A test of Sheffield's mettle

Crane spotters could have a field day in Sheffield. More are visible in the city centre today than have been seen for several decades, and most of these are at work bringing back housing to the heart of the city. There are more than 1000 dwellings under construction in the centre, according to recent research by property consultant Knight Frank. Other even more ambitious development plans have recently been unveiled – a £300m retail quarter, a £100m advanced technology business park called E-campus, and a £20m yuppie enclave containing a four-star hotel, luxury flats, fine restaurants and a health centre, all converted out of a pair of Victorian grammar schools.

To stimulate and steer these developments, Sheffield boasts one of the UK's three trailblazing urban regeneration companies, Sheffield One, as recommended by Lord Rogers' urban taskforce in its Towards an Urban Renaissance report. Now in the second year of its 10-year programme, Sheffield One is unveiling building projects first outlined in a masterplan completed in February 2001 by American urban design consultant Koetter Kim.

All the signs are that Sheffield city centre is following in the acclaimed regeneration footsteps of northern cities such as Manchester, Leeds and Newcastle. Nobody doubts that radical regeneration is crucial for Sheffield to create a sustainable modern economy after the collapse of the steel industry in the mid-1980s, which has left unemployment hovering at 8-9%.

In order to meet this need, Sheffield One has prioritised six regeneration projects for the city centre alone. These could cost up to £600m, according to the company's director of projects, Andy Topley. He calculates that, between 2001 and 2008, about £100m of public funding has been earmarked for the area from the European Union's Objective One renewal fund, the DTLR's single regeneration budget, the local transport plan and lottery funds.

But a more pessimistic note is sounded by Gwyn Rowley of Sheffield University's geography department, who dismisses Sheffield One as "a lot of huff and puff". He argues that Sheffield is afflicted by a deeper economic malaise than Manchester, Leeds and Newcastle and that this could mean that the current line-up of development proposals fail to deliver economic prosperity. For a start, he points out, despite being England's fifth largest city with a population of nearly 500,000, Sheffield has never had the employment-generating status of a regional centre. Second, the giant 1980s Meadowhall shopping centre in the Don Valley has established a region-wide clientele of up to 10 million shoppers, who would have little incentive to visit Sheffield city centre even if its shopping was regenerated. Third, despite the supertram system, Sheffield lies off primary rail and road routes, and its transport network is poorly integrated. Finally, Rowley questions how new city centre offices, shops and bars are supposed to benefit Sheffield's poorest communities in the east, where unemployment has risen to 22%, shops have closed down and education is substandard.

Sheffield has had its share of regeneration initiatives before. In the 1980s, an urban development corporation and enterprise zone were set up to redevelop the redundant steelworks in the adjacent Don Valley. In 1991, it staged the World Student Games, for which it built the Don Valley Stadium, Ponds Forge swimming complex and other sports facilities. In 1995, it secured lottery funding for the £15m National Centre for Popular Music.

The Sheffield Development Corporation may have replaced heavy steelworks with light industry and warehousing, but these provided relatively little employment, argues Rowley. The World Student Games left the city some £5m in the red, and the pop music centre bombed spectacularly in 2000 within a year of opening – it is currently less than half occupied as a rock venue while a business plan is being prepared for a new use.

So what is different this time round? Well, unlike the development corporation, which was "sent like an army of stormtroopers into a foreign country", according to Simon Ogden, the council's chief city-centre planner. By contrast, Sheffield One is by all accounts a smoothly co-ordinated partnership between the council, regional development agency Yorkshire Forward and English Partnerships. "I've never known a time when all the agencies in Sheffield are so committed to working together," says Topley, who worked for the old development corporation.

Also, Sheffield One is pursuing a mixed-use, high-density, urban regeneration policy that accords closely with Lord Roger's urban renaissance agenda. In contrast with Meadowhall, Sheffield One concentrates regeneration in the heart of the city and avoids putting all its investment eggs in one large single-use basket. Both of these suggest a higher level of sustainability than previous initiatives.

The main challenges ahead, according to Topley, are to solve complex matters of land assembly in the city centre to make way for the proposed retail quarter. "Land ownership is very fragmented, with scores of freeholders," he says. "At first we are trying to purchase by negotiation, with compulsory purchase orders following on after planning approval, which should be spring next year. There's a huge amount of paperwork involved in the land assembly, and it doesn't sit happily with the funding regimes, such as Objective One, which runs out in six years, and the single regeneration budget."

"There's also great complexity in the funding regimes themselves," he continues. "At times it all seems too complex and at odds with our regeneration timetable."

Even more complications have been introduced by English Heritage and CABE, which at a meeting last month, persuaded Sheffield One and the city council to base their regeneration plans on the conservation of its "steel city" heritage. This strategy involves "a landscape characterisation study", the first stage of which was the publication last December of a 54-page book on the buildings of the Sheffield metal trades. "The next stage is to decide whether to extend the conservation area, which covers most of central Sheffield, and whether to list more buildings on a thematic basis," says David Fraser, director of EH's northern region. As an incentive, EH and the Heritage Lottery Fund have offered conservation grants worth more than £2m.

All these bureaucratic hurdles to development in Sheffield city centre have put off contractor Taylor Woodrow, which headed the consortium for the £51m first phase the Heart of the City PFI (see "Sheffield One's big six", page 33) completed last year but has not hung around for the second phase.

Other developers and housebuilders have taken a more optimistic view. They include such big-time property developers as Hammerson for the retail quarter, Teesland/GMIR joint venture for the E-campus, and Ask Developments of Manchester for the Leopold Street development. National housebuilders, such as Persimmon, Wilson Bowden, Bellway and Gleeson Homes, are also investing in sizeable new schemes in the area.

Not surprisingly, national contractor Gleeson is streets ahead in its home city. "We have three contracts worth £50m in total for residential projects on a single half-mile stretch of West Street alone," says the northern construction division's business development director, David Jones. "We are seeing very strong potential growth for the city centre."

No doubt to the delight of the crane spotter out there.