Sheffield councillors have admitted they are taking a risk by funding a major development in the city centre but say it will be crucial for regeneration.
Urbo Regeneration will deliver the first phase of the West Bar Square development with 200,000 sq ft of Grade A office space, 350 homes, a multi-storey car park and public spaces.
The council will enter into an agreement to take a lease of one of the new office buildings but say they have put measures in place to back out if needed.
Neil Jones, of the city regeneration division at the council, told a Cabinet meeting: “We are trying to create a whole new part of the city centre and to link up with Burngreave.
“We have been working on this for quite a long time and have identified the key regeneration benefits.
“We have an agreement where the public sector takes some of the risk by taking the lease of one property. There is an element of risk by the council taking an office of this scale but we can back out if we are not comfortable.
“This is 18 months to two years away so we have some flexibility. The reason for doing this is to regenerate the area, bring in new jobs and homes and also look at the office space coming through as all the current Grade A offices are fully let.
“We should do this with our eyes open and there is some risk but this is mitigated by the demand and if we don’t get a sufficient level of pre-lets we can back out.”
Cabinet approve the plans. Coun Mazher Iqbal, cabinet member for business and investment, said: “We have had the budget and we clearly understand the pressures that are placed on the council but we have to look at how we can create jobs and opportunities and bring inward investment into the city. I am confident the city is buoyant and on fire and this adds to that strength.”