Council's £3m loan to shopping centre owners to be decided tonight

The loan is part of the council's regeneration plans

By Sarah Ward

West Northamptonshire Council’s proposal to loan £3m to a shopping centre owner is set to be approved today.

The authority’s Conservative cabinet is recommended to agree the scheme, which will help Grosvenor Centre owners Evolve move the H&M store into the centre along with a new shared office development. The authority will also provide an additional £375,000 to go towards the capital costs of converting part of the shopping centre’s first floor into micro shops.

It is the latest multi million pound expense the authority is incurring following its recent buy up of the former cornmarket hall. This will form part of the Greyfriars regeneration scheme the authority has entered into in partnership with English Cities Fund (ECF), which will see the area, which was largely constructed in the 1970s, completed remodelled with new parks and amenities.

However as yet ECF has not appeared before any public meeting with the local authority and just how much the redevelopment will cost the authority has not been finalised.

Artist impression of Greyfriars.

Justifying its loan to the shopping centre owners, a report that will be considered by the cabinet says:

“Town centres across the UK are struggling, as changes in shopping patterns and lifestyles undermine their previous roles. In order to create sustainable and inviting centres councils are needing to look at new and innovative ways, working with business to secure long term regeneration. In this context, the Council has engaged with Evolve, the owners of the Grosvenor Centre in central Northampton, to put together a series of deals which benefit both parties whilst supporting the Council’s vision for the regeneration of Northampton town centre.

“ . . . . . the benefits to Northampton town centre from retaining H&M, in a newly fitted unit, the introduction of the Wizu offices, the micro-shops, and the activation of the vacant Sainsbury’s unit are all worthy of note. Each would make a material positive impact on the town centre, drawing in people and spending power, helping to make it a more vibrant and active place”

The council will borrow the £3m its is loaning to Evolve.

The report says:

“The main risk in the proposals is the potential future risk of a loss, in whole or part, of the up to £3 million to be loaned to Evolve. Initial due diligence has been done and whilst a reasonably low risk, in that the legal entity to which the money would be loaned holds the Grosvenor Centre lease, and thus it is unlikely to be allowed to fail by its parent companies, the position would be further reinforced with a parent company guarantee from a suitable group company. The loans would not be entered into until further due diligence is carried out and adequate security for our investment is obtained.”

The loan tonight is accompanied by a number of other deals involving navigation through what is again a complicated lease structure.

Evolve has the shopping centre on a long lease (of more than 950 years), which had formerly been granted to Postel Properties Ltd by the former Northampton Borough Council in 1992. Belgrave House is part of the Grosvenor Centre lease and in 2021 the council took out a sublease, on Belgrave House, so that its housing company Northamptonshire Partnership Homes could develop it into accommodation for key workers. However the sub lease restricts the use, and the housing scheme has now been aborted, after proving too costly.

The authority has now negotiated to change the lease, so it can modify it as it wants to, although with a clause to not compete with sales. The Greyfriars scheme currently has the Belgrave House building identified for office space.

Another part of the Grosvenor scheme will include changing the former Sainsbury’s space into a gym with 180 car parking spaces with two hours free parking. Solar energy equipment could also be installed on the Grosvenor centre car park.

The meeting is being held at 6pm tonight and also on the agenda is a private discussion of property holdings at Catesby Tunnel - no more detail has been provided.