COUNCIL REJECTS TESCO’S MILLIONS IN PENRITH SUPERMARKET DEAL

Date: Saturday 29th December 2001

THE Tesco supermarket chain offered £4.5 million more than chosen rivals Booths to have a store on the Eden Council-owned land at the centre of the planned Southend Road redevelopment in Penrith, according to papers which were lodged in connection with a court application.

THE Tesco supermarket chain offered £4.5 million more than chosen rivals Booths to have a store on the Eden Council-owned land at the centre of the planned Southend Road redevelopment in Penrith, according to papers which were lodged in connection with a court application.

Now locally-based developers Lowther Manelli, in association with Tesco, are drawing up a new set of detailed plans they believe will emphasise their claim that the council failed to select a deliverable scheme that would produce best value for the town.

Lowther Manelli an association between Lowther Estates and architects Manning Elliott say that the selected developers, Maple Grove in association with Booths, are proposing to include up to 22 retail food and non-food shop units in addition to the supermarket so many that there would be a serious risk to the town centre through attracting main traders from existing shopping areas.

EXTRA SHOPS

Jim Lowther, of Lowther Manelli, said:” This is the consequence of having to boost the finances through accepting a lower sum for the Booths store. That many extra shops at Southend Road will do the same thing to Middlegate that The Lanes development in Carlisle did to Botchergate.”

Lowther Manelli’s scheme is for a Tesco store of 55,000 square feet (15,000 of it non-food), plus 30,000 square feet of other retail shopping space accommodation, enough for about six shops. Maple Grove’s scheme is bigger in total shopping space by 30,000 square feet, with 80,000 square feet of shop units in addition to a 35,000 square feet Booths store.

Lowther Manelli and Tesco say that although comparison between the schemes is complex and the difference between the bids of the two rival stores is moderated by the non-food element of the Tesco store, Booths’ bid was still significantly less.

Lowther Manelli claim that the attraction of a Tesco store would bring £11m worth of lost trade back to Penrith and produce £3.5 million worth of “spin off” trade for existing traders in the town centre. They intend to submit their detailed scheme to Eden Council for planning approval at the same time that the Maple Grove plan goes before the council’s planning committee, so that the merits of both can be debated at the same time.

“The Lowther Manelli scheme is smaller and would be better funded, avoiding harm to Penrith’s existing main shopping centre,” said Mr. Lowther. “It would also provide in the Southend Road location a potential solution for the soccer and other sporting demands and, because of the large amount of extra cash that the lead occupier Tesco would pay, enable the proper and fair relocation or repositioning of existing business in the Southend Road area.”

Mr. Lowther claims that if the council and Maple Grove were unable to come to financial agreements to acquire the sites of existing key landowners and resorted to compulsory purchase orders, it would be likely to drive a wedge of antagonism between the landowners and the council. “Our scheme is deliverable without having to use compulsory purchase which would disadvantage the landowners and businesses which employ significant numbers of people,” he said.

Lowther-Manelli learned of the difference in what the two rival supermarket chains were prepared to pay for a site at Southend Road as a result of making an application in March to the High Court for a judicial review of Eden’s decision to choose Maple Grove and Booths.

Lowther Manelli wanted to argue that the council had not secured “best value”, but failed to get a hearing because they made the mistake of submitting their application at the end of the allowed period without making the council aware of their intention. “The judge ruled that although we had an arguable case, we were too late in the time frame,” said Mr. Lowther. The papers submitted by both sides are now in the public domain.

“What they reveal is that the budget for the council-owned land upon which would be the site of the Booths supermarket is in the region of £2 million, compared with the figure of £6.5 million which Tesco are prepared to allocate,” said Mr. Lowther. “We say that if the two schemes are judged on a like for like basis, our bid with Tesco is significantly ahead which is why it would not require an overkill of additional shops to make up the finances.”

He said that the value of the Tesco bid would also come through in provision of facilities like the arts centre and in capital receipt or revenue stream for Eden Council. Lowther Manelli say that in the past few months they have been undertaking a consultation exercise by talking to interested parties in the Southend Road area commercial, sporting, educational, officers of Penrith Civic Society and agents acting for a doctors’ group who want a new medical centre. Only Whitbread, owners of the former Two Lions Hotel, had refused to talk.

“What has emerged is that neither the council nor Maple Grove have talked hardly at all, if at all, recently to any of these people,” said Mr. Lowther. “There seems to be a feeling of incredulity about the lack of information and involvement of the important stakeholders likely to be involved.

DISADVANTAGE

“What appears to be going on is that Maple Grove, being at a disadvantage because of what their lead tenant is prepared to pay, is unable to afford relocation at full appropriate cost to four of the key private landowners Sunlight Laundry, the Post Office, Jim Walton’s garage and Penrith Football Club. The consequence is a compromise scheme inappropriate for the site.”

Lowther Manelli say they would be able to provide Sunlight Laundry, a significant employer based in Princes Street, with a total relocation package for a new laundry a short distance away on the existing site of Jim Walton’s garage which could be provided with new premises on Gilwilly.

“Our scheme allows £1.9 million for Jim Walton’s relocation to Gilwilly whereas Maple Grove’s scheme leaves the garage in place with just £100,000 for adjustments,” said Mr. Lowther.

“The Jim Walton site is very important to the whole scheme because their land between Southend Road and Victoria Road holds the key to only access that would be adequate. We are told by the highways department that the only acceptable solution is over Jim Walton’s land because access along Southend Road is inadequate and would lead to serious congestion within five years.”

Mr. Lowther said that although the council had refused to talk directly to his company after making the decision a year ago in favour of Maple Grove, Lowther Manelli would welcome the opportunity to talk to the chief officers and the policy and resources committee about their new plans before they were formally submitted.