Plans are in hand for development of a dozen sites around the capital, and the city council is aiming to help deliver these projects to give our economy a head start, writes Frank Ross
While the economy is prospering, we can’t be complacent and need to keep sustaining and increasing the city’s growth as we review progress this week on the council’s economic strategy.
One thing that has astonished me during my first year as economy convener for Edinburgh is the scale of development under way across our capital. Totalling around £3.8 billion, the city has seen an unprecedented level of infrastructure investment.
Edinburgh’s success in this area has far-reaching benefits across the wider city region and Scotland as a whole. We are major partners on the £350 million Borders Railway, which will link Edinburgh with Midlothian and the Borders. We also play a key role as the local roads authority for the £1.45bn Forth replacement crossing.
Other flagship projects include the £295m upgrade of Waverley Station – which is now almost complete – and the £77m Haymarket Station Interchange project, which alone will create 4,000 jobs, 400,000 sq ft of office space and 100,000 sq ft of retail space.
To build on this success and sustain our employment levels, we need to ensure that under-performing parts of the city are brought on stream. The credit crunch has left many sites dormant because so much speculative finance has dried up. The ultimate goal is not just to sustain our economy, but to ensure that we preserve and enhance the richness of the city’s physical fabric and, in turn, create places people want to live in.
To that end, I have commissioned a study of the 12 priority development sites with short-term transformational potential. We estimate that these 12 sites have an end value of £2.14bn and the potential to create a staggering 20,000 jobs.
Such enormous economic promise could deliver the council’s 2012-17 Strategy for Jobs targets in one fell swoop. Set out a year ago, these targets commit us to supporting the creation and safeguarding of 20,000 jobs; £1.3bn of infrastructure investment in the city and helping 10,000 of Edinburgh’s most vulnerable people into work or learning.
While we are already £1.26m ahead of target on our infrastructure goal, we believe that unlocking the potential of these 12 city centre sites is critical to building momentum. The sites are:
Haymarket – a prime commercial development, including hotel, leisure, retail and office space.
Dewar Place – a master plan has been prepared for this Exchange District site.
Caltongate – a mixed-use development in Edinburgh’s Old Town comprising office, residential, hotel, retail and leisure, this has consent already. A revised scheme is currently under consideration.
Shrubhill – two development sites with differing ownership and consents.
Royal High School – category A-listed building in Edinburgh’s World Heritage Site. Current redevelopment options being considered include an arts hotel, subject to necessary consents.
Donaldson’s College – a historic A-listed building with potential for residential or hotel use.
India Buildings – multiple ownership and listed status. Options include an integrated development featuring a hotel.
King’s Stables Road – prime location for mixed-use development between the Grassmarket and King’s Bridge.
Fountainbridge – three sites in separate ownership with approved masterplan. Site is already partially developed with residential and student residences, with planning permission in principle granted for a mixed-use development to the south of the site. A revised master plan will be produced in 2014.
Quartermile – a mixed-use development comprising hotel, residential, retail, office and leisure. It is largely developed, but further residential units and office space are still to be delivered, with the potential for a boutique hotel.
St James Quarter – consent granted in principle for £850m redevelopment comprising retail, leisure, hotel, offices and residential.
3-8 St Andrews Square – World Heritage/New Town Conservation area site with mixed-use development potential including offices.
Together these sites are more than the sum of their parts, creating exciting new opportunities for our office and tourism sectors.
Many of the 12 sites already have planning consent and could be developed within five years. But construction is a complex business and each project has its own unique challenges.
Lack of investment funding remains a critical problem. In this age of austerity, public spending on infrastructure has plummeted. Credit rationing by the banks has also significantly hampered the construction and development sectors.
If we are to help these 12 city centre infrastructure projects over the line, public sector intervention is required, and as a council, we have a role to play in this. We are exploring a number of possible support mechanisms, including creating our own city investment fund. The council has agreed draft plans in principle for up to £7.5m of investment in city centre infrastructure and we are hoping to find partners who will match this, including private sector investors.
We are also looking at the potential for a “City Deal” along the lines of that in Manchester, where a city might borrow against future tax rises to support infrastructure development.
We are looking at the European Structural Fund programme and a raft of alternative funding opportunities that have arisen over the past few years.
And we are doing a pretty big piece of work through the Scottish Funding Council to create a new finance framework that will seek to bring these disparate financial streams into one single city fund.
Importantly, we are working in partnership with property developers, agents, investors and end users to address specific issues, and we are helping the council’s investor support team promote the development potential of appropriate sites to stimulate occupier demand.
There is a big opportunity here for the private sector to look at investing with us. We have had particular interest from pension and institutional funds which are looking for quite low levels of interest in return for long-term cashflow, and we hope other investors will follow suit.
We also highly value the advice and feedback private sector partners can offer us. The success of our Strategy for Jobs lies in effective partnership working across the public, business and third sectors, and a flexible approach to dealing with the challenges that arise.
One of the capital coalition’s commitments is to provide for Edinburgh’s economic growth and prosperity. The key is to embrace the opportunity that these under-used city assets offer us to create new employment and prosperity for the city, and for Scotland as a whole.
• Councillor Frank Ross is the economy convener of the City of Edinburgh Council