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> Has The Snp Saved Glasgow 56m?, Buchanan Galleries Expansion On Hold
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post 29th Apr 2011, 11:29am
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I was in the toon yesterday and was disgusted to witness the state of Argyle Street from Glasgow Cross to Debenhams. A midden indeed!
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GG
post 25th Oct 2011, 07:56am
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This matter has been refered back to the council, which was due earlier this month to vote on whether to give the Buchanan Galleries (a now increased amount of) 80million for the expansion of the shopping centre. However, the executive committee was unable to vote on the issue because they had been given the wrong report! A new report is to be drawn up and presented for the perusal of councillors at the end of the month. SNP councillors have indicated that they may vote against the proposal.

Speaking about the controversial plan, Susan Nicol, general manager of rival St Enoch Centre, said:

QUOTE
"The TIF concept is an innovative method of using public funds to unlock development within particular areas that require regeneration.

But this proposal is deeply flawed and will have a significant negative impact on the future development of Glasgow’s retail sector.

The fact the paper due to be submitted was a significant re-draft of the original business case is a clear indication the proposal is basically unsound.

The business case is based on research compiled before the recession.

It is no longer relevant to the economic challenges the city now faces."

GG.


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post 26th Oct 2011, 07:52pm
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The Evening Times has reported today that the controversial 80m expansion plan for Buchanan Galleries is expected to be rubber-stamped at a re-scheduled committee meeting tomorrow ... assuming, of course, an accurate report is put before councillors this time. smile.gif

SNP and LibDem councillors have voiced concerns about a lack of transparency by council officials; Green Party MSP Patrick Harvie expressed the opinion that the already-vacant shops in the city centre should be filled before new ones are built.

Councillor Gordon Matheson, council leader, said:
QUOTE
"This report will recommend the business case for the Buchanan Quarter TIF to the Scottish Futures Trust and the Scottish Government for approval. The project would bring thousands of jobs to Glasgow."

However, Susan Nicol, general manager of nearby rival St Enoch Centre, accused the council of favouritism and said that time should be given to a more considered analysis of the issues.

Ms Nicol added:
QUOTE
"We’ve identified what appear to be inconsistencies in the report."

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wee davy
post 28th Oct 2011, 10:07am
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Any more news on this one, GG?


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post 28th Oct 2011, 06:09pm
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Wee Davy, nothing in the news, however, here's the relevant extract from the council's executive committee meeting yesterday:

QUOTE
Buchanan Galleries Development (Ward 10) - Tax Increment Finance initiative – Final Business Case approved, after division.

3. With reference to the minutes of 9th December 2010 (Print 6, page 554) approving the submission of a Business Case for the Buchanan Galleries Development (Ward 10) to the Scottish Futures Trust and the Scottish Government, Bailie Cameron [Labour], Executive Member for Development and Regeneration, presented a report regarding the final Business Case for the initiative, advising

(1) that the Tax Increment Finance (TIF) used anticipated future increases in Non-Domestic Rates (NDR) revenues to finance infrastructure improvements, which were expected to bring forward developments that generated increased revenue and as part of the process evidence had been required to be gathered that private funds were insufficient to undertake the necessary infrastructure and that without the TIF the development would not be achieved and the original Business Case had set out the rationale for proceeding with the TIF initiative;

(2) that during dialogue with the Scottish Government, it had became clear that the decision by Buchanan Partnership (a joint venture between Land Securities and Henderson Global Investors) who jointly owned Buchanan Galleries to commence work on the Atlas phase of the development in advance of approval for the TIF scheme weakened the “but-for” case for that part of the development and on this basis it had been agreed to remove the Atlas phase of the development from the TIF business case;

(3) of the key changes to the Business Case;

(4) that the TIF allowed for incremental NDR to be retained by the Council over a 25 year period to fund borrowing costs arising from Council investment and borrowing costs associated with the proposed Council capital expenditure of 80m were around 5.85m per annum, with the annual incremental NDR which could be retained by the Council as a result of the development estimated to be 6.1m and this income would be ring-fenced to service the debt, which would allow repayment of Council borrowing associated with the TIF in advance of completion of the 25 year period; and

(5) the development appraisal had identified a funding gap of 55m for the delivery of public works allied to the development at North Hanover Street and the Buchanan Galleries and 55m of the public works would be undertaken by Buchanan Partnership as part of the main development contract, with the Council paying on a milestone basis and only after the works had been signed off as completed and the remaining 25m of public works would be undertaken by the Council and would include improvements to the Concert Hall, Cathedral Street bridge upgrade, upper Dundas Street upgrade and public realm improvements to Cathedral Street, George Square and the general Buchanan Quarter area.

Councillor Matheson [Labour], seconded by Councillor Graham [Labour], moved that the committee

a. approve the final Business Case;

b. note that if approved, the TIF would lever in 310m of private sector investment, deliver around 1,486 full time equivalent jobs (net) and additional Gross Value Added of 36.2m (net) per annum; and

c. agree to submit the Business Case to the Scottish Futures Trust and the Scottish Government.

Councillor Hendry [SNP], seconded by Councillor McAllister [SNP], moved as an amendment that consideration of the matter be continued to allow a fresh independent demand survey to be carried out in order to ensure adequate mitigation of risk.

On a vote being taken by a show of hands, 5 members voted for the amendment and 12 for the motion, which was accordingly declared to be carried.

My emphasis added ... full details can be found here:
http://www.glasgow.gov.uk/councillorsandco...meetingid=11498

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post 28th Oct 2011, 06:33pm
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According to the Evening Times this week:
QUOTE
... The council, using figures from before the financial crash, insists that retail sales will grow, after inflation, by at least an average of 2.5% every year for 25 years.

Their "best-case" scenario of 5.15% a year sales growth after inflation would mean the city shopping market would more than triple in real terms.

Retail analysts were today stunned by how optimistic city chiefs are about the sector at a time when sales, in real terms, are falling. ...

Professor Leigh Sparks, a leading expert on the retail industry, said:
QUOTE
"I struggle to see how anyone can make a prediction on retail sales for the next 25 years. The usual cycle for investment is a time period of five-to-seven years. I mean, could they predict what Glasgow would be like today back in 1986? I don’t think so. Their forecast is very bold indeed."

Read between them lines!

A council spokesperson said:
QUOTE
"Research in the past 18 months confirms there is unmet retailer demand of 1million sq ft in Glasgow city centre."

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wee davy
post 28th Oct 2011, 07:01pm
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That last one is astonishing!

Unmet 'RETAILER' demand???

Hmmm let me see,... what would come under that banner,...

Russian Mafia???

Columbian/Mexican Drug Cartels???

Somalian Pirates???


Incredible,... absolutely incredible.

Waken Up Glasgow


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post 31st Oct 2011, 07:39pm
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Reaction today: FOR

Stuart Patrick, chief executive of Glasgow Chamber of Commerce:
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"For every completed project that has a TIF, the growth of the rates associated with that project gets recycled back into the local authority's coffers.

These are the kinds of investments that it is increasingly difficult to find public resources to fund, but which are an essential part of the improvements we need for a competitive, modern city centre.

We also like the Government's TIF policy because it reconnects local authorities' financing structures with the needs of business and gives them the incentive to invest behind business growth.

... We acknowledge that there will always be a strenuous debate to go through for investments like these.

My concern at present is that we're at risk of exacerbating the debate by being too cautious in the introduction of TIFs at a time when we have a desperate need to encourage new funding sources."

Reaction today: AGAINST

Susan Nicol, general manager at rival St Enoch Centre:
QUOTE
"We believe that, in its current format, this development would have a massively detrimental effect on the retail sector within the city centre for many years and is based on incorrect assumptions which do not reflect the reality of today’s economic situation.

We are immersed in the retail leasing sector and the suggestion that there is currently a queue of 200 retailers waiting on brand new space being built in Glasgow is, in our opinion, entirely divorced from reality."

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ashfield
post 31st Oct 2011, 08:21pm
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I wonder if Susan Nicol came to that conclusion before, or after, the completion of the 100m extention to her St Enoch's Centre less than two years ago? rolleyes.gif


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post 7th Nov 2011, 12:26am
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A twist in the tale today, as another TIF is added to the Scottish Government's list of approved TIF schemes, prompting speculation that Holyrood may block the Buchanan Galleries project as not providing true "added value".

QUOTE
Controversy mounts as Aberdeen’s 80m garden square is added to approved list of TIF schemes

... Neil denied that the Aberdeen scheme, which is conditional on local public support, probably through a referendum, had been brought forward because of concerns about the Glasgow TIF proposal for the Buchanan Galleries shopping centre. Along with Leith Docks and Ravenscraig, the 80m Glasgow plan was the last of the three original TIF proposals.

While Leith and Ravenscraig have got permission, Glasgow was submitted last month after previous drafts were rejected by either the SFT or the council for containing serious errors. The new business case still assumes that retail in Glasgow will grow at an average of 2% to 5.1% in real terms over the next 25 years – figures that many believe are high given that consumer spending looks likely to be depressed. This has sparked fears that it will not attract new retailers to Glasgow but will draw them from other parts of the city.

Neil acknowledged that the SNP opposition group in Glasgow were against the TIF proposal and said: “There’s no point in us using large amounts of money if all we are doing is displacing jobs. There’s got to be added value.” ...

Full story here:
http://www.heraldscotland.com/business/ana...hemes-1.1133341

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post 10th Nov 2011, 08:49am
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Although it doesn't mention Glasgow specifically, this article in the Financial Times gives an important indicator of just how 'worthless' retail accommodation in struggling urban locations is becoming. This could be temporary measure to see towns and cities through a short-term hard time, but must still be a worrying sign for the sector:

QUOTE
Shops offered 1 rents on hard-up streets

Pound shops, selling cheap household goods and plastic toys, have become a familiar sight on high streets as the downturn has bitten. But the term has taken on another meaning with reports of knock-down rents of just 1-a-year on hard-to-let shops.

With the number of boarded-up shops proliferating on high streets, retail landlords have become desperate to avoid paying business rates on empty units and are happy to sacrifice the rent. ...

Full story here:
http://www.ft.com/cms/s/0/94d0b6a6-06e5-11...html?ftcamp=rss

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post 21st Nov 2011, 09:16am
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Figures released today show that there are 10% fewer shoppers on Scotland's streets than last year. In addition, it was found that, on average, 10% of shops in Scotland lie empty.

Ian Shearer, director of the Scottish Retail Consortium, said:
QUOTE
"The number of people visiting Scotland’s shopping areas has nose-dived since a year ago. This is further evidence of the pressure on consumers.

Scottish consumer confidence is also lower and falling faster than the UK average, and retail sales have performed worse than the rest of the UK for most of this year.

Household budgets are caught between soaring utility and fuel bills and low wage growth, leaving people with less money to spend on other needs and wants.

It’s going to take a major change to tempt shoppers out again.

Retailers are running special events and offering early promotions, helping households with seasonal spending as Christmas gets closer.

Beyond that the Scottish Government has to understand that retailing cannot withstand the 5.6% across-the-board inflation increase in business rates and a proposed new supermarket tax on top of that, both due in April, without knock-on effects."

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tamhickey
post 26th Nov 2011, 07:02am
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This is worrying for all of us

QUOTE
Opponents hit out at Labour “ALEOs shambles” as Glasgow Council faces ‘Financial Meltdown’ By G.A.Ponsonby

Labour’s political opponents have accused the party of financial mismanagement after it emerged Scotland’s biggest local authority faces financial meltdown.

The criticism follows reports that Labour run Glasgow Council is facing the prospect of losses totalling tens of millions of pounds as a result of a planned overhaul of its Arms Length External Organisations (ALEOs).

The concerns centre on a proposal to merge two ALEOs, City Parking and City Property, early next year. However there are fears that any such plan would be seen as a default on banking loans that would result in interest payments increasing. ...

http://newsnetscotland.com/index.php/scott...ancial-meltdown
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post 13th Mar 2012, 08:38pm
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The (now) 80million TIF scheme to use public money to fund the development of the Buchanan Galleries and the surrounding area was re-approved by the council and is now waiting on the Scottish government to give the council the go-ahead. However, Ivanhoe Cambridge, St Enoch Centre owners, believes that part of the project would breach stringent European laws designed to stop the state supporting one private enterprise over another.

Susan Nicol, general manager of the St Enoch Centre, said:
QUOTE
"We have made it clear from the outset to Glasgow City Council and the Scottish Government we are entirely supportive of the use of Tax Increment Finance as a means of funding public infrastructure.

Our concern with this project is that, in addition to providing, as we see it, publicly funded support to a single developer, it also has the potential to blight the remainder of the city centre."

Ivanhoe Cambridge has now indicated that the company intends to take the Scottish government to court if it backs the council plan!

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post 19th Mar 2012, 01:26am
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The Herald reported on the troubled TIFs today:
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... State aid has also been an issue in Glasgow, whose 80m TIF proposal has led some to question the motives behind the city's application. Witchfinder General has been Ivanhoe Cambridge, the Canada-based owner of the nearby St Enoch Centre, which is worried that massively increasing its rival's size will hurt its business not long after its own unaided 150m refurbishment. Smaller competitors are equally dismissive of the claims of the council and Galleries owners Land Securities and Henderson Global Investors, that the extension will attract much more business than it displaces. Retail rents are already said to have fallen in western Sauchiehall Street because of the rumoured departure of Marks & Spencer to the Galleries extension. One retail source says: "We used to talk about the Style Mile as a 'Z' in Glasgow running from Sauchiehall Street to the end of Argyll Street. Now it's in danger of just being Buchanan Street, more like an 'I'."

The application was nevertheless sanctioned by the SFT last month and is now waiting for Government approval. Ivanhoe is threatening to sue if it goes through. Its company's lawyers, DLA Piper, believe there is a decent state aid case because several of the infrastructure works – including a multi-entrance walkway between Queen Street railway station and the Galleries – will enhance the shopping centre. Whether the assets are owned by the council or the company, and the question of whether the company or the public benefits more from them, are both important in determining a breach of state aid. ...

Full story here:
http://www.heraldscotland.com/mobile/busin...n-sand.17034538

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