their requirements.  Consequently retail spend for Hereford had declined as shoppers went out of county for their shopping.

·         It was stated there would be an impact on the Enterprise Zone when companies were considering relocating to the county, which would add to the economic recovery of the county.

·         Cabinet was reminded that the Next store proposal to expand and move to the Holmer site had been refused by the Inspector at a Public Inquiry due to the proposals relating to he old livestock market site.

·         It was believed that not only residents would return to shopping in the county but Hereford would also win back the shoppers from mid Wales.  Failure to develop the site would course further decline.

·         Hereford residents have indicated they would welcome a department store, multiplex cinema and a food hall.  Proposed facilities would aid in keeping young people in the county.

·         Cabinet was referred to the conclusions on page 29 of the report and in particular paragraph 19 which stated that the proposed transaction was the best obtainable outcome for the public interest.

·         Cabinet was reminded of the Hereford Futures sustainable policy which Stanhope and Sir Robert McAlpine had signed up to under the joint venture.

·         Cabinet was advised that it was quite normal to have variations to a contract such as this one, however, it was unusual to have only six variations which were of a minor level. 

The following points were made by Members in opposition.

·         The viability of the project needs to be assessed as to whether it is good value for money for Hereford.

·          It was asked whether retailers had signed up to the Heads of Terms agreement.  It was believed that retailers had not signed up at the present time.

·         It was stated that the Council had been quoted as stating that there would be an extra £8.5m spend per annum.  It was believed that there was no evidence to support the statement.

·         It was stated that no risk assessment had been seen by Members.  In referring to the British Consortium website it was stated that foot fall for retail shopping had declined by 4.8%.

·         In response to the points made it was stated there would only be conditional agreements at this stage.  It was not unusual for a retailer not to sign an absolute agreement at this stage.  It was added that pre-lets attracted new tenants and retailers such as Debenhams had already committed to Hereford along with other retailers.

·         It was asked if a major chain store would be closing in high town and reopening on the retail quarter as it was believed that one high town store had not been contested.

·         In response it was stated that it was unprecedented for a Council to have so much control and that Stanhope would need to be transparent in order to attract retailers to Hereford.  It was stated that Burtons store had left Hereford at the end of its lease because there were no large premises available.

·         Retail stores in Hereford were struggling and providing alternative premises at a cheaper rent was not helpful.  Cabinet was referred to the Deloitte report on stores of the future which stated that most high streets were 30-40% over supplied with shops.  It was felt that the proposal was a long term development at the wrong time for Hereford.  It was believed that retailers in high town did not support the scheme.

·         It was thought there was no evidence to support the idea that people from Hereford shopped out of county.  It was proposed that the scheme should be abandoned and that a new scheme put together by a cross party of Members.

·         Cabinet was reminded that the economic situation was considerably different now to when the scheme was first proposed and that a number of cities had pulled out of proposed shopping developments.  This development would be one of the most expensive in the country when looked at in conjunction with the link road and the compulsory purchases.  There was concern over the public money being spent and no prospect of a return. 

·         Can Cabinet assure young generation that this proposal is the best decision for Herefordshire.

Cabinet unanimously agreed the recommendations.

RESOLVED

                 THAT:

a)    regard be had to the matters contained in the separate exempt report;

b)    the terms of the Deed of Variation, Deed of Novation and Option Agreement with Stanhope Plc and British Land Plc described in the report be approved; and

c)    authority be delegated to the Director for Places and Communities to finalise the necessary documentation.

At the close of the debate on the Supplementary Agreement and Deed of Variation to the Retail Quarter the Chairman adjourned the Cabinet meeting for a short 10 minute break.

Following the adjournment of the Cabinet meeting, the Leader of the Council handed the chairmanship of the remainder of the meeting to the Deputy Leader, Councillor Price.