Question marks over another Northampton Borough Council deal

Seven years after a deal with Northampton Borough Council, shoe firm Church's has still not started work on developing the former bus depot

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By Sarah Ward

In 2014 there was a major fanfare as Northampton Borough Council bought up the First Bus depot and then sold it straight away in a back-to-back deal with Church’s shoes.

Then council leader David Mackintosh (later to become a Northampton MP and now disgraced after his part in the Cobblers loan scandal) was photographed with Church’s chief executive Stephen Etheridge outside the depot in St James’ Road and the pair spoke publicly of how the prestigious shoe company was planning to turn the former Edwardian tram depot into a manufacturing hub, creating 150 new jobs.  

But seven years later, the site remains boarded up and a planning application has not yet been submitted. The project was to form the gateway to the Northampton Waterside Enterprise Zone, but while other schemes have been started and finished (such as the innovation centre, the new university and the railway station) the bus depot remains derelict.

The council’s website (which is still active under the new West Northamptonshire Council banner) says the project is ‘on hold’.

So what’s happened to the scheme and has it, like the Cobblers scandal, cost the tax paying residents of Northampton financially?

The deal

The proposal first became public in September 2013, when the suggested acquisition went before the borough council’s cabinet for approval.

The report said the depot had been put up for sale and it had come to the council’s attention that Church’s - which operates from the site next door - were interested in buying the building. It explained an offer put in to owners First Bus by the shoe manufacturer (which it said was above the market rate) was rejected. The cabinet report outlines what happened next:

“The Council have consequently entered into direct negotiations with First and have held discussions with Homes Communities Agency, as a partner organisation, to crystallise a basis for the acquisition of the land. The Council has similarly been in detailed discussions with Church’s Shoes about the terms of a ‘back to back’ purchase and re-sale agreement. Provisional terms have recently been agreed with First and with Church’s to facilitate such a transaction.”

It goes on:

“The terms provisionally agreed with First for the acquisition of their property interest are considered to be in excess of the market value of the land for employment uses (only). This reflects First’s position that they would wish to seek offers for alternative uses.” 

The explanation in the report of why the council was getting involved with the deal was in order to boost employment in the area and it was concerned that First Bus ‘unrealistic’ ambitions for the site ‘could lead to the property becoming dormant for an extended period’. 

It said the terms of the deal ‘could lead to this Council incurring expenditure that it is not wholly recoverable from Church’s Shoes.’ It muted getting funding from regeneration agency South East Midlands Local Enterprise Partnership (SEMLEP) to meet the difference in purchase price and sale price and suggested the funding could be repaid over a number of years from a business rates uplift.

Minutes of the 18 minute cabinet meeting (which included a number of other meaty items) say that:

“Councillor Hadland as the relevant Cabinet Member submitted a report and commented that the expansion of Church’s Shoes onto the First Buses depot site was very good news for Northampton as it would allow for expansion within Northampton and within the heart of Enterprise Zone, and the creation of up to 150 new jobs.”

The cabinet (which included current councillors Brandon Eldred, Tim Hadland and Mike Hallam) voted to delegate the power to approve the terms of buy up and resale to the council’s director of regeneration, enterprise and planning, in consultation with Cllr Hadland and the council’s chief finance officer and legal officer. 

The financial details have never been made public.

NN Journal contacted Cllr Hadland and asked him whether the authority had bought the bus depot and sold it on for a loss, which the 2013 report had suggested was a possibility.

He said ‘I can’t remember’ and then became agitated. He is paid more than £16,000 a year as a councillor to carry out this important role.

This bus depot deal was made just two months after the now infamous agreement to loan Northampton Town Football Club millions to redevelop its stadium. Signed off by the cabinet, the money was never repaid and criminal investigations and recovery efforts are still ongoing. It is estimated to have cost the council and its residents up to £17m. 

Recently a public interest report by auditors KPMG criticised the Conservative cabinet for failing to robustly challenge the details of the football loan.

NN Journal also spoke to cabinet member Cllr Mike Hallam and asked for details of the bus depot deal.

He said he at the time had ‘deferred’ to the cabinet member in charge, Cllr Hadland.

NN Journal asked the West Northampton Council (which replaced Northampton Borough Council last week) how much the borough council paid for the bus depot and how much it sold it for. 

We argued it was in the public interest to disclose the information, especially if the authority had incurred a financial loss in the deal which the cabinet paper had suggested could likely happen.

After 36 hours the council was unable to provide an answer and the press officer said it was because he didn’t have the details yet.

Stalled development

According to First Bus it sold the depot to Northampton Borough Council in March 2014 (it would not say how much for) and the council then sold it on to Church’s the same month.

Church’s then chief executive Stephen Etheridge, said the transaction would secure the company’s future in St James. The iconic footwear firm was founded in the town in 1873 and was bought out by Prada in 1999.

It was initially reported that the intention was to put in a planning application that summer of 2014 and the facility could be in operation the next year.

But then nothing happened.

Graham Croucher, who is a member of the area’s residents association (and a current Labour party candidate)* has long had an interest in the site and before it was bought by the council, had wanted it to be listed as a community asset.

In September 2015 after asking questions about the building’s future, he was told in a letter by Stephen Etheridge:

“We are at the final stages of concepts of the new building ahead of submitting the planning application.

“I am very happy to call you in as the demolition, asbestos and the environmental work is virtually complete.

“This remains an exciting project for Church. We are working closely with the planners and the environment agency to ensure that we meet all of the requirements and the various surveys including energy and power, which will be completed by the end of September.”

After that correspondence Graham Croucher failed to get an answer to his calls and emails to Church’s.

Three years later in September 2018, further questions were asked at a council meeting about the project to Cllr Hadland, who was still the lead member for regeneration.

He told Liberal Democrat Cllr Brian Markham he had been in recent discussions with the company and ‘they confirmed that it remains their intention to proceed with the development in due course.’

Today Cllr Markham is disappointed with the site, which he says could have been developed for housing. He questions whether a business case was ever put to the council by Church’s.

He said:

“It was a fantasy that somehow by promoting this shoe company they would become world leaders and there would be a chance to promote and regenerate the town. But here we are seven years later and the site is still undeveloped.”

Labour Cllr Gareth Eales said he had asked the council’s leader Cllr Jonathan Nunn about the development on a number of occasions and said the answers would always be very vague.

Graham Croucher is concerned about the future of the building and he says there is lots of public interest about what will happen to it.

“The way this important building is being allowed to deteriorate without any intervention by the council is outrageous. It is important because it's our first and only electric tram depot with many original features still intact, including tramlines. 

“The 1939 building extension was at one time the largest, or one of the largest unsupported roof spans in the country. It was used to build fuselage for Lancaster Bombers during WW2. It played a massive part in developing Northampton both socially and economically.

“Church's pledged to preserve as much of it as possible, including the tram lines. 

“It is a worthy contender for preservation and is as important as any other historical building in the town in terms of the part it played in the development of the town, it is also a great looking building.”

In a statement to NN Journal, Church’s could not say when work would start.

It said:

“Church's, like all Northampton footwear companies, has in recent years experienced changes within the marketplace. These changes are in marked contrast to the period in which the site was first purchased. New government regulations, Brexit, and the unforeseen global COVID-19 pandemic have caused considerable instability within the fashion and manufacturing sector. These combined factors have caused unforeseen delays in the planned development”.