Glasgow City Council is reviving an initiative to fund city centre street and other public realm improvements using tax increment financing (TIF).
Under TIF, councils undertake prudential borrowing to deliver infrastructure associated with new development. The borrowing is then repaid by the uplift in non-domestic rates flowing from the development.
The Scottish Government developed a TIF mechanism with the Scottish Futures Trust a decade ago. In 2012 Glasgow City Council’s TIF application was approved for a project associated with Land Securities’ redevelopment and expansion of the Buchanan Galleries shopping mall.
Included in the development was a cinema, and a new 1,500-space car park in North Hanover Street on a site owned by Network Rail, with associated retail units. The car park would replace the existing 2,000-space Buchanan Galleries car park.
The TIF mechanism was set up to deliver £80m of works, including an entrance atrium to the Royal Concert Hall; pedestrian-
isation of Dundas Street; improvements to Concert Square, George Square and Cathedral Street; the upgrade of Cathedral Street Bridge; and pedestrian linkages from the car park.
Land Securities deferred the development in 2015. One of the problems the project had encountered was a conflict with Network Rail’s separate Queen Street redevelopment plans associated with the Edinburgh-Glasgow Improvement Project.
Land Securities is now progressing a reduced Buchanan Galleries project, which will see the existing car park remain in-situ. The North Hanover Street site formerly held for the car park could be developed as an office location.
Glasgow’s chief executive, Annemarie O’Donnell, told councillors that the opportunity had now arisen to revive the TIF project. “The North Hanover Street development in conjunction with the extension of the Galleries and the new station retail, will generate significant new non-domestic rates (NDR) that will be available to fund TIF investment, including expenditure incurred to date.
“The Scottish Government is supportive of a revised Glasgow TIF business case subject to the usual eligibility criteria being met.”
She said the revised TIF business case would focus on the proposed office development. “It is anticipated that the overall TIF approval of up to £80m would be reduced to correlate with the non-domestic rate (NDR) revenue to be generated from the North Hanover Street office development.”
Projects under consideration for inclusion in the TIF mechanism include public realm improvements and connections throughout the environs of Queen Street station, and the council’s George Square improvement scheme.
“To date the council has spent £15.5m on project work, which it had anticipated would be funded from TIF, mainly in respect of the Concert Hall, Cathedral Street bridge, and George Square phase 1 (resurfacing),” said O’Donnell.
“The council’s financial planning assumes these works will be funded from TIF. In addition, it is anticipated that, under the revised TIF, a further circa £30m could be supported by estimated additional TIF NDR.”
TransportXtra is part of Landor LINKS
© 2019 TransportXtra | Landor LINKS Ltd | All Rights Reserved
Subscriptions, Magazines & Online Access Enquires
[Frequently Asked Questions]
Email: [email protected] | Tel: +44 (0) 20 7091 7959
Shop & Accounts Enquires
Email: [email protected] | Tel: +44 (0) 20 7091 7855
Advertising Sales & Recruitment Enquires
Email: [email protected] | Tel: +44 (0) 20 7091 7861
Events & Conference Enquires
Email: [email protected] | Tel: +44 (0) 20 7091 7865
Press Releases & Editorial Enquires
Email: [email protected] | Tel: +44 (0) 20 7091 7875