It was fitting such a leading Scottish Government figure as Nicola Sturgeon was on hand this week to announce the building of the long-awaited St James Quarter was finally about to start. It is a huge boost to the whole of Scotland.
Thanks to the Government, some £61m of public money will now help bridge the funding gap caused by five or so years of lost revenue as the existing shops shut and stop paying rent and rates while the new centre is under construction.
And finally the loathed New St Andrew’s House can come down. Only the misguided or deranged can mourn its demolition.
The money will be repaid from higher rates paid by the occupants of the units in the new complex who are expected to benefit from better trade in the superior environment their customers will enjoy. The site owner and developer, TIAA Henderson Real Estate, will also pay a contribution of around £4m a year.
It’s what is now known as a Regeneration Accelerator Model or RAM, which is a loan based on future rates payments. It used to be known as a TIF, or Tax Incremental Finance, which was used to fund the creation of Glasgow’s Buchanan Street Galleries and is standard practice for such developments in the United States.
What is described as an “innovative funding model” is in effect a loan. Just as your bank or building society checks to see if you can afford the re-payments, so too does the Government expect its money back. And just like a first-time buyer being happy to secure a loan which makes them a home owner, we should be similarly delighted that the Government has made it happen.
Hopefully the Government will make a return on its investment which can then be reinvested or, perish the thought, contribute to lowering our taxes. According to Ms Sturgeon earlier this week the Scottish Government “is determined to invest in Scotland’s infrastructure, both to stimulate growth in the short-term and lay the foundations for long-term success.
“Through schemes such as RAM we are increasing public investment in infrastructure across Scotland, which will create overall gains for the economy as a whole.”
I have no evidence that this is not how Ms Sturgeon honestly understands the situation, but as I understand it the deal was struck only after long and difficult negotiation, often in the teeth of opposition from government economists. What the politicians say and how the civil servants behind them act are not always the same.
In this case, the RAM deal has been the subject of months of wrangling between government officials and the developer over whether the new St James Quarter will deliver real economic benefit to Scotland as a whole.
The officials argued that such a shopping development would only result in the displacement of spending from one environment to another, fearing all it would create was a competition between Glasgow and Edinburgh in which Glasgow would lose out and the new development would not hit its targets. That doesn’t sound like the “determination to invest” Ms Sturgeon was talking about.
Obviously if ministers only listened to doom-mongering advice the deal would never have been struck and there were other voices in government circles which were able to bring their influence to bear. In particular, I’m told the Scottish Government’s investment vehicle, the Scottish Futures Trust, was supportive.
However, the role of City Council chief executive Sue Bruce was apparently crucial and it seems she is making something of a career out of bashing heads together to produce a sensible result. Maybe she, rather than Tony Blair, should be in the Middle East.
Although no sensible person in Edinburgh will shed a tear at the demolition of monstrosities on the site, what this episode once again illustrates is just how narrow-minded some people charged with delivering expert advice can be.
Edinburgh’s real market place is not just central Scotland but the rest of the UK and Europe. And if it is to maximise its potential it is the Americans and Chinese who can chose to go anywhere in the world we need to attract.
Glasgow has a conurbation of three million people from which to draw and now it has the advantage of the state-of-the-art Hydro arena it can attack the party and entertainment circuit inhabited by the likes of Newcastle, Manchester and Dublin.
The connections with the Far East in particular are growing, in part because of the further education market. Thousands of students from affluent backgrounds are pouring into the UK and will continue to do so if the UK Government stops pandering to the UKIPs of this world with counter-productive tightening of immigration rules.
These people, often paying £20,000 in fees alone for a one-year course of study, will establish connections here and will build on them in years to come. They will come back to do business and to holiday and if Edinburgh doesn’t have the right facilities they will go elsewhere, not necessarily to Glasgow.
The St James Quarter will transform Edinburgh as a shopping destination, as Buchanan Galleries did in Glasgow and Eldon Square and the Metro Centre did in Newcastle. Thank goodness the argument that Edinburgh should sit back to leave the way clear for Glasgow was rejected.
With world-renowned heritage and cultural attractions, Edinburgh should be an all-year-round destination for high net-worth visitors, especially older ones not tied into school holidays or bothered by a bit of wet weather, but with plenty of money to spend.
They need brilliant things to see, top quality places to stay and equally top quality places to spend their money. On the first count we score highly, on the second count not enough and on the third count after Harvey Nics where?
St James Quarter answers the last point if the right tenants can be found, but the right tenants will never be found if the right environment is missing. Don’t build it and they definitely won’t come.
The Scottish Government is going to look at extending the Waverley line to Carlisle but I’m wondering why this has all of a sudden leapt up our transport priorities.
This is a line which is supposed to be a major economic boost but won’t
be able to handle more than two trains an hour in or out of Edinburgh during rush hours.
Do we really need a feasibility study to work out the demand for trains between Hawick and North Cumbria?
And who is going to take the Waverley route to Carlisle from Edinburgh when the current Virgin services get you there in 70 minutes? The Borders Rail promise it will take just under an hour to get to Galashiels.
So are we to believe that the economic case for recreating the line all the way from Tweedbank to Carlisle is greater than providing a modern mass transport rail-based system from Sheriffhall to Ocean Terminal?
Given the Scottish Government has ruled out any further involvement in Edinburgh trams we must presume so.
So if we can think about reopening the line south of Tweedbank, what about the Peebles loop? All aboard the mountain bike express to Glentress.
Car park to ease congestion
Surprise, surprise, the environmental lobby is already kicking off about car parking at the new centre. Watch out for attempts to delay the project for further environmental impact studies and all that malarkey.
If you include new business opportunities, more places to live and a five-star hotel then guess what, some people will want to drive there.
So let’s spend £850m on a massive economic boost for the city and the country in which people can live as well as work, shop and play when anyone in a car tries to get there they end up driving around looking for a parking space. What will persuade people not to drive is better public transport, like the tram, avoiding the already congested streets nearby and being able to enjoy a couple of drinks in a relaxed atmosphere.
Making it difficult to park won’t decrease congestion; it will just mean more cars on the road for longer.
St James at a glance
Work on the original plan was due to be completed by next year, instead that is when it will start. Most of the building will be finished by 2019, with completion by 2021.
The new centre will feature 42,500 sq m of shopping space, a five star hotel, an apart-hotel, a theatre, offices and 138 flats.
John Lewis turned down the chance to move into new premises and will instead stay in the current building as the new centre is constructed around it.
Despite its problems, the tram was a key part of the decision to go ahead with the project, but pressure is now growing on the council to complete the line to Leith. Henderson expected to be in the middle of the line, not the end.
The development creates challenges for Ocean Terminal, where the number of empty shop units is already high, and for the West End.