Pydar scheme needs urgent £10m to continue
The development would see 300 new homes, space for 400 students, cafes and restaurants
A major £160m project planned for Truro needs urgent money to continue the scheme.
The plans to regenerate the Pydar area of Truro needs an urgent £10m cash injection from Cornwall Council in order to continue.
The local authority’s Cabinet will hear next week that work on the massive project could become “abortive” if extra funding is not provided to allow it to progress.
The development would see 300 new homes, space for 400 students, cafés, restaurants, nature trails, a hotel and other leisure, hospitality and cultural facilities. There are also plans to create a hub for creative industries with Falmouth University, bringing more young businesses and students into the heart of the city.
Outline approval for the scheme was approved by Cornwall Council’s strategic planning committee and demolition works have been partially completed. However, Cornwall Council’s Cabinet is being asked to provide capital funding totalling £10m to cover the project costs over the next two years to allow for further design and rephasing work before a full business case back is brought back to Cabinet members.
A report to Cornwall Council’s Cabinet, to be discussed on Wednesday, March 20, states that since July 2022, the project has suffered from significant construction inflation and heightened GILT rates a type of bond issued by the government in order to finance public spending, which have stalled the ability to sign a private finance funding deal.
Changes to the Building Safety Act last year placed additional requirements on residential buildings above 18 metres, a sudden change from the previous 30 metres guidance, which means parts of the Pydar scheme will need “an element of redesign”.
“The combination of these two eventualities will delay physical progress on site and result in the need for a re-focus into the delivery strategy and next steps for this important regeneration scheme,” adds the report, which is written by senior council officers.
It states: “Whilst the project remains viable over the long term, the project requires an underwriting through a loan guarantee and an injection of grant funding by the council to allow progress to the next stage.” It also states: “The investment of c.£6m in the project to date has made the project shovel ready and this could easily become abortive if the project does not progress.
“In addition, there is a risk of losing market interest and a delay could impact active negotiations with new businesses to Truro including the university sector, hoteliers, workspace providers and leisure facilities. Pydar is now at a critical stage and needs an injection of funds to continue to move the project forward whilst we continue design work and financial negotiations to prevent economic stagnation and long-term project delays.”
The proposed ask for £10m funding over two years will deliver the following:
Design work, planning process/application and procurement of contractors to deliver the gateway and St Clement Street frontage
Continued market negotiations and pre-lets with interested tenants
A “context of commitment to delivery” to allow Homes England negotiations. Homes England at a regional level has cited three schemes across the South West as its current regeneration priorities, one in Bristol, one in Plymouth and the Pydar scheme.
Review of wider delivery strategy and a positive context for negotiations with university partners
Implementation of the new Building Safety Act requirements on existing reserved matters approval for consented blocks and the wider masterplan
Legal and procurement fees to enable the progression of the private finance deal for decision to approve
Demolition and archaeology works to the remaining assets to remove the financial liabilities these buildings currently incur on the council
Surveys and other enabling and infrastructure work ahead of contractor appointment. This includes placing orders for the new electrical connection from Shortlanesend Sub Station and other service diversions in preparation for Pydar Street and St Clement Street road works.
The report adds: “We propose to spread the £10m of funding over two years to take full advantage of other potential investment partners, possible future grant and possible reductions to GILT rates and thus minimise the expenditure from the council.”
The Pydar site in Truro city centre falls within the 30 per cent most deprived areas in England. The council says the overall scheme will deliver direct growth of £4.6bn in Gross Value Added (GVA – basically, income) to Cornwall, which represents the equivalent of 1.4 per cent of Cornwall’s overall GVA (in 2020).
“For one project to register on the GVA for the region is unique and should be considered in decision making, particularly when the region is committed to growth,” the report stresses.
Progress made on the development over the past 18 months includes:
Completion of demolition work in November 2022
Ongoing detail design development for three viaduct blocks and university
Engaging with Truro City Council at regular workshops
Continuing internal and external engagement with stakeholders, including businesses and the community, through public consultation events and other forums
Regular meetings with the local planning authority to discuss discharge of conditions, pre-apps and engagement of statutory consultees, all in preparation for the reserved matters application submission, which were approved on May 26, 2023
Continuing with works on the site including archaeology, utilities diversion work and other surveys
Falmouth University signed the Heads of Terms to relocate 750 students, making national property news which subsequently raised interest from other new national chains and businesses including hotels, workspace providers and leisure facilities
Procurement of the contractor has started.
The report adds: “At this stage, Treveth Development LLP has been retained as development manager but on the basis that this continues to be delivered as a council-controlled project.
“The recommended delegation to the strategic director for sustainable growth and development provides for flexibility to ensure we can have the most efficient form of delivery including the potential to grant fund Treveth or any special purpose vehicle set up to deliver the scheme for that entity to take the lead on delivering the next phases of Pydar. It also ensures that there is no delay in continuing to develop the project.”