Leeds City Council is proposing buying two prime commercial buildings it helped bring to development as part of its innovative approach to raising income in the face of shrinking budgets while also boosting the local economy.
Senior councillors will be asked later this month to agree a proposal to invest in two key recently developed sites that come with some strong existing tenants.
The council’s executive board will receive a report from officers on June 22 recommending buying 3 Sovereign Square in the city centre and Building 1, Logic Leeds in the Leeds City Region Enterprise Zone.
They will hear that substantial rental income from tenants already on board- a national law firm as the main occupier at Sovereign Square and a lease with a national company at Logic Leeds- would exceed the borrowing costs.
It is all part of the council’s ongoing policy to act as a catalyst in Leeds’ economic recovery by intervening proactively to stimulate growth. It has been kick-starting development and regeneration projects, supporting businesses to grow and invest and helping produce jobs.
Examples of this include building the first direct Arena; using local authority powers to assemble land for the Victoria Gate and Trinity retail and leisure schemes; freeing former council car park land for the Sovereign Street development and adjacent public green space and readying land in the enterprise zone for manufacturing and logistics.
The two proposed purchases are also strategically located to help the council further plans to develop the South Bank- the largest regeneration opportunity in Europe- and grow the enterprise zone.
Councillor Richard Lewis, executive member for regeneration, transport and planning, said:
“We’re absolutely determined to drive Leeds towards having a strong economy while being a compassionate city that embraces opportunity for all. Our proactive approach to economic development underpinned by wise asset investment and management enables the council to be a real catalyst in stimulating the local economy.
“It has enabled us to play a pivotal role in Leeds’ economic resurgence, working closely in partnership with a resilient and innovative private sector. These two investments should further cement that approach.”
Other recent economic interventions driven by the council include investing in a new railway station at Kirkstall Forge, which has helped enable the bringing forward of a major brownfield development project with 1,000 new homes. Council grants have also been made to businesses that have levered in private investment and created new jobs and to land owners for site reclamation in the enterprise zone.
If councillors agree the proposed purchases it is at a time when there is the opportunity to fix long-term borrowing at significantly low interest rates. The buildings are expected to fit well into a property portfolio alongside other major key investments, such as the arena, the redeveloped Merrion House, held jointly with Town Centre Securities PLC and the Harper Street (markets) multi-storey car park.
Notes to editors:
The building at 3 Sovereign Square provides over 80,000 sq ft of Grade ‘A’ workspace as well as 10,000 sq ft of retail and leisure space in the heart of Leeds City Centre and is set to complete later this year. Building 1 at Logic Leeds was completed earlier this year and provides 80,000 sq ft of employment space, located next to junction 45 of the M1 Motorway.