Brexit could shatter Glass Works success, councillors warned
Progress on Barnsley's flagship Glass Works regeneration project will come under the town hall magnifying glass when councillors get the chance to raise questions about rising costs, the impact of Brexit on the scheme's future prospects and other issues.
The scheme is focused on the remodelled Metropolitan Centre, which now houses the new market hall and is still under development which will see a '˜market kitchen' food mall created alongside new shops and other outlets.
A second phase will include the construction of a multi-screen cinemaÂ '“ said to be the largest in the north of EnglandÂ '“ along with other developments including the new library building and a public square where the temporary market building currently stands.
They have already been armed with a report on the progress of the scheme which outlines rising costs for the first phase of the scheme, which have risen from less than the Â£53m originally expected to more than Â£60m.
The second phase of the scheme is also over budget and work is going on to assess the 'sensitivity' of void levels if the council does not achieve its expected 95 per cent occupancy rate.
It explains: 'A number of unexpected works have been required on the different elements in phase one.
'These works have included additional asbestos removal, party wall issues, unforeseen foundation/ground work issues and additional fit out costs.
'There have also been unanticipated cost increases, including the higher than expected cost of steel due both to the increase in the size of the scheme and the unforeseen impact that Brexit had on the value of sterling.'
Costs for the second phase are also up, now standing at Â£104m, though that figure has to be confirmed and no original estimate is quoted in the report.
A key factor in the success of the development will be getting in enough income as units are leased out.
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At present, some deals have been struck but they account for less than a quarter of the income needed but that is not regarded as an issue at this stage of the development and there is a target of keeping 95 per cent of units and market stalls occupied when the complex is fully opened.
Councillors on the scrutiny board which will ask questions about the development have been told that while some leases have been finalised, 'others have been rejected because they are either not in line with the estimated rental value included within the Glass Works financial model or they do not fit within the wider schemes aspirations/objectives.
'To date 23 per centÂ of income has been secured on agreed lease deals with further progress being made on a number of other key retailers.
'Nevertheless, the current economic climate of the retail and leisure sector remains challenging and as such leasing remains under constant scrutiny and review.
'To partly counter this, the ongoing occupancy level of the development has been set at 95 per centÂ with a further sensitivity analysis undertaken to ascertain the impact of further void levels.
'That said, progress made to date on lettings remains promising especially as the development is still some 30 months from opening.
'Income is also expected to be generated from the new multi-storey car park, service charges and business rates.Â
'The ongoing uncertainty in relation to the outcome and impact of Brexit, specifically on the UK economic outlook and its consequential impact on the success of the development, will be kept under close scrutiny,' the report states.
In the longer term, the council have to make decisions on whether it wants to keep the centre itselfÂ '“ with the possibility of expanding it furtherÂ '“ or to sell it on, though it is also possible a deal could be worked out with a combination of the two.