City centre's latest major development as Sheffield gets back on its feet after lockdown

Unsurprisingly, the Office for National Statistics says the closure of all those shops, offices, cinemas, theatres, bars and restaurants had a catastrophic effect.

“The economy has experienced a significant shock since the start of coronavirus,” it says.

“GDP has fallen dramatically with record falls in output for production, services and construction. Covid-19 had a significant and wide-ranging negative impact on output during April.

“April experienced sharper falls than March as the negative impacts of social distancing and lockdown led to a significant fall in consumer demand and business and factory closures, as well as supply chain disruptions.”

Now quaratine is easing, how does the city centre begin to recover?

During lockdown, Coun Julie Dore, council leader, signed off the latest Heart of the City II scheme, Block A which includes Pinstone Street, Palatine Chambers and the old Gaumont building and former nightclub.

Liberal Democrat councillors called for the phase to be paused, conscious that £43 million was being spent during a time of huge economic uncertainty.

Coun Martin Smith, shadow cabinet member for business, said: “It warrants further scrutiny against the economic background that we face, particularly about the potential impact on retail, leisure and hospitality which forms the core of the whole project but especially Block A.

“I was surprised the decision was taken at the peak of the virus. We have paused other aspects of Heart of the City II so it's not unreasonable to do the same with this.”

His colleague Coun Steve Ayris said: “Is this the right time because we don't know if there will be another Covid-19 peak or another lockdown.

“We can't see much beyond next week nevermind the next 10 to 20 years time so we need a careful evaluation and the economic impact of Covid-19 before committing funds.”

But council chiefs say they manage risk every step of the way and investing in the city centre will secure its future.

Coun Mazher Iqbal, cabinet member for business, said the council worked with development partners Queensbury, retail agents in Leeds and Manchester, a company looking at niche and emerging markets and one of the world's largest real estate advisors.

He said: “Before Covid-19 the landscape for retail had completely changed. We have seen major brands disappear and others have been quite resilient and have stayed.

“We are not party to negotiations between landlords and individual businesses but have set up a business recovery group and we are always watching what is happening around us. That information feeds in on a monthly basis to review.

“The group wrote to all the businesses in Sheffield asking about their plans for reopening. The radar is on and we are trying to capture whatever comes across us.

“We didn't have a crystal ball to see Debenhams cafe go under but we have HSBC which is a viable, sustainable business with potentially 3,000 employees.

“That scrutiny of the specialist expertise we bring in is there to ensure schemes are viable, deliverable and sustainable.”

New hotel on the horizon

The 150-room Radisson Blu hotel is due to be built within Block A and Coun Iqbal says if Heart of the City II was paused now, it would send out the wrong message.

“Sheffielders have been demanding a vibrant city centre and we want tourists and have been looking at how Sheffield can become a weekend break destination.

“We have done considerable work on this and our hoteliers have been doing really well.

“There's a huge risk if we don't do this. We have an operator, we are not building this hotel on spec, we have a global name saying it wants to build here. Radisson Blu is the second largest hotelier globally so this is a viable and sustainable business.

“If we paused this, it sends a negative message out there that Sheffield is shut for business and would be a huge reputational disaster for the city.

“Here we are creating opportunities with construction and those jobs that are created within that hotel will give confidence to other investors, not just in the region but globally, and they will hopefully say Sheffield is a place to do business.

“The risks are being managed, we are being prudent but key for me is to create those opportunities.”

Breathing life back into the city centre

Nalin Seneviratne, director of city centre development, says retailers are still interested in coming to Sheffield.

“Block A is a gateway site from Fargate and is an important part of the development. The site has been relatively unoccupied and had temporary lets with short-term leases.

“We recently did a complete review of all the rental values, market yields, and do this on a regular basis. We have a much smaller retail content than previous schemes but Sheffield is a major UK city and retailers are still interested.

“While we have been in this pandemic we have signed up a leisure unit on Charter Square and a new cafe restaurant in front of the NCP car park. There's still interest in the city and confidence from the markets despite the disruption, we will have operators keen to bid.

“People look at moving into a new house on the basis the rest of the estate will be built and it's the same here.

“We have tenants which have taken that risk with HSBC and the law firm CMS but when you talk about retail and food and beverage they want to see life.

“John Lewis has complained about the overall progress and the fact the city has dragged and dragged. A lot of occupiers want to see us complete and get on with this because it brings jobs and footfall.

“We can slow things down, and that was part of doing this on a phased basis to do this in a controlled way, but there is confidence in Sheffield.

“I get calls from London, Coventry and Nottingham because people are looking at what we are doing. This is a scheme managing a lot of risk but that's why we take every decision very carefully before we commit to anything. We review the position before any contracts are signed.”

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