Author Topic: The £11m Parking Gamble  (Read 5192 times)

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Offline Bogomil

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The £11m Parking Gamble
« on: June 10, 2010, 01:40:11 PM »
Alongside the gamble to increase town centre usage by reducing car parking fees last nights cabinet also approved the borrowing of £11m towards the potential £14.75m needed purchase the land for car parking in the first phase of the Union Square development.

The report said the development wouldn’t go ahead without this commit but offers no guarantees that it will fully go ahead with it.

Quote
2.35 of the report
“The Council has separately been approached by MUSE Developments in respect of taking a lease on the new car park. The car park and its financing would be instrumental in kick starting the Union Square development, being a key element of Phase 1. It is clear that if the Council is unable to take up an option on the car park, the development would remain unviable in the current market. MUSE have indicated that they would mothball the project and unless there is a significant improvement in the economic situation, there would be unlikely to be any redevelopment for the foreseeable future. It is clear to the Council and its partners in the development agreement, South West Regional Development Agency and the Homes and Communities Agency (HCA),that ensuring rapid progress on Union Square is vital if there is to be any hope of commencing significant regeneration of the town centre in the next couple of years.

The report also highlights that it would take 10 years to reach a break even point for the borrowed £11m.

Rather worryingly the report goes on..
Quote
2.40 of the report
It is clear that whether or not the car park in the Union Square development is owned or operated by the Council or an external agent of MUSE, SBC will need to reduce its current car parking capacity and costs to mitigate some of the additional burden on the Council’s finances when the new car park opens. An allowance for reduced costs underpins the financial model in Appendix 3, although the actual level of savings that can be achieved is dependent on which current car parks are decommissioned.
In order that the options can be considered at an early stage, it is recommended that a consultation process should commence in the coming months with a wide range of stakeholders on the future car park provision within Swindon, to inform the Council’s decision on which car parks should be de-commissioned. The Council is in discussion with MUSE to ascertain whether they are willing to underwrite the estimated costs of decommissioning, which may be in the order of £250k, again subject to which car parks are to be taken out of operation.

At a time when car parking revenue for the council is steadily decreasing year on year has Tory run Swindon council gone too far in their gambling with taxpayers money?



Offline NothingCleverOrFunny

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Re: The £11m Parking Gamble
« Reply #1 on: June 10, 2010, 03:55:53 PM »
Having read the full report on the council website, I had the impression that the £11m would be a grant from the HCA with additional funding (c.£3m) coming from council reserves? The report does acknowledge that any grant from the HCA is subject to budget cuts in the emergency budget of June 22nd.

I don't think the concil are proposing to take out an £11m commercial loan?

My personal feeling is that the council should do whatever required (within reason clearly) to get Union Square started. The report states that MUSE have had a lot of firm interest in the office phases of the scheme, which in the longer term, will incease business rates rcvd by the council, and could* increase spend in the town centre from prosective workers in these new offices.

Having read the report, it seemed a very complicated issue to me. I would certainly like to see all those White hoardingz gone from the town centre!!

Offline Bogomil

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Re: The £11m Parking Gamble
« Reply #2 on: June 10, 2010, 06:14:56 PM »
I don't think the concil are proposing to take out an £11m commercial loan?

Re-read recommendation 7

Quote
Subject to satisfactory agreement being reached with MUSE Developments Ltd, approve capital expenditure of up to £14.75m, funded as detailed in the report including new prudential borrowing of £11m, on the basis that the impact on the Councils revenue budget is estimated to be broadly break even over a 10 year period.

And the Risk Management Section - Funding on page 104

Quote
Based on the current assumed build cost, which will
be subject to further scrutiny as the design and specification are completed, a sum
of around £11m will need to be funded from borrowing to secure the purchase.

I still think this is borrowing the £11m although some of it is for allegedly affordable housing

Offline Richard Symonds

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Re: The £11m Parking Gamble
« Reply #3 on: June 10, 2010, 06:38:23 PM »
Can this Council afford to borrow £11m?
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Offline Tea Boy

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Re: The £11m Parking Gamble
« Reply #4 on: June 10, 2010, 07:58:54 PM »
Easy, cut £11 milion in services to fund it
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Offline Muggins

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Re: The £11m Parking Gamble
« Reply #5 on: June 11, 2010, 09:02:00 AM »
and they are not going to rethink it despite the £1,000,000 cut to their budget this morning.
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Offline Ringer

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Re: The £11m Parking Gamble
« Reply #6 on: June 11, 2010, 09:12:16 AM »
Easy, cut £11 milion in services to fund it

Tea Boy making a cut in revenue services of that amount would not help the provision. 11 million is a capital spending project so it could come from the sale of assets, such as redundant buildings for example, or from within the council's capital reserves. As you know the interest on 11 million simply put, mean that the income from the interest gained on money in the reserves would not be used by the council to balance the books. Any loss of interest (income) would eventually filter through the system and impact on the level of council tax levied.

Borrowing 11 million could have the reverse of that impact for example only paying the interest on the 11 million loan could stoke up council tax levels. 1% of council is about £600K, borrowing 11 million and paying it back over 10 years is just over a million quid a year possibly based on 850 car park spaces? Each car park space brings in above £600 a year I believe? I may be a little rusty on the figures as its a few years ago since I last looked into this budget, but parking is I believe around a £6 million a year operation.

Is it a gamble or a risk? A risk if it is done as a back to back deal, but a gamble if it is bought speculatively. I am minded that there will be much discussion especially after each penny will have to be watched carefully now that the Government is sything through this council's grant cutting it by some £1.4 million.  :'(

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Offline Richard Symonds

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Re: The £11m Parking Gamble
« Reply #7 on: June 11, 2010, 10:08:26 AM »
Easy, cut £11 milion in services to fund it

Need to add another mill to that this morning TB!
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Offline PAV

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Re: The £11m Parking Gamble
« Reply #8 on: June 11, 2010, 11:59:26 AM »
What land is being purchased for £14.75m?

Offline Mart

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Re: The £11m Parking Gamble
« Reply #9 on: June 11, 2010, 08:27:10 PM »
My garden.

Going to build a house. I see no problem.
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Offline komadori

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Re: The £11m Parking Gamble
« Reply #10 on: June 13, 2010, 05:00:57 PM »
What land is being purchased for £14.75m?
Don't think the council are buying any land - they already own the land (it was acquired by SBC or the other 'partners' in the then New Swindon Company as part of putting together the land for the Union Square development). They are buying the car park that will be built on their land.
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Offline Mart

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Re: The £11m Parking Gamble
« Reply #11 on: June 13, 2010, 08:22:22 PM »
Oh bugger.
Sometimes I think you have to march right in and demand your rights, even if you don’t know what your rights are, or who the person is you’re talking to. Then, on the way out, slam the door.

Offline Bogomil

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Re: The £11m Parking Gamble
« Reply #12 on: June 13, 2010, 09:29:39 PM »
What land is being purchased for £14.75m?
Don't think the council are buying any land - they already own the land (it was acquired by SBC or the other 'partners' in the then New Swindon Company as part of putting together the land for the Union Square development). They are buying the car park that will be built on their land.

Buy another car park and then de-commission others because there will be too many car parks.

Intelligent thinking there then

Rather worryingly the report goes on..
Quote
2.40 of the report
It is clear that whether or not the car park in the Union Square development is owned or operated by the Council or an external agent of MUSE, SBC will need to reduce its current car parking capacity and costs to mitigate some of the additional burden on the Council’s finances when the new car park opens. An allowance for reduced costs underpins the financial model in Appendix 3, although the actual level of savings that can be achieved is dependent on which current car parks are decommissioned.
In order that the options can be considered at an early stage, it is recommended that a consultation process should commence in the coming months with a wide range of stakeholders on the future car park provision within Swindon, to inform the Council’s decision on which car parks should be de-commissioned. The Council is in discussion with MUSE to ascertain whether they are willing to underwrite the estimated costs of decommissioning, which may be in the order of £250k, again subject to which car parks are to be taken out of operation.

At a time when car parking revenue for the council is steadily decreasing year on year has Tory run Swindon council gone too far in their gambling with taxpayers money?

Offline komadori

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Re: The £11m Parking Gamble
« Reply #13 on: June 13, 2010, 11:19:57 PM »
In the Central Area Action Plan, I thought that some of the existing multi-storey car parks were planned for decommissioning anyway, in part because of their age, and in part because changes to traffic flows (aimed at reducing through traffic across the town centre) would make some rather useless.
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Offline Terry Reynolds

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Re: The £11m Parking Gamble
« Reply #14 on: June 14, 2010, 07:35:41 AM »
Isn't the one by the bus station, in the plan to come down as part of the revamp of that area, so that will be one gone, and then you have the one in Grenville street which will stump the town for parking slots..

Offline Alex

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Re: The £11m Parking Gamble
« Reply #15 on: June 14, 2010, 10:20:25 AM »
In the Central Area Action Plan, I thought that some of the existing multi-storey car parks were planned for decommissioning anyway, in part because of their age, and in part because changes to traffic flows (aimed at reducing through traffic across the town centre) would make some rather useless.

I wonder if thats also to make way for the canal ?

Offline Bogomil

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Re: The £11m Parking Gamble
« Reply #16 on: June 14, 2010, 11:15:50 AM »
They’re moving the doctors.  I wonder if they will also move the bus station too? Might make sense to move it next to the railway station.

Thats a mighty large bit of land to develop new upmarket houses and apartments on so that the Bluh & Co can at last get a Tory elected in Central ward.