As Liverpool prepares to host the Eurovision Song Contest in May, the real estate industry will be hoping the city’s council will score much more than nul points as it strives to embark on a new era.
There are no guarantees. A letter sent by government last week to the team of commissioners installed at the council was a timely reminder that the “continued strengthening of Liverpool is not yet a given”.
The 8 March letter from Lee Rowley, under-secretary of state for local government and building safety, stressed the role of the five commissioners will be vital over the coming months as the council faces significant change: the appointment of a permanent chief executive and implementation of a senior officer structure; change in governance model; all-out elections on 4 May; and the implementation of a transformation programme.
“I share your view that the current leadership must maintain this pace, and that incoming leadership, at political and officer level, must seize the opportunity to build on the progress made to date,” Rowley told the commissioners.
Speak to those on the ground in Liverpool’s real estate sector and there is often a deep concern that the city has been losing ground. “That’s the shame of it,” says one experienced player in the Liverpool property market. “There is still development going on. Liverpool is still a great city but instability at the council has put some institutional investors off.”
Another adds: “The real issue is the city’s dependence on tourism and leisure and its weakness on commercial occupiers. We need the council to refocus on the central business district, to help attract occupiers from the tech sector and professional services. Potential investors do consider the stability of political leadership and if they are creating jobs in Liverpool the public sector should help them.”
New hires
Against this backdrop, there was a cautious welcome from the industry to a string of permanent appointments as part of a reorganisation of the council’s senior team.
In quick succession, Liverpool announced the appointment of Nuala Gallagher as director for city development, Sophie Bevan as director of development and major projects and Andrew Lewis as chief executive.
The new hires begin to address weaknesses exposed over the course of a challenging four-year period and patched over with temporary appointments. It began with the 2019 launch of an ongoing police investigation into building and development contracts in the city, which was quickly followed by a damning government-commissioned review into council management.
So damning, in fact, that in June 2021, Westminster sent in a team of four commissioners to make sure vital improvements were made in the running of the council over the next three years. In another twist last summer, council chief executive Tony Reeves resigned shortly after it became public that costly mistakes at the council had led to it failing to renew its energy contract on time. In November, central government added a finance commissioner to its intervention team.
Andy Delaney, a director at regeneration consultancy Aspinall Verdi, who has worked in the sector for more than 20 years, hopes the new appointments – who bring extensive local and regional authority experience – will mark a turning point for the council and bring much-needed clarity of leadership.
“There are so many projects which have stalled because no one has been in charge or there have been interims in place,” he says. “It’s good to see permanent people being appointed to make decisions.”
Among those stalled schemes is the long-awaited 400,000 sq ft Pall Mall office, which would go a long way to addressing the dearth of grade-A office supply in the city centre. The council appointed Kier and CTP as development partners in 2018 and approved plans for three office buildings and a hotel the following year. Remediation has been carried out, but nothing more and in 2020 a 100,000 sq ft prelet to BT fell through amid the pandemic uncertainty.
Delaney, who is not involved in the scheme, believes the council needs to do more to help attract inward investment to opportunities like this – perhaps through something akin to MIDAS, the inward investment agency which promotes Greater Manchester as a business location. Successes at Liverpool’s Knowledge Quarter – the product of a public-private joint venture – give an indication of what can be achieved, he says.
“The council should not be the developer, but it should provide a figurehead to encourage inward investment and promote the city as open for business,” Delaney says.
Another stalled scheme is the 22-acre Festival Gardens site in the south of the city. Liverpool-based Ion Developments was appointed development partner on this waterfront regeneration in 2019 and worked with the council on the remediation strategy and masterplan for the 1,500-home scheme. But last summer the council announced its agreement with Ion had expired and it would launch a competitive tender for a developer early this year.
Sarah Doyle, Liverpool City Council’s cabinet member for development and economy, said the move was “only right and proper” to ensure the project “aligns with all the new policies we have adopted since our new mayor was elected” in May 2021.
The decision remains a contentious one for Ion, which hopes to recover its costs, but managing director Steve Parry is nevertheless open-minded about the bigger picture at the council now that fresh expertise is being brought in.
“The appointment of permanent people with experience is very welcome news from our point of view,” he says. “I hope the commissioners will support these new appointments.”
Parry says gaps at lower levels urgently need addressing too, singling out property asset management. “It’s very difficult to get decisions about varying leases or buying freeholds. Those are basic functions which need to be properly resourced so that investors in the city are dealt with efficiently.”
Stability is coming
John Moffat, joint managing director at Capital & Centric, shares Parry’s commitment to and belief in the city. The developer is behind long-running council and regional authority-backed plans to redevelop the Littlewoods building and adjacent six-acre site into film studios.
The scheme was dealt a blow when Liverpool John Moores University dropped out as one of the anchor tenants last autumn. But Moffat says the success of the Depot sound stages, which the council opened opposite the Littlewoods Building in 2021, have “proven the market is there for the main development”.
Asked about the recent council appointments, he says: “Getting permanent people in strategically important roles is a critical step in giving confidence that Liverpool is a place to come and do business. We have never really stopped looking at the potential for projects in Liverpool because we believe in the city and its future. That said, the appointments should give confidence that stability is coming.”
What he hopes now is to see the delivery of some of the city’s major regeneration schemes – and that needs action from the council.
“They need to set their strategic regeneration priorities and work with the private sector to unlock that investment. Our experience of working with the council over the past six months has been super positive, with a real sense of a new approach to overcoming challenges and getting projects going.
“Liverpool is an internationally renowned city with a unique opportunity to bring about transformational change. There are key sites and districts with pent-up potential. Having an ambitious and forward-thinking council in place to help guide that should hopefully give confidence that it’s a place where things happen.”
Doyle says there is now a “palpable sense of momentum” and a growing level of interest from institutional investors in the city, adding that a huge amount of effort has gone into making progress on projects such as Festival Gardens and Littlewoods over the past 18 months, in parallel to a programme targeted at fixing the workings of the council. “All of this activity is underpinned by a strong strategic vision informed by the city’s new local plan and a number of key policies recently adopted to encourage economic growth and development.”
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