Research obtained under the Freedom of Information Act casts doubt over £1bn Birmingham redevelopment.
A report into the £1bn redevelopment of Paradise Circus an the Central library site in Birmingham has cast doubts on the feasibility of the project, the Birmingham Post has revealed.
Jones Lang LaSalle and Gardiner and Theobald, which were appointed by Birmingham City Council, submitted the results of their research in February 2003. The 32-page report, obtained by the newspaper under the Freedom of Information Act, stated, “We have significant doubts as to whether it will be possible to obtain private sector finance for the project and transfer risk relating to upfront expenditure and ongoing development to the private sector.”
The consultants added that the scheme would be in deficit if the initial expenditure were to rise by 10% or projected land receipts fall by 10%.
They said: “Given the nature of the project, there would be a large reliance on developer equity to fund upfront costs rather than debt finance. These upfront costs are very substantial due to the specific technical constraints, for instance building over the Queensway Tunnel, and the need for extensive demolitions and third party land acquisitions.”
Tory cabinet regeneration spokesman Ken Hardeman, who came into office in June 2004, said that he was unaware of the existence of the document and dismissed its findings.
The council is working with development partner Argent on possibilities for the Paradise Circus and the library site, which should be made public soon.