Crewe redevelopment project hits the skids

Cheshire East’s latest white elephant has hit the skids after a new report says double-digit inflation had hit the build cost – already in excess of £40m.

The report partly blames the cancellation of HS2, which is nonsensical, the Crewe Royal Arcade scheme had been condemned by many as a monumental waste of council taxpayers money from the outset.

To consider such a large retail-led development at a time when both retail and cinema were in decline can only be described as insanity. The critical cinema chain element of the scheme collapsed into administration back in July.

Considering Macclesfield’s own disastrous venture into redevelopment (courtesy of the same suspects) and the abject failure of Stockport’s £ multi million expenditure to halt its decline, one would hope that Cheshire East had learned a lesson – it appears not.

Alternative proposals will now have to be drawn up for the second phase – which could involve a temporary – and very expensive – park on the site.

Councillor Nick Mannion, vice chair of Cheshire East Council’s economy and growth committee, said: “In October 2020, the council entered into a development agreement to deliver the Royal Arcade scheme in two stages, with the leisure-led part due to get underway once the new bus station and multi-storey car park had been completed.

“Three years ago, that was fully viable. But across the UK, the viability of commercial-led leisure and retail developments is being met with challenge after challenge, not least double-digit inflation in construction costs, increases in interest rates, the cost-of-living crisis, and a decline in town centre investment values by some 20-25% over the past two years. These challenges, which remain, were not foreseen, and there were major rises in costs over a very short period.”

Cheshire East Council entered into an agreement with Peveril Securities for a two-phase scheme in the town centre in 2020.

The local authority bought the site in 2015 and work began last year.

The first phase includes a new bus station and a multi-storey car park, which was set to be completed by spring 2024.

Even as the multi-storey car park is under construction the apparently dysfunctional Cheshire East Council were also pursuing a number of ‘green’ initiatives – aimed at encouraging pedestrians and cyclists at a cost of reducing accessibility for cars.

The new report said the council now needed to consider different options for the site because of “viability challenges”.

Four options are being considered:

• Continue with the scheme but look for other public-sector funding
• Grant an extension to the existing contract with the developer to allow the market to settle
• Scrap the agreement with the developer and consider a smaller or alternative scheme
• Scrap the agreement and seek temporary uses for the site – which could include a park, flexible leisure space and medium-term commercial space

It is this fourth, temporary option that the council is focusing on.

In the report, council officers said there was leisure sector interest, but that the increase in construction and interest rates had “adversely affected the cost”.

They added that terminating the agreement with the developer would “render unlikely” any similar development on the site in the next five years.

The plans will be discussed by the council’s economy and growth committee on 14 November.

The profligacy of Cheshire East appears to know no bounds – then again it’s not the councillors money they’re spending is it? It’s ours!