£10m pot could be kick-start for city

By kgreen

A £10M fund could be set up by Derby City Council to get regeneration projects off the ground in the tough economic climate.

The authority would set up the fund by committing £600,000 a year. That kind of investment means the value of the fund would be £10m because borrowing enough money to buy a £10m piece of land would cost the council about £600,000 a year in repayments for around 50 years.

However, the council could use part of the £600,000 annual budget to purchase land and the remainder for related services, such as employing people to manage a certain project.

The investment pot would be kick-started by taking £1.5m from reserves.

Officials said they are still working out details of the scheme, but its aim would be to attract investment in the city.

John Cadwallader, chief executive of urban regeneration company, Derby Cityscape, which is spearheading the revitalisation of the city, said: "At a time when other sources of funding are getting much tighter, setting up a regeneration fund would be an excellent move and give the city more control and a better chance of continuing the regeneration programme through the times when private-sector funding is difficult to acquire."

He said one scheme which could be helped through the fund is the £16m office and retail development in Bold Lane, dubbed Sadler Square. Its developer, Blueprint, has stalled due to a shortage in funding.

Mr Cadwallader said: "We should look at schemes that can be brought on at an early stage. Particular priority should be given to Sadler Square to bring a new lease of life to the Cathedral Quarter and where there is an identified funding gap."

A report states the fund would help maintain the momentum of regeneration, created through the development of Westfield and other projects.

Council leader Hilary Jones said the money could help to attract or even bring in more cash to the city and the council. "It could be used for a variety of reasons, it is very flexible.

"For example you could get developers interested in buying up land but they may be put off if it is contaminated and we could use this to clean up the land and then sell it on.

"That is just one example but it could be used for all sorts."

The report outlines that the fund is aimed to help the city through the recession.

It states: "Since the onset of the worst recession in a generation over the past 18 months, it is considered to be of the utmost importance that momentum is not lost.

"There are many worthy regeneration projects that have stalled in the last few years due to the unavailability of finance, a more risk-averse climate and uncertain market demand.

"The aspiration is to create a successful European city that is an economic powerhouse providing prosperity for its citizens and warm, welcome to businesses and visitors.

"Through its own corporate capital programme, the council could take the lead in demonstrating the ambition of the city and creating a real step change in the pace and performance of regeneration projects.

"Establishing a regeneration fund will support the city through the recession and towards this aspirational future."

If the council's cabinet agrees to set up the fund when it meets on Tuesday, the council would be asked to use £1m of reserves as a one-off input into the fund in 2010-1 and a further £500,000 in 2011-2.

On top of that, it would add £600,000 into the council's budget each year towards the fund. A decision on that investment would be made by the full council on March 1.