Churchgate - Frequently Asked Questions
This FAQ section has been prepared by NHDC and Simons Developments in response to public comments raised to Simons’ initial vision for the Churchgate area, through the Churchgate Liaison Forum meetings, the media and other correspondence. This page will be regularly updated as the project progresses.
Has a risk register been performed with regards to the project plan and if so is such a report available for public inspection?
A risk register has been prepared for the project and is monitored and updated by the Churchgate Project Board. The risk register as at January 2012 is available.
Churchgate Risk Register (updated Jan 2012)(170kb)
More general risks associated with the development are identified in the delivery timing section (Section 21) of the redacted version of the Simons Tender Document.
Why is NHDC not delaying town centre development given the current economic climate, as some Councils have done?
Comparing progress on schemes in different towns is misleading. There are a wide range of variables that affect the viability of projects and, therefore, the ability to proceed with them. It is not for this Council to comment on decisions taken by other Councils since we do not know the detailed considerations behind their decisions.
Whilst we are clearly facing a challenging economic climate, Simons are working hard in preparing a development proposal for the Churchgate area. The Development Agreement (DA) signed between NHDC and Simons outlines the steps required to deliver the scheme. It imposes certain conditions that must be met by Simons before carrying out any development on the site. The contract signed with Simons does not require the Council to make any financial contribution to the progression or development of the scheme.
The Council sees no reason why the Churchgate project should not continue to progress. This is in the anticipation that Simons will be able to prepare an acceptable scheme, contributing to the future economic viability of the town centre. By continuing with the project at this time, a scheme could be in place to take advantage of any future upturn in the economy.
Why is the cut off date for submission of a planning application been removed from the redacted version of the Development Agreement?
The cut off date in the redacted version of the Development Agreement has been removed for commercial sensitivity reasons. This is not uncommon for projects of this scale.
Has the Council considered a “Plan B” should the Churchgate Project not come to fruition?
A Plan B will only be required if the Project Board determines that there is a sufficiently high risk of the current project failing to meet the requirements of the Development Agreement (DA). The Project Board reviews the risk at each meeting and has determined that exploration of potential alternative options at this time would be entirely speculative thus no meaningful Plan B could be decided upon.
There might be a number of different reasons as to why the project might not work and require a Plan B to be prepared and reported to Cabinet. For example, this could be on financial viability grounds, inability to conclude on land assembly or ultimately due to a lack of planning permission. These, along with other reasons, might mean alternative solutions are required. If nothing is viable then the project could end at that point, with no money being invested in the town.
At this point in time the project is proceeding in accordance with the requirements of the DA. If in the future an alternative approach is required, a report will be taken to Cabinet.
Are there any plans in the future to sell the freehold on any of the sites in the proposed scheme?
The details of any transfer of land as freehold to the developer or a third party would have to be in accordance with the requirements of the Development Agreement. Any plots intended for predominantly residential use, for example the proposed residential town houses on Biggin Lane car park as shown in the Simons tender scheme, would be transferred to the developer as freehold. Any premium received on disposal will be used to improve the overall viability of the scheme and thereby its prospects of proceeding. This will also assist in enhancing the Council’s revenue stream from the site as the Council will retain the freehold of the remainder of the land it owns, which are to be let to Simons on commercial and residential leases. Members were made aware of this in the financial and legal reports that went to the various committees including Full Council on 25th February 2010 .
What role will English Heritage play in the determination of the Churchgate Project?
English Heritage have been involved at different stages throughout the life of the project and were consulted when the Churchgate Planning Brief was prepared. English Heritage will be a statutory consultee for the planning process and will continue to be consulted as the scheme evolves.
Does Simons restructure impact on the Development Agreement?
In March 2010 Simons carried out a review of its business structure. This restructure did not involve any changes to the ownership of the Simons group companies. As the Development Agreement is in the name of the company and not its directors the restructure does not have any impact on the Development Agreement.
What is the status of the Churchgate Project Board?
The Churchgate Project Board was established by Full Council “to act on behalf of the Council in respect of all functions required under the Development Agreement (DA) and the delivery of the Churchgate project generally. This includes approving any scheme prior to its submission for a planning application. The Project Board reports to Cabinet where necessary and Cabinet may then refer matters to Full Council.
Which Councillors sit on the Project Board?
There are four Councillors on the Project Board, none of whom are Planning Committee Councillors, to ensure separation of duties at Member level. The portfolios which currently make up the project board are: Leader of the Council; Finance Portfolio Holder; Planning and Enterprise Portfolio Holder and Chair of Hitchin Area Committee.
What is the purpose of the Development Agreement?
The Development Agreement is a legal contract signed between the Council (NHDC) and Simons Developments as its developer for the Churchgate centre and the surrounding area. It outlines the steps required to deliver the scheme and it is normal practice to have such an agreement at the start of such an important project.
The Agreement imposes certain conditions that must be satisfied by Simons prior to the grant of any lease or the carrying out of any development on the site. There are certain milestones within the agreement that must be met and break clauses should Simons fail to meet its obligations as set out in the Agreement.
What profit are Simons allowed under the terms of the Development Agreement?
The Development Agreement provides for Simons to receive a fixed profit on their investment, in carrying out the development. If that fixed profit level is exceeded the Council and Simons will share in any additional profit.
It is premature at this stage to anticipate the profit as Simons are still working on their proposed scheme, and until this scheme is fixed the detailed final financial modelling cannot be undertaken.
Does the Development Agreement prevent Simons from building on St Mary’s Square and Portmill Lane?
No – the Development Agreement does not preclude development on these sites. Within the background section of the Development Agreement there is reference to the key development objectives of the procurement exercise, one of which was development on Churchgate, the Biggin, the market and enhancement of St Mary’s Square and Portmill Lane. Another key development objective quoted was to maintain the key open views of St Mary's Church particularly from Queen Street. This background section is not legally binding . It is there to assist with the interpretation of the Development Agreement in the event of a dispute.
Ultimately the Planning Authority will decide what, if any, development is appropriate on the entire site including St Mary’s Square and Portmill Lane.
Where can I access a copy of the Development Agreement?
A redacted version (redacted for commercial sensitivity reasons) of the Development Agreement is available to view under the Procurement Process.
Why has the Council agreed to a 250 year lease for the development?
At the time of drawing up the Development Agreement the Council sought expert advice from DTZ (development adviser) and Eversheds (legal adviser) on the requirements of the bidders for a 250 year lease. Both companies advised that a lease of this length was required by funders and reflected the requirements of the development market as it offers the level of security required for funding multi-million pound developments.
When will the lease be granted?
The Development Agreement allows for a 250 year lease to be granted subject to Simons having first met a number of requirements in the Development Agreement including having planning permission granted. The lease contains safeguards to protect the public interest and the Council’s financial return.
Will the Council retain any ownership of the land and who will ultimately own the lease?
The Council will retain the freehold as it owns the majority of the land potentially being used in the scheme. The Council will not receive payment for granting the lease, instead in return for granting the lease it will receive a share of the rental income. Simons could sell the lease onto a funder, such as a pension fund, which is the usual approach for this type of development.
Where can I see a copy of the lease?
A redacted version (redacted for commercial sensitivity reasons) of the lease is available on the Procurement Process .
What income does the Council receive under the lease?
The Council will have a minimum guaranteed annual income of £200,000 from day one of the scheme opening. The current estimates are that the Council’s income will be £350,000 per year, equivalent to existing income from the Churchgate centre and surrounding car-parks.Should retail rents increase in the future then the Council will gain its share of the increase. However it is not possible for the Council to provide certainty at this point in time as to the precise income it will receive as the scheme is not yet designed and therefore cannot be financially modelled.
Why has the Council accepted 10% ground rent for any new scheme when the current Churchgate owner pays approximately 40%?
Seeking to compare the percentages of rent paid to the Council is misleading. It is anticipated that the redevelopment will increase the overall income generated by the site. Therefore a smaller percentage figure is acceptable as it will still give at least the same and potentially a greater return than currently received. For example, if we get 40% of £100 we get £40. If we get 10% of £400 we still get £40.
Is the Council required to make any further financial contribution?
The Council is not required to make any further financial contribution to the development. However, the Council would have to forgo some rental and car-park income during the construction period. When the final scheme is known, discussions will take place regarding phasing of the construction works to seek to minimise any loss of income to the Council.
What benefits will the development bring to the town other than shops and housing?
As part of the £50million project there will be improvements to some areas of Hitchin Town centre, including a river walkway, public space and market. Council taxpayers will make no financial contribution to these improvements. In the current financial climate, it is extremely unlikely that the Council could afford to carry out any investment itself. In the longer term, repairs and maintenance costs of some areas, e.g. any multi-storey car-park, will also be covered and will therefore represent a saving to the council tax payer.
Are Simons allowed to have a Joint Venture Partner?
Under the terms of the Development Agreement Simons can seek a Joint Venture partner but that partner would have to be approved by the Council. No proposal has been put to NHDC at this time (11 May).
Why is Simons entering into a joint venture partnership with a third party to fund the scheme?
Simons are in negotiations to bring in a joint venture partner for the development. This will enable them to acquire key assets that would enable progress to be made on certain elements of the scheme including the purchase of the existing Churchgate centre. A joint venture partner also has the potential to be the long-term owner and operator of the site.
By seeking a partner now, Simons will be able to focus their resources on the development and planning aspects while the partner deals with acquisition of key assets to ensure that any scheme that receives planning approval is capable of being delivered in a timely fashion. Simons would still head the development and be responsible for delivering it.
Who is responsible for leading the public consultation process?
Simons are responsible for leading the consultation process with input from the Council where appropriate. The Development Agreement states that Simons must hold public consultations in respect of the development in accordance with a consultation strategy agreed with the Council.
Mechanisms are in place to ensure that all comments and feedback are recorded, for example through the Churchgate Liaison Forum Meetings, through regular updates to the Hitchin Committee, and through the Council’s website. These are reported to the Churchgate Project Board for awareness and action where appropriate.
Simons will have a public exhibition on their revised scheme prior to it being submitted as a formal planning application.
What is the current position on Landlord Consent and Licences to enable Hammersmatch refurbishment to progress?
The Council has granted landlord’s consent for the refurbishment works. One of the conditions of the consent relates to agreeing licences for the works. These relate to the area within the terms of the lease (for example the shop fronts) and the areas outside the terms of the lease (for example the works to resurface the mall walkway which the Council retain as a freehold interest not subject to the lease). Licences are quite usual and are there to provide the detailed terms on which the works can take place, including indemnities for us as landlord. These licences are currently in the process of being finalised between the solicitors acting for both sides.
How can the Council separate its corporate and planning functions in progressing the Simons development proposal?
The only decision the Council has made is that of appointing Simons as development partner. At the Full Council meeting in February 2010 it agreed that their tender submission outlining their initial vision should go out for public consultation. The Council has made no decision on the initial scheme set out in the tender.
The Churchgate Project Board was established by Full Council “to act on behalf of the Council in respect of all functions required under the Development Agreement (DA) and the delivery of the Churchgate project generally”. This includes approving any scheme prior to its submission for a planning application. There are four Members on the Project Board, none of whom are Planning Committee Members, so we have ensured separation of duties at Member level. None of the officers on the project team will be the planning officers processing and considering any application on behalf of the Planning Authority, so we have ensured separation of duties at Officer level as well. The Council will discharge its obligations separately as a development partner with Simons, through the provisions of the DA, acting independently from the pre-application discussion between Simons and the Local Planning Authority.
The Local Planning Authority will undertake best practice, as advised in central government guidance, Planning Policy Statement (PPS) 1 'Delivering Sustainable Development' (2005) para 12. 'Pre-application discussions are critically important and benefit both developers and local planning authorities in ensuring a better mutual understanding of objectives and the constraints that exist. In the course of such discussions proposals can be adapted to ensure that they better reflect community aspirations and that applications are complete and address all relevant issues. Local planning authorities and applicants should take a positive attitude towards early engagement in pre-application discussions so that formal applications can be dealt with in a more certain and speedy manner and the quality of decisions can be better assured.'
Simons and the Local Planning Authority are at the beginning of this process. They will undertake a constructive dialogue which will involve full consideration of development options and preparation of amended plans to take account of community concerns. If following exhaustive dialogue Simons and the Local Planning Authority are unable to reach an agreement on a scheme then the planning officers will not support the proposal in their recommendation to the Planning Control Committee. Nonetheless, as is set out in PPS1 it is best practice to engage in the pre-application discussion process in order to seek agreement where possible. It is clearly far too early for the Council, Simons or any other interested party to pre-judge the outcome of this dialogue.
These FAQs are in response to the public feedback raised on Simons' initial vision for the Churchgate area. A more detailed version of this FAQ is available by downloading the following document:
FAQ's Detailed Version from May 2010 Consultation(revised) (211kb)
The FAQ document which relates to the procurement process is archived and is available on the Churchgate archives.
Where can I find details of the feedback from the exhibition in May 2010?
A Summary Report of feedback received from May - July 2010 and anonymous individual responses is available on our Churchgate exhibition feedback page.
How can I make my views known on the project?
There are a number of ways to have your say as the project progresses. Go to our getting involved page to find our more.
What are the reasons for this proposed development?
The appointment of a development partner is the next step towards achieving the Council’s long standing aim of redeveloping a part of central Hitchin which does not do justice to the rest of the historic town. The Council needs to be planning for future growth of its town centres in order to ensure that they at least retain their market share in the future, otherwise local residents will go elsewhere to meet their shopping requirements, which could have a negative impact on the economic viability of the town centre.
To what extent can the scheme shown at the exhibition be changed?
Simons’ plans are by no means fixed at this stage, and the proposals presented at the exhibition were some of Simons’ initial ideas for development. It is expected that the designs will evolve as a result of public consultation and meetings with a wide range of local stakeholders over the coming months.
How do Simons’ proposals relate to the brief drafted by the Council a few years ago?
The Churchgate Development Area Planning Brief was adopted in 2005 as the Council’s Statement of Policy. This identified five areas, three for development and two for enhancement which was reflected in the information supplied to potential developers. Simons’ current proposals represent changes to all these areas and ultimately the Local Planning Authority will decide what level of development is acceptable.
Further information on the status of the Churchgate Planning Brief and subsequent documents, including the council’s response to the Hitchin Society letter of 24th May 2010 can be found on the Council’s website.
There are several shop units lying empty in Hitchin currently. Why do we need more retail units?
Simons’ view, backed by independent reports is that a large amount of retail spending is leaving Hitchin to nearby towns, i.e. many people who live in the town are not shopping there. Simons believe that by attracting a mix of high quality retailers in the proposed scheme, it is hoped that this increased footfall will help to support independent businesses in the town and fill empty units by bringing more people into the town.
Simons believe their proposals are an appropriate scale that will complement the existing retail layout of Hitchin and not threaten the Independent traders already present. In addition, it is important to remember that the development, if approved, is unlikely to open until at least 2015, when the economic situation is likely to have improved significantly from its current state.
Why do we need a Department Store?
The proposed ‘anchor store’ is around 2,800m², which is significantly smaller than many ‘department’ stores and is actually smaller than the old Woolworths.
These stores are often seen as indicators of the health of a town’s retail offer, and help to attract shoppers and other retailers to the town. Without such a store in this development, other retailers may not be as willing to open new shops in Hitchin.
Why are Simons confident there will be demand from retailers and we will not be left with a “White Elephant”?
Simons have a strong record of delivering town centre developments and retaining high rates of occupancy. Independent analysis and advice suggests that Hitchin is an attractive location for a number of major retailers. and Simons have spoken to a number of retailers who have confirmed they would be interested in opening a shop in Hitchin. If there is not enough demand, the new shops will not be built.
Why are the Council not doing something to help let the empty retail units in Hitchin at the moment?
Although the recession has had an effect, Hitchin is actually performing much better than the majority of town centres in the region and the UK as a whole. The Council is not the landlord nor does it set business rates or receive income from the rates – the Council simply acts as collection agents for the Government, who then use the income from business rates across the country as they see fit. The Council can help by encouraging retailers’ interest in the town, which is one of the main aims of this proposed development.
Will the development obscure views of St Mary’s Church from Queen Street?
The view from Queen Street will be restricted by the proposed buildings on St Mary’s Terrace, as the proposals currently stand. Council officers and councillors have previously expressed concern over the width of the proposed gap between the buildings and consideration of this will be prominent in the consultation process. It should be noted that the proposed gap between the two buildings is wider than the existing gap between buildings on Hollow Lane.
How close will the proposed building be to St Mary’s Church?
Simons initial proposals are for development on the current St Mary’s Square car park, and would leave St Mary’s terrace as it is. The distance from the proposed kiosks (fronting on to St Mary’s Terrace) and the church would be 55 metres with, existing stairs and walls retained. The proposed anchor store and car park would be a further five metres away. The buildings on Churchgate Walk (the proposed new street) would be very similar to the existing Churchgate Centre. One of the common suggestions that came out of the 2004/05 public consultation was the importance of improving views from St Mary’s Church and creating a sense of enclosure. This is one of the central elements of Simons’ vision.
Who will operate the car parks? NHDC, or a commercial operator like NCP?
No decision has yet been made about who will be responsible for the operation of the car park.
How exactly will the car parking be ‘attractively hidden’?
The car parking as proposed will be within and under St Mary’s Car Park. The current proposal has a net gain of approximately 60 public car parking spaces. This may be subject to change as the scheme evolves. The building is designed not to appear as a car park from the outside and will have activity on the St Mary’s Terrace and Queen Street sides of the building. The only part of the building that could be identified externally as a car park would be the Portmill Lane entrance/exit.
During the detailed design stage Simons will continue to look at further options for achieving the aim of hiding the car park from view.
Do we need more residential properties? There are already houses/flats lying empty in Hitchin.
The Council’s latest report on housing indicates that current population trends within the district will lead to the creation of around 20,000 more households by 2031. The demand for more housing, particularly in town centres, will continue to grow. The proposed development offers only a very small fraction of the overall requirement. Simons will review the appropriate mix and type of residential development throughout the design process including negotiating the need for affordable housing.
Where will the market traders unload and park their vans?
This issue has been acknowledged by officers, members and Simons as requiring discussion with the market traders. Simons will work with the market traders and operators to review all options, including the market’s location. Simons recognise the market is one of the main reasons people shop in Hitchin and need to ensure that the market is correctly located.
Can you include the Royal Mail building, Church House and the telecoms buildings and 1960s flats on Queen Street in the development?
These are not part of the development area. The scheme however does not prevent any future development taking place on these sites.