Back on track
Operation New Street is well underway. Over the last 18 months some serious players have banged heads to ensure the biggest business priority in Birmingham is progressed. Jim Pendrill plots the next moves.
18 months ago Insider ran arguably its most unusual, provocative and shocking front cover. Against a suitably slate grey background we showed you a picture of one of the most depressing sights in the Midlands, namely the forlorn, neglected, sorry concrete mess of Birmingham New Street Station.
Our justification for running that picture over the headline "Enough is enough" was simple. The decrepit state of the Midlands' chief transport hub is a lamentable scandal and one that affects the business community just as much as any other community in the region. The negative perceptions conveyed by its labyrinth of concrete passageways and grim, overcrowded
platforms have done (and continue to do) untold damage to the city's image, its inward investment credentials and its wider regeneration.
The station may still be in its same sorry state today, but quite a lot else has happened since, hence our return to the story. And we're delighted to report that things are moving in the right direction at last.
In short, enough important heads have been banged together and made the
redevelopment of the station a real number one priority for both the city and the city region. It's gone beyond rhetoric too. Real action and real proposals are taking the scheme to the next stage.
Insider makes no attempt to claim sole credit for this sea change. Our voice has been one of many campaigning for movement on this issue, but we would like to think we have helped oil some wheels along the way. The credit should probably as much go to external factors - and particular successes - that have put the problems at the station even more sharply into focus.
Chief among them is the Bullring. Barely a few hundred yards away from the station, the redevelopment of the shopping centre is rightly lauded as one of the most
exceptional retail schemes the UK has ever seen. The punters are proving so too with their feet - a staggering 37 million of them a year are traipsing through its doors.
Add to that the continued success of the nearby Mailbox and throw in a series of high-profile new residential developments springing up around the station, and New Street really is becoming an island of despair within a sea of hope.
So it's little wonder that the powers-that-be decided it was time to act. As Birmingham City Council leader Mike Whitby sums up: "The station is brilliantly located within our business and retail core yet for too long has held back the pace of our plans to reinforce Birmingham as an international business centre. A revitalised New Street can be a stimulus to major new investment around the immediate area, investment that will parallel the hugely successful schemes at Brindley Place, Mailbox and Bullring."
Indeed, it's worth noting here that unlike many city centre rail stations in the UK, Birmingham's really is right in the very heart of the city. So much so that the potential uplift in land values that can be gauged from a redeveloped New Street plays strongly in the minds of those in the corridors of power.
However, before we look at what Whitby and others are now doing to take the project forward, it's worth reminding ourselves just how serious the station's problems are becoming and the context in which its redevelopment is so crucial.
Most serious is that station managers have now on several occasions closed on safety grounds entrances at certain times of the day to avoid congestion.
It isn't all the station's fault. A station that was designed to cater for 640 trains and 60,000 passengers a day is currently trying to cope with 1,350 trains and 120,000 passengers. Around 31 million people a year currently pass through the station.
As Mike Taylor, a planning officer at Birmingham City Council who has been charged with co-ordinating the operation to redevelop New Street, observes: "The inadequacy of the station has become evident with increased passenger demand, the increase in services since rail privatisation, the opening of the new Bullring and the continued regeneration of the city centre."
As our roads become ever more gridlocked, the station has seen a 43 per cent surge in passenger numbers at peak times in the last three years. Nationally, UK railways in general are carrying nearly 1 million extra passengers a week compared with last year. Britain has the fastest growing railway in Europe and yet according to official figures it is precisely regional railways that had the least investment yet fastest growth in 2004, with overall passenger numbers up 7.4 per cent.
The Railway Forum, a think tank, recently said that unless the government approved extra capacity it would have to revive the old British Rail policy of raising fares to deter passengers.
Furthermore, Railtrack once had a wish list of annual schemes to remove bottlenecks in the system but Network Rail, which replaced it two years ago, has no remit for expanding the network and focuses instead on maintaining the existing network.
Instead, the Strategic Rail Authority (SRA) was meant to take on the role of planning new capacity but it is being abolished this year with the Department of Transport preparing to assume responsibility for strategic direction.
What does all this mean? Well, very simply put, Birmingham cannot wait to rely on government support to push through its major transport schemes.
This is precisely the view that has brought so many leading figures to the negotiating table. As Sir Digby Jones, CBI director general and campaigner for the Midlands, memorably told Insider's Leaders Lunch last year: "I have come to the conclusion, after four years going on about New Street in seriously important places, that we in Birmingham have got to do this ourselves because others are constantly going to put it to the bottom of the heap."
The precedents are there to see. The ICC, Brindleyplace and the NEC all happened because Birmingham took it upon itself to make them happen.
One of those trying to make New Street happen is John Edwards, chief executive of regional development agency Advantage West Midlands (AWM), which has pledged to commit £3100m towards the station's redevelopment. "This is a once in a generation opportunity. Now is the time to deliver the scheme," he says.
As our timeline overleaf shows, some serious minds have spent the best part of five years trying to work out the shape of a future redevelopment.
Back in the summer of 2003 a scheme for the station was put together by Network Rail and the SRA. However, it had one critical flaw - it only addressed the passenger problems at the station focussing on areas such as access to platforms and improving lighting and ventilation. As Taylor remarks: "It only looked at the station in isolation. We needed something more ambitious and more regenerative. We needed something that addressed other strategic issues around the station."
There was another fundamental flaw in that original scheme - no-one had a clue how it was going to be paid for. As Edwards recalls: "We probably could have found the money from somewhere and ended up spending the £3135m. We may have solved some of the specific issues on platforms but you still would have had an awful visitor experience. The £3135m would have been wasted. With hindsight it has been a much better decision to wait and spend more on a more credible scheme."
Taylor adds: "Credit must go to council leader Sir Albert Bore who set up a steering group to take those initial plans forward. The thinking was that by being more
ambitious it would create the ability to attract more private sector funding as well as more public sector funding. It is the role of the city to pull together various interests and ensure it is a proper regeneration project rather than a railway project."
Famed architect Will Alsop was used to create that something more ambitious and he certainly delivered. The station's external appearance was transformed with an imposing glass roof to let natural light flood on to a new concourse. The internal layout was also radically changed, providing much improved arrival points to enhance passenger accessibility and facilities. Improved pedestrian access to areas beyond the station also helped promote further new commercial development. The bill was £3350m but hey, suddenly we had a scheme to talk about and one that was clearly
gathering momentum.
At the same time, no doubt swayed by the lobbying of Bore and others, a hugely significant collective decision was made by the body of West Midlands local authorities, which put sub-regional politics aside and agreed that investment in New Street should be their number one transport priority.
The decision was important because it meant that New Street could secure a healthy slice of the government's own £31bn budget towards West Midlands transport schemes over the next decade. As Taylor explains: "It is very much up to the individual authorities to decide how they want to spend this money. A consensus emerged that Birmingham is the economic driver of the region and if Birmingham's problems are solved it benefits everyone. By making New Street the priority they agreed to commit £3100m to the scheme."
Given that Transport for London, as a comparison, received £330bn over the next ten years, it shows just how far the government could have directly helped at this stage if it was minded too.
Instead it was left to other government arms to take up the reins. In particular AWM agreed to match the £3100m leaving a shortfall of circa £3150m.
How that shortfall is made up is clearly one of the big question marks currently surrounding the scheme. But many experts in the property arena believe the funding will not be as critical an issue as many believe. Much comes back to the potential uplift in land values from a redevelopment.
When present city council leader Mike Whitby announced earlier this month the new lead consultant and architect to take the project forward he revealed that a string of major developers had shown interest (though not "expressions of interest") in the redevelopment. They included Bullring developers Land Securities and Hammerson, together with other property giants Multiplex (behind the new Wembley), Grosvenor (the Duke of Westminster's group behind a huge retail scheme in Liverpool) and Bovis Lend Lease.
Their interest has been sparked by the obvious scope for major retail and residential development as part of a New Street redevelopment. As Whitby remarked: "Yes, there is a £3150m shortfall but we hope a new mixed-use scheme around the station will make the funding possible. This is something everyone believes should happen now."
Adds Edwards: "How we can help capital values be driven up by the redevelopment is a key question. The form that any joint venture will take will be particularly interesting. The business plan will be critical. We need to produce a business plan to show how we can drive the scheme forward."
Parmjit Singh, a property lawyer at Eversheds in Birmingham, has been a leading player in the city's regeneration. He sees funding as no issue. "All these developers being talked about who have shown interest are international players with strong balance sheets and strong relationships with leading banks nationally and internationally. I would be confident that they would come up with the funding if need be," he says.
Julian Shellard, regional director at
property group CBRE, agrees: "Funding will not be difficult at all. What is more important is what kind of shape the development will take and how long it will take and what kinds of funding structures will be used."
In terms of funding structures some property experts believe the council needs to approach the scheme as more of a corporate finance deal rather than a property deal where an imaginative debt structure is put in place.
Adds Singh: "Property companies are much more innovative now when it comes to putting deals together."
Whitby, a businessman in his own right, is prepared to be innovative too. "As a council we will look at a variety of options. We have awesome borrowing powers and as a city we want this to happen."
Adds Taylor: "We have tested the principles of Alsop's work and are now trying to understand how we can maximise the commercial gain on the back of that. Whoever builds this wants certainty and confidence. We need to de-risk the development as much as possible too."
If finance is not an issue, will the complex web of landholdings surrounding the station be one instead when it comes to driving the scheme forward? Much of the focus centres on land directly to the north and south of the station as well as above it and the council is widely expected to have to go down the CPO (compulsory purchase order) route to make things happen.
At present the land in question is owned by a string of people including pension funds such as Prudential and Morley, the Mall Corporation (leaseholders of the Pallasades shopping centre above the station), trusts such as the King Edwards Foundation Council and the Howard Vyse Trust, and Birmingham Alliance (the consortium of Hammerson, Lend Lease and Land Securities that owned the Bullring site). Unlike the Bullring, the council does not own any land so it can effectively play the role of broker.
Whitby is adamant that the project will not stall because of land issues. "These are clearly sensitive issues and I wouldn't want to single out anyone specific at this point. However, I will be looking into using the council's powers as appropriate. If public private partnership means anything we cannot vacillate if someone is hindering what is an essential scheme for the city. I will be looking at what powers I have and using them."
Meanwhile, the council wants to progress meaningfully on the scheme by the end of the year. Taylor admits the council is setting itself ambitious timescales but says it is an ambitious project from start to finish. "By Christmas we want to understand how and what the project is and how it will be
developed. We want to know exactly what the next steps are and want a planning application in by the end of the year, which will help with any CPO requirements."
A few other big questions remain. A big beneficiary of any redevelopment is the rail industry, but the industry has been singularly quiet so far in pledging any commitment to helping with the cost.
Another big question is how the redevelopment of the station would fit into wider transport plans for the city, in particular the planned extension to the Midlands Metro between Snow Hill and Five Ways.
Uncertainty continues to surround the proposals, specifically over whether the extension should run over or underground. As things stand, the present council is still veering towards an underground option, although most observers believe the cost will be prohibitive. Adds Edwards: "Connectivity is another very important part of the New Street jigsaw. We have to ensure people can move better between the city centre's three rail stations."
John Griffiths from GBR Properties in Birmingham is one leading voice that believes Birmingham has to go with the underground option. "With city centre land values at £310m an acre it has to make sense to go underground. Someone has got to find a solution as to how it is phased."
Big questions and big decisions required. But the momentum behind Operation New Street shows that where there's a will there does appear to be a way.
New contractor unveiled
birmingham city Council leader uses Insider event in france to announce latest New Street partner
Birmingham City Council leader Mike Whitby used an Insider debate on New Street at the MIPIM commercial property conference in Cannes, France, to officially announce that WSP had been selected as lead contractor to take forward a £33.9m design and development study of the station.
WSP is one of the UK's major multi-disciplinary consultancies with clients in both the public and private sectors. It will lead the study having teamed up with architects John McAslan & Partners and Chapman Taylor.
The study, expected to be completed by the end of this year, will look in detail at the £3350m development scheme already on the drawing board. It will assess the design work and commercially evaluate the scheme so that it can be progressed.
WSP UK director Tom Smith said: "It's a great pleasure for WSP to be associated with this prestigious project. We are looking forward to working with the multi-agency steering group to deliver an international gateway that will act as a catalyst for connectivity and regeneration in Birmingham and the Midlands."
The firm has previously worked on a string of landmark UK projects including the Jubilee Line Extension, Stansted Airport, Heathrow Terminal 5 and Bath Riverside.
Rob Donald, director general of Centro, the West Midlands Passenger Transport Executive, added: "With this appointment of WSP and their partners we should look forward to a robust and commercially viable scheme to take the project forward to the next stage as quickly as possible"
Timeline
2000
Recognising growing passenger problems at the station, the Strategic Rail Authority (SRA) and Network Rail launch £32.5m study to identify the means of improving passenger handling capacity.
2003 June
Results of study made public. Works costing circa £3135m were identified but no means of funding. Works failed to address actual redevelopment of the station and the surrounding area.
2003 Summer
A steering group formed by then city council leader Sir Albert Bore to take the project forward and to be more ambitious in outlook. Group included Birmingham City Council, Advantage West Midlands (AWM), Government office for the West Midlands (GOWM), the SRA and Network Rail. The scheme's objectives were broadened to include more of a
regeneration bent and to include redevelopment of the station's upper level retailing.
2004
A new masterplan for the station was prepared by architect Will Alsop and presented to the steering group. The estimated cost on a preliminary design was circa £3350m. Birmingham City Council agreed to secure funding to take the design forward, to establish greater cost certainty and to establish a delivery mechanism.
2005 January
A formal funding agreement was signed by Birmingham City Council and the SRA to enable a £33.9m design and development study of the station to proceed. Funding came from a variety of sources including the EU, SRA and Centro, the West Midlands public transport promoter.
2005 Spring
Work ongoing on areas such as procurement strategy, risk analysis and CPO (Compulsory Purchase Order) strategy. Council announces new contractor/architect to progress the scheme.
2005 December
Date for all design development work due to be completed and outline planning application to be submitted.
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