Three large regeneration schemes in Scotland are hoping to be the first to use a regeneration funding mechanism that is new to the UK
The three schemes, the £1.2bn regeneration of the former Ravenscraig steel works in North Lanarkshire the £700m Edinburgh Waterfront scheme, and the £450m Buchanan Quarter scheme in Glasgow, are to use tax increment financing (TIF). This system, which is used widely in the US, involves borrowing money to meet the upfront infrastructure costs of a scheme. The collateral for the loan is supplied by the business rates the building will generate in the future.
Neil Parlett, senior director of regeneration and development at CB Richard Ellis, said Buchanan Quarter developers Land Securities and Hendersons would start a formal consultation with Glasgow council before the summer. The scheme could generate income of £80m. Parlett said Ravenscraig was likely to be first to make a submission.
The news comes as Transport for London said it was investigating the creation of a TIF to fund the £600m planned extension of the Northern line to Nine Elms, which is required to kickstart development around Battersea.