Plans for a block of high quality offices in Sheffield city centre are set to go ahead after the council signed an ‘innovative’ agreement with the developers.
Council bosses have revealed the authority will buy the building from developers CTP Limited if they want to sell the block.
Sheffield City Region Local Enterprise Partnership described the arrangement as ‘innovative’.
Building work, subject to approval of an European Regional Development Fund grant, is likely to start in the new year and could be completed by 2015.
The Norfolk Street site will cover 78,000 square feet – which the council says will meet a growing demand for office accommodation from blue chip firms in the financial and legal sectors.
The 10-storey office block will include bars, restaurants and car parking – and will complete the Heart of the City project.
Coun Bryan Lodge, cabinet member for finance and resources, said: “In the last five years development of new office development has virtually stopped.
“By enabling this development to proceed now, it will help complete the development of St Paul’s Place at the Heart of the City – one of the key projects in the City Centre Master Plan – and help to support business growth in Sheffield.
“These are challenging economic conditions and the council is taking the initiative to make things happen.”
CTP intend to sell the completed building to a private sector buyer. But the developers admit in the current market securing funding for a speculative development is almost impossible.
The agreement means the council will buy the property, 12 months after it has been built, unless CTP keep it or sell to another party at a higher price.
The price which the council would pay has been negotiated by external surveyors and would just cover the cost of the development, plus a small profit.
But the developers say they are confident they will sell to a private buyer.
Even if the council buys the property, the cost would be covered by increased income from business rates and rent.
The proposed building is in the area covered by the New Development Deal agreed with the Government, which means the council would keep 100 per cent of the increased business rates.
Coun Lodge added: “We firmly believe this new development will assist several existing businesses that want to move into good quality new offices, and could also attract new businesses into the city.
“The building can accommodate over 700 jobs.”
CTP say the building will sit alongside the two successful developments overlooking the Peace Gardens.
Business bosses back proposals for new offices
David Topham, director of CTP, said: “We know there is a great deal of demand from professional businesses wanting prestigious office space in the city centre. “At the present time this demand is simply not being met with the right product – the new offices will provide that.”
Martin McKervey, partner at Nabarro LLP and chair of the Sheffield City Region LEP Property and Construction Sector Group, said: “It’s great to see the council responding in this way. “Without this sort of intervention the scheme would not take place for some time and the city would lose out on companies that want office space quickly.
“This is exactly the sort of innovative, collaborative approach between the public and private sector that the property and construction sector has been calling for to help get the economy moving.”