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Where The Square? – An Update On TIF

Aberdeen City, Articles, Community, Environment, Featured, Information, Opinion No Responses »

Sep 062011

By Mike Shepherd.

Aberdeen Council have recently noted an interest in applying for Tax Incremental Funding (TIF) from Scottish Government funds. The idea is that the Council would underwrite a loan of possibly £80M or more, £70M of which would be used to help pay for the City Square Project. The final application for funding will not be made until December, by which time a business case for TIF will have been completed.

Earlier this year, the then Council leader John Stewart, extended the remit of TIF to include city centre projects other than the city square. These are:

The City Circle Project: A walkway connecting Union Square and the railway station in a circuit from Guild Street, along Market Street through the St Nicholas Centre, down Schoolhill through the City Garden down Bridge Street and rejoining Guild Street to complete the circuit. Basically, it’s a walkway whereby shoppers in Union Square will be heavily prompted to visit the rest of the city by signs and possibly colour coding.

St Nicholas House Redevelopment: A recent council document stated this:

“In the current property market, however, the Council is concerned that developers will be unwilling to take the risk of demolishing redundant parts of the site, delaying any sale and redevelopment and resulting in a vacant city centre eyesore for a number of years. The council therefore wishes to pre-clear the site, to prepare it for sale, and bring forward development.

“The aspiration is that the tower, if not demolished, would be stripped back to its’ skeleton ready for redevelopment, and recladding and put to new uses either as a hotel, apartments or offices, and a new public square would be created to improve the setting of Marischal College and establish a focal point for a new ‘civic quarter’.”

Of interest in this statement is that the possibility of building a public square next to St. Nicholas House has been resurrected. This otherwise hasn’t been mentioned recently in council papers.

The document mentioned is the Aberdeen City Centre Redevelopment Economic Impact Assessment Information, August 2011. This provides information for a questionnaire to be answered by some 500 organisations and individuals which would provide feedback to assess the economic impact of TIF.

Denburn Valley Health Centre Development: From the same document:

“The health centre on the roof is reaching the end of its design life and NHS Grampian is looking to vacate the building. Planning guidance issued by Aberdeen City Council has called for “imaginative” development of the site using the “highest standard of design and materials to complement the surrounding urban form, listed buildings and conservation area”. Redevelopment must continue to provide for substantial public car parking on the site and is expected to comprise largely commercial space for small and medium businesses and some residential development.”

Aberdeen Art Gallery:

“Infrastructure and development required to link the Art Gallery and Cultural Quarter to the City Gardens including partial redevelopment of the gallery and creation of additional gallery space.”

The Scottish Futures Trust (SFT) are seeking six ‘pathfinder’ projects to help establish the feasibility of TIF in Scotland. Three projects have been approved (Edinburgh Waterfront Development, Ravenscraig, and the Buchanan Quarter in Glasgow) and three more are being sought.

There is strong interest as Barry White, Chief Executive of the SFT told me in an email last week:

“I can confirm that we have received a submission from Aberdeen City Council and will be considering it along with the submissions received from many other local authorities over the coming days.”

The Case for TIF in Aberdeen.

Tax Incremental Funding is well established in the United States and has recently been introduced to the UK. The idea is that a local authority borrows a sum of money for a development project from Government funds and that the extra business rates generated by the development is captured to pay off the loan over 25 years for instance.
It works best where a brownfield site is used to develop a large scale business operation, the revenue from which is to some extent predictable. In this instance, the risk on a council borrowing a large sum of money is mitigated by a sound business model.

The Aberdeen TIF case is largely predicated on the City Square rejuvenating business in the city centre. There would only be a small amount of revenue generated on site and this would be insufficient in itself to provide business rates to pay back a large loan. Instead, it would be hoped to capture business rates from the surrounding city centre both from rates generated by extra business and new developments.

Trying to predict how much extra business will result from a new city square will be to a major extent speculative with a large uncertainty involved. In other words, if Aberdeen Council borrowed £80M through TIF this would be based on hope rather than certainty that the money could be paid back.

Aberdeen Council is £562M in debt according to an Evening Express report earlier this year. The interest on the debt is paid from the revenue budget and soaks up cash that could otherwise be used for service and amenities. The Council cannot afford to take a risk on being left with more debt to service, the budget is under severe strain as it is. On the other hand, I have been told that the city is so short of capital for spending that it is unlikely that there would be any investment in the city centre without TIF.

The £70M loan for a city square would be a loan too far; particularly given how unpopular the project is in the city. There is tacit recognition in the questionnaire document that the City Square Project may never happen.

“This option considers the outcome where the City Garden Project is not realisable, but the other projects are. In this scenario, economic benefit and new business rates would be generated primarily by the North Denburn Valley and St Nicholas House developments. Although likely to be less than would be the case if the City Gardens were to be realised, these two projects would nevertheless likely provide the basis for a smaller TIF.”

In this instance, Aberdeen would get a public square at St Nicholas, which is where most people wanted it in the first place.

UTG Is Not To Blame

Aberdeen City, Articles, Community, Environment, Featured, Information, Opinion No Responses »

Sep 012011

A year and a half ago, Steve Bothwell wrote to express some, shall we say, ‘reservations’ about ACSEF’s master plan and where Aberdeen is heading. It looks as if he had a point or two.

February 25, 2010 – ACSEF’s plan belies anything that can be comprehended as ‘essential to the future of Aberdeen and the North East of Scotland’. As Jonathon Meades put it, ‘Aberdeen is good at being bad’ – Polite prose indeed.

The former glory of George St, with high quality retail and high quality architecture/replaced with the now John Lewis building (formerly the Co-Op) – St Nicholas Centre and The Bon Accord Centre, whilst severing the bloodline to the rest of George St, which resembles a down market version of the down-trodden Argyle St in Glasgow.

The old Co-op Building in Loch St/Gallowgate, which with little imagination could have been a gem of high quality boutique-scale retail, instead of Architecturally impotent office/residential blocks. St Nicholas house dwarfs Provost Skene’s house, one of the oldest and most architecturally significant buildings in the area.

Union Terrace Gardens is not to blame

The Trinity Centre/Trinity Hall, which subsequently moved to an equally, but on a smaller scale, architectural abortion.

The Old Market building (Market Street and the Green) replaced with the New Market building, sporadically raising pointing questions from the public (locals and visitors alike). Amadeus nightclub on the beach front which offers nothing but bemused and disturbed confusion.

And last but not least, Union Square, which is a glorified retail park with parking. This Architectural abomination will need replaced sooner than we think.

Union Street comes up in conversation with great frequency. For the past 30 years planning and control has become so lax that we are adorned with gratingly luminous patchwork of irregular symmetry. Absentee landlords are never held to task, nor are the lease holders.

Union Terrace Gardens is not to blame.

Most City Councils have made errors, and some cities have corrected them.

Aberdeen City Council still strive forth to allow the most banal picture painting of a living hell, by destroying everything in its path.
Either they are missing the clues which sit firmly on their own created door step or are suffering a serious bout of doldrumitis. The Civic Square planning and design details do not excite but only represent the pointlessness of it.

The City Council, along with ACSEF and Central Government wholeheartedly supported the Peacock scheme, providing local planning guidance was adhered to. This was to make it blend into the historic park. Peacock’s did that.

We now have a scheme, which in its vagueness, is impossible to get to grips with. From that I mean, it is quite obvious that this charade is nothing to do with enhancing our city for future energy companies to get comfy with, because as we know, energy companies care about nothing but energy riches and not about Urban realm Strategies, and especially about retail connectivity.

ACSEF’s approach to retail connectivity is fed through a brainwashing exercise in which the retail ‘Pillars’ unease at motions of failure result in the bandwagon bursting at the seams with the ‘I’m on board brigade’ ensuring their retail offerings, bland as they be, will not suffer the ever-changing movement or trends of public spending.

Union Terrace Gardens is not to blame.

It is poignant that public money has been frittered away on asking Joe Blogs about ‘an idea’, an idea which still reveals no real detail of the final outcome, whereas Peacocks had it sorted and without the need for car parking. Their enhancing project upset no one, and has not created the furore that the Civic square has.

Union Terrace Gardens are not frequented often. Perhaps the reason for that is, the general public are more interested in other things. Society has gone through radical changes and people have become armchair deficits. They rage vengeance on slopes and stairs, grass and beauty, nature and health.

Union Terrace Gardens is not to blame.

However, Courtesy of Grampian Police, the facts are this: – There is negligible crime in Union Terrace Gardens. The Freedom of Information Act has provided much-needed defence, where Union Terrace Gardens is the safest area in the City Centre.

It’s plain to see that ACSEF have not used Europe as an example of quality city centres but used America and Australia as examples. America and Australia are fairly recent countries but wholeheartedly celebrate their Green Spaces.

Aberdeen City Council’s budget is tight and perhaps tight-lipped. And the Scottish Government should be representing Scotland and its history, which it’s not.

Union Terrace Gardens is not to blame.

What’s Happening With The City Square Project?

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May 262011

What’s happening with the City Square Project? Mike Shepherd continues to keep Aberdeen Voice readers up to date.

TIMING: The design competition for the City Square was launched on the 19th April. Companies are being asked to express an interest by the 13th of June. A shortlist of 5 to 7 companies will be identified and these companies will be asked to tender designs for the city square by the 16th September. Once these come back, the plans will go on public display. The winning design will then be picked by the city square board with the advice of a jury.

The winning team will be announced in mid December following approval of the design by the Council at their meeting on the 6th December. Planning permission will be sought in 2012. There is also a possibility it could be passed to the Scottish Government for approval.

Meanwhile the Aberdeen Local Plan has been handed over by the Council to independent reporters for review. Union Terrace Gardens is an unresolved issue in the plan and it is possible that the reporters could call for a hearing or more likely work with the written submissions to resolve this. They will have their work cut out as there were over 370 submissions against the inclusion of the Gardens as an opportunity site (and only two in support). The plan will probably not be finalised until early next year.

WHO IS DOING WHAT: This is complicated and rather murky.

The Council set up a project management board to look after the City Square Project. The board in turn have assigned some of their responsibilities to an independent trust (limited company) formed by local businessmen in January this year. The Aberdeen City Gardens Trust has been funded both by Sir Ian Wood and the Scottish Government (Scottish Enterprise). The Council have been asked to nominate a council representative for the trust.

The trust then formed a subsidiary called ACGT Enterprises.

I understand that the trust is seeking charitable status and would not be able to charge, or reclaim VAT as a result.

ACGT Enterprises Ltd has been set up to be the commercial arm of the project, which would be responsible for taking rent, and providing services for the proposed development, but will be non-profit and would pass all the monies back to the charitable trust.

ACGT Enterprises have subcontracted to a company called Malcolm Reading Associates to manage the design competition.

Although councillors John Stewart and Kevin Stewart are on the Project Management Board, the council largely seem to have lost control of the project. The original intent was to have a council controlled trust (Special Purposes Vehicle) to manage the city square, but this doesn’t look as if it is going to happen, even though it was what the councillors voted for.

THE DESIGN BRIEF: The five to seven companies that are selected to come up with designs for the city square will need to be given a design brief.

This will have to be reasonably detailed as to what is required for the city square. For instance, if a new bus station is to be built under the square, there will have to be some means of getting the buses in and out. The design brief will have to be submitted to the full council for approval and it will most likely come up at the meeting on the 29th June.

I’m getting the distinct impression that the design brief is one major headache for the project management board. The problem isn’t so much the square but what goes underneath it. The accommodation space under the city square is about 5/6ths the size of Union Square according to the technical feasibility study. How do you fill such an enormous space? We are told it is not going to be a shopping centre or the site of a big multi-storey car park. Various suggestions to date have included an arts centre, a heritage museum, a transport hub, a cafe quarter, a conference centre and even an alternative energy research centre.

LAND OWNERSHIP: The question of who owns Union Terrace Gardens has arisen.

The Council have farmed out the question of land ownership to the solicitors Brodies who are currently investigating the issue. However, I’ve been told by the Council that the park is thought to lie entirely on Common Good land. As a result, it is likely that a court order would be required for any change in status for the property.

I’m told by the council that they are considering retaining the ownership of the land but with the intent of providing a long-term lease.

If the city square project goes ahead, the civic square and the large building underneath it will belong to the private company / trust that has leased out the underlying land.

There had been a plan to get the council to approve leasing out the land this April, but it looks as if the council had second thoughts on that one.

FUNDING: The funding is the major problem with the city square and the one most likely to scupper it.

The oft quoted costing for the city square is £140M although in reality an accurate estimate will not be available until the designs have been scoped out. One architect told me that £140M is an unrealistic figure. Union Square cost £250M to build and was located on a flat, reasonably accessible site. If you consider the city square as an upside down Union Square on a difficult site with limited access, then you are perhaps on the way to a more realistic idea of the cost.

So far, only £55M of private money is on the table including the £50M allocated from Sir Ian Wood. The plan is for the council to borrow an additional £70M through Tax Incremental Financing (TIF). John Stewart complicated the issue by adding three extra projects (St Nicholas House demolition, the art gallery extension and signposted walkways in the city centre). As a result, the feasibility of TIF funding is not likely to be decided until the end of the year.

The TIF funding mechanism for the city square is somewhat risky as it depends on the idea that the city square will cause a rise in business rates in the wider city centre to pay off the loan. If this doesn’t happen the council will be left with large unpaid borrowings.

The Scottish Government may not have available funds to provide money to the Council for the city square. Just after the Scottish parliamentary election Alex Salmond was quoted in the Evening Express as wanting to show his gratitude to NE voters for their support. He would do this by supporting funding of the bypass and upgrading the Tipperty to Ellon road. The city square was not mentioned.

WHAT IS LIKELY TO HAPPEN: I often hear comments that the city square will never happen, lack of funding being the main reason for this.

I’m not so sure. The project has developed a momentum and has the support of the majority of councillors, business interests and is getting favourable press by Aberdeen Journals.

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Funding is of course an issue. However, in spite of statements to the contrary, I don’t detect universal enthusiasm for the city square amongst the councillors who support the scheme.

They are well aware of the strength of public opinion against the city square.

One factor is the recent resurgence of the SNP, gaining all 7 NE constituency seats in the Scottish parliamentary elections.

The SNP have become the dominant party in the Aberdeen Council with Callum McCaig likely to become council leader before long. Although the council administration is a coalition between the Lib Dems and the SNP, it will be Callum that will be the public face of the council. Will he want to have the smoking gun of leading an administration that voted for the city square when the council elections are due next May?

Perhaps even worse for the SNP is that the city square could be in the construction phase, come the next Scottish parliamentary elections. By then, the trees will have come down. The SNP would have to defend their three city seats in the face of a very angry public.

As reported two weeks ago, Alex Salmond has suggested a referendum for the city square with keeping the existing park as a voting option. This may be the way forward to defuse the controversy and perhaps even restore public faith in local democracy.

Join the Friends of Union terrace Gardens who are campaigning to keep and improve the city centre park. www.friendsofutg.org

The Election – The UTG Effect

Aberdeen City, Articles, Community, Featured, Information, Opinion No Responses »

May 122011

By Dave Watt.

Having looked at the election results from all over Scotland, May the 5th was an SNP landslide only moderated by list system which prevented them from getting even more seats.
New Labour were beaten out of sight, the treacherous Nick Clegg’s Lib-Dems were flung into a deserved oblivion and their Tory bedmates got their usual seeing to from the Scottish electorate and only the list system got them into double figures.

Huge constituency swings ranging from a national average of 12.5 % to peaks of around 20% paved the way for a long awaited referendum on Scottish independence and brought a ubiquitous bright new glow to the Scottish political scene.

Well, almost everywhere. In one particular constituency the swing was much, much smaller. Which constituency? Why, Aberdeen Central.

Aberdeen Central was a key marginal in the election – particularly as the constituency borders had been changed leaving Lewis McDonald (Labour) with a notional 300 or so majority over the SNP’s Kevin Stewart – his main challenger in the constituency. The final vote was pretty close with Kevin Stewart running out the winner with 10,058 votes to Lewis MacDonald’s 9441. This majority of 617 represented a miniscule swing of 0.5% from Labour to the SNP. Easily the smallest SNP constituency swing of the night over the whole of Scotland and one in which the Labour vote actually went UP by 8.6% which didn’t happen in many constituencies.

So why did Aberdeen Central buck such a huge national trend?

The short answer to this is the ongoing UTG controversy and Kevin Stewart’s role in the controversy which is seen by many people as little more than a cheerleader for Sir Ian Wood’s vanity project.

Last week I spoke to several people I knew who were undergoing a crisis of conscience whereby they although were very much in favour of an independent Scotland but were struggling to bring themselves to vote for what one of them obligingly referred to as ‘Woody’s f**king sock puppet’.

Obviously, bearing in mind the result, some of them did vote for the ‘f**king sock puppet’ whereas others didn’t vote or voted for Lewis MacDonald. Either way, the vote for Aberdeen Central was extremely close and, if it had been repeated nationally I think the SNP would have definitely struggled for an outright majority in the Parliament. Realistically, it was only the huge SNP national vote which got the rather unpopular* Mr Stewart down to Edinburgh.

So what does this say about the UTG controversy?

Basically, any councillor still hawking the Garden Square Project round Aberdeen over the next twelve months can expect to get his/her well-worn backside seriously kicked when the Council Elections roll round next May when the national question won’t come into play and it will all just be down to local politics.

* Mr Stewart showed his strange notion of winning hearts and minds a couple of Saturdays before the election when he was outside Marks and Spencer jabbing his finger forcefully and snarling into the face of an elderly lady who had declared her support for UTG. A long term friend of mine (of Italian origin) who intimated, on seeing this, that he had rather more than half a mind to ‘deck the b*stard’ was fortunately persuaded to desist.

Where The Various Parties Stand On UTG

Aberdeen City, Articles, Community, Featured, Information, Opinion No Responses »

Apr 292011

7 months on from gathering comments from the Scottish Party Leaders on the development of Union Terrace Gardens, Mike Shepherd enlightens readers as regards where the parties stand 7 days ahead of the Scottish Election.

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CONSERVATIVES: Mixed views. The Conservatives in the council split last year, and the city centre park was one of the contentious issues leading to the split.

One of the splinter groups supported the development; the other has major concerns about the financial exposure to the Council of borrowing money to build the city square.

The Conservative candidate in Central Aberdeen, Sandy Wallace, supports the development of the park:

“21st century public space over 19st century public space is a no brainer. The question is can we afford it? We should make sure we can afford it. Building for our grandchildren’s future takes preference over employing yet more council officials.”

GREEN PARTY: Against the development of Union Terrace Gardens. In an Aberdeen Voice article, leader of the Scottish Greens, Patrick Harvie said:

“The Greens both locally and nationally fully support the campaign to retain the historic Union Terrace Gardens in their current form. The people of Aberdeen were consulted and rejected the proposal: it is shameful for the City Council and business to try to overturn that outcome.”

See: https://aberdeenvoice.com/2010/09/scottish-party-leaders-comment-on-utg/

LABOUR: Against the development of the city centre park. Lewis Macdonald, the sitting MSP in the marginal Aberdeen Central constituency, has highlighted the issue in one of his election leaflets. In this, he pledges to oppose plans to fill in the Gardens:

“The people of Aberdeen should have the final say in what is done with Union Terrace Gardens.”

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LIBERAL-DEMOCRATS: Mixed views. In the Council group, Council leader John Stewart is the prime mover for the City Garden project when votes come up. He is also on the board for the City Garden project and is helping to progress the plans. On the other hand, Councillor Martin Greig and several Lib-Dem colleagues are consistent opponents of the scheme in council debates.

SCOTTISH NATIONAL PARTY: The main supporters of the City Garden Project, although largely silent on the issue in their current campaign. Kevin Stewart, a strong contender for the marginal Aberdeen Central seat, is also on the board for the City Garden Project. He has led most of his Councillors in support for the city square in council voting and this is one of the main reasons why it has progressed through the Council to date.

Alex Salmond was quoted in Aberdeen Voice last year:

“Aberdeen City councillors voted in favour of the proposals to build a new City Square and I understand a design competition is underway, which will seek the views of local citizens, as to what the development will look like.

It strikes me that in these tough economic times there is all the more reason to think big for the future of the North-East of Scotland. We should be excited by the scale of this vision and the commitment to ensure great things can be made to happen.”

See: https://aberdeenvoice.com/2010/09/scottish-party-leaders-comment-on-utg/