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Size 558 acres Where junction 8, M62 motorway, Warrington Developer Miller Developments/Royal Bank of Scotland Proposed development 5m sq ft offices, 1.8m sq ft industrial and distribution Timing Industrial start on site 2007 (if planning approved) Agents GVA Grimley and Jones Lang LaSalle Development period More than 20 years Landlord English Partnerships |
A vast out-of-date attempt to deliver a 1980s product in a world that has moved on, or a major plank in the North West’s economic regeneration? The proposed 7.4m sq ft Omega scheme in Warrington divides opinion in the region’s property industry. After nearly 18 years, and with at least £42m of taxpayers’ cash pumped into the project, what is supposed to be Europe’s biggest out-of-town business park still remains a no-show.
This month, Omega faces yet another challenge as the planning inspector publishes his report into Warrington’s unitary development plan. He has to choose between two rival factions.
One, led by Liverpool, Manchester and Salford councils, argues that the scheme will hurt inner-city regeneration and create massive traffic problems. The other, led by the scheme’s sponsors – Warrington council, landlord English Partnerships and developer consortium Miller/RBS – claims the scheme is essential if the North West is to achieve economic lift-off.
The £1bn business park is now highly unlikely to win planning permission before the year is out. With the Government Office for the North West mumbling concerns about Omega, a public inquiry seems inevitable, and a start on site before 2007 has begun to look optimistic.
Many senior figures in the North West’s property business have lost faith in Omega. Others have merely lost interest. EP still has plenty of clout in the region, and few want to be seen biting the hand that feeds them. But talk in confidence, and the mood soon becomes clear. “I don’t think I’ll see it built in my working lifetime or in the lifetime of people who are younger than me,” says one senior property figure.
An acknowledged doyen of North West urban regeneration adds: “The inward investment market just isn’t like it was when they began to plan this scheme. It has a very 1970s feel about it. There just aren’t many – or perhaps any – big inward investors who want huge greenfield sites. It’s old-fashioned in terms of both the location and the justification EP offers for it.”
Eliot Lewis-Ward, EP director, says the scheme is very much wanted in the area. And developer Miller protests that the scheme “addresses UK demand for offices as well as enabling the country to compete in a European and worldwide context for ‘footloose’ demand”. But this has not eased concerns in some quarters.
The first big concern is about Omega’s office provision. The scheme’s masterplan is heavily focused on offices. In total, the site will see 5m sq ft of offices, 1.8m sq ft of industrial and distribution, and the remainder set aside for leisure and retail use.
Informed observers doubt that the weighting makes sense in today’s market. “The balance should be reversed,” argues one agent. “The site is ideal for industrial and distribution space. It’s clear that large sheds would let quicker at Omega than large offices.”
Others think the scheme could work, however. Andrew Shaw, director at CBRE, says cautiously: “Provided that the offer is pitched competitively, there is no reason why it couldn’t succeed.” But Ken Bishop, director at DTZ, disagrees. “Omega is a challenging site that is perhaps too ambitious in current market circumstances, and a more balanced scheme would probably provide greaterbenefits to us all,” he says.
Miller, meanwhile, is adamant that the scheme will not be changed. “The team believes that the objections do not necessitate further changes to the masterplan,” says Adelle Peattie, associate director at Miller Developments.
Looking at the long planning battle ahead, one defeated bidder for the Omega site now insists he is delighted he failed. “The way planning has moved, it makes Omega stand out as a conspicuous exception,” he says. “As each day goes by it looks even more anomalous.”
A senior agent in the region adds: “There is no doubt that out-of-town office schemes have had their day. This is a site that’s frankly beyond its sell-by date.”
Of course, Miller does not agree. “Miller Developments has always understood the timescales involved with Omega since the company first became involved, and therefore has always been mindful of the current and future market demands that Omega is being driven by,” says Peattie.
Masterplanning strategy
“The masterplanning strategy has taken into account the need to respond flexibly to future demand trends. Whereas there is at present less inward investment activity, this will undoubtedly change and, given Omega’s timescales for development, we are taking a long-term view on development.”
However, there are some signs that the Northwest Regional Development Agency shares the view that the scheme could benefit from adjustment. “We probably want to look at the phasing again – and what’s in those phases – meaning the balance between office and industrial,” says Steve Broomhead, chief executive of the NWDA. “We’re discussing this with EP and Warrington council.”
The second big concern is about Omega’s impact on Liverpool, Manchester and Salford. These are areas where EP is sponsoring urban regeneration companies, all of whom fear that Omega could suck resources, commuters and occupiers away from them.
Jim Gill, chief executive of the Liverpool Vision URC, says: “EP has been hugely supportive of what we’ve been doing in Liverpool city centre, but Omega could impact on the scale and pace of our success at urban regeneration.” Salford council is even more frank. “Omega cannot be considered to be a sustainable development,” says its letter of objection.
Miller rejects this, saying: “Omega has an expansive sustainable policy which supports the outline planning application submitted in October 2003. As a 25- to 30-year development, Omega has, since day one, been underpinned by principles of sustainability throughout all thinking and ongoing design proposals.”
Faced with these two opposing views, some old hands – such as former NWDA chief executive and now chairman of Liverpool Land Development Company, Mike Shields – hope for a compromise. He says: “I understand why Manchester and Liverpool are objecting — they see Omega competing with other proposals — but there ought to beopportunities here for Miller and the cities to sit down and work out a way forward.”
A more mixed scheme, with less emphasis on offices, could provide the basis for a compromise, and some suggest that a residential-led Omega might provide a face-saving solution for EP and Miller/RBS. But Miller stresses that the scheme will not be changed.
Major contribution
With delays mounting and controversy growing, EP’s Lewis-Ward insists that Omega has not been derailed. “Absolutely not. There’s a huge appetite for the scheme in the region. Omega has got a major contribution to make to the Northern Way growth strategy, and it’s cited in the regional economic strategy and regional growth strategy,” he says.
“It’s about creating regional economic growth and complementing the region’s offer. Frankly, I don’t think the North West has fared terribly well against other regions in attracting the kind of users we’re after at Omega, and creating this site will make a big difference.”
Miller’s Peattie adds: “The Miller team driving Omega, advised by Jones Lang LaSalle and GVA Grimley, firmly believes that demand from the inward investment market will look towards Omega as there are less and less opportunities to cater for requirements of this scale in the North West.
“Omega adheres to the current planning regime. The regional spatial strategy for the North West identifies Omega as one of 11 regional investment sites in the region. The NWDA’s regional economic strategy 2000 also identified Omega as a strategic site, and the revised 2003 RES reiterates this view.”
Broomhead remains supportive. “Omega fits our strategy. It remains a key priority, and we think it could make a positive contribution to economic growth. It would have enormous benefits for the sub-region,” he argues.
And Lewis-Ward brushes off concerns about delays. “The development programme has been extended to address the highways issues that have arisen. But by early spring 2006, we’d hope to see work on site begin, assuming the planning application is not called in,” he says.
Omega does have loyal supporters in the region’s private sector. Peter Gallagher, director at Dunlop Heywood Lorenz, is one. “Omega is a North West project, a North of England project. It is important to the offer the North West can make, and without it we’d be that much poorer,” he says.
But with the big cities and much of the property industry lined up against it, Omega still has many hearts and minds to win before development – eventually – begins.
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When Omega was launched, the world looked very different. In the late 1980s, overseas firms were taking large sites around the UK, many in the North East and South Wales. The North West wanted its share, too. The 558-acre former RAF Burtonwood air base was first earmarked for international inward investment by the Commission for the New Towns in 1987. It was allocated for employment use, on the same basis, in the Cheshire structure plan of 1992. By 1995, however, Omega had no takers, and it became clear that a motorway junction would be needed to open up the site. Two years later, the government gave the go-ahead for junction 8 on the M62. The Omega site now became the responsibility of English Partnerships, initially CNT’s partner organisation, then successor. The creation of the Northwest Regional Development Agency in 1999 meant a crisis for EP, which suddenly found its wide-ranging role curtailed. One observer recalls: “When the new development agencies were set up, EP was suddenly grasping at anything that could justify its existence, anything that would be a raison d’être. Omega helped to keep people in work and give them a sense of purpose.” In 1999, the NWDA declared Omega a regional “strategic site”. By 2001, EP had organised a development competition. British Land/ProLogis and HBG/Grosvenor withdrew their bids so that, in the final play-off, Miller/RBS beat AMEC/Morley Fund Management. In 2004, Manchester and Liverpool formally objected to the plan, and the Government Office for the North West made its concerns known. A further one-year delay was announced by EP, and it doubled that period early in 2005. |
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Back in 1999, the newly established Northwest Development Agency began to ask serious questions about the Omega office and distribution park. Notes scrawled by Mike Shields, then NWDA chief executive, on a letter from Miles Anderson, commercial director of the Commission for the New Towns, prove it. The NWDA had already told Anderson that it was worried that Omega would not bring benefits to depressed local communities, and about the environmental impact of more traffic. In the letter, dated February 1999, and revealed under the Freedom of Information Act, Anderson’s reassurances – based on the idea that benefits would “trickle down” – did not impress the NWDA. The reaction was “fairly predictable”, Shields scribbled on the letter, adding: “We need a more focused attempt to link needs and opportunities.” In the same letter, Anderson argued that the development site was of regional significance, but a note made in the margin by Shields reads: “NO – need to pursue this.” Today, Shields says: “Omega was always regarded as potentially important – but it was also extremely important that it was seen to be relevant to local communities. We were saying ‘you’ve got to tap into the areas where unemployment is higher and not just create commuter traffic’. It mustn’t just be another motorway business park.” |
