Cornwall Council to plough extra £10m into Pydar development

There was shock last week when it became clear that the council needs to provide the extra millions of capital to cover the project’s costs over the next two years following a number of unexpected factors.

The development – one of the biggest in Cornwall – would see 300 new homes, space for 400 students, cafés, restaurants, nature trails, a hotel and other leisure, hospitality and cultural facilities built on the site of the former Carrick District Council offices.

How part of the new Falmouth University campus at Truro's Pydar could look (Image: LDR)

There are also plans to create a hub for creative industries with Falmouth University, bringing more young businesses and students into the heart of the city.

Cllr Louis Gardner, the council’s portfolio holder for economy, told fellow Cabinet members: “The Pydar development has huge potential to become a unique mixed use neighbourhood and a catalyst for transformation in Truro.

The scheme is incredibly important for Truro’s declining town centre, which is in urgent need of intervention.

“Without intervention this decline will continue and we risk losing key tenants within our city centre and therefore the delivery of Pydar – alongside the £23.6m of Government funding which has been distributed in Truro through the Town Deal fund – is essential in supporting Truro and Cornwall’s economy.”

He said the total net revenue of the project equates to £261m over 40 years with a further £251m of economic benefits: “Pydar is now at a critical stage and an injection of funds is required to move forward at pace and prevent economic stagnation.

"The ask of £10m of funding over the next two years will enable the project to move forward while we complete the private financing deal to fund the whole development.”

The council’s portfolio holder for housing, Cllr Olly Monk, agreed: “The consequences of not doing this after all the work that’s gone into it are unthinkable.”

The council’s deputy leader and its portfolio holder for resources, Cllr David Harris, explained why the urgent cash injection is needed for Pydar, where work has stopped following the demolition of the multi-storey Viaduct Car Park and a number of buildings, including the former Carrick District Council offices.

He said: “In short, this is a request for more money to progress this project which was first mooted by a previous administration as far back as November 2017, with the appointment of Treveth to carry the project forward being made in December 2019, by which time over £6m had already been committed to the project, with a total spend on the project to date being £8m.

“This was at the time a bold move and remains so today. Progress has been significantly affected by a number of factors, including the pandemic, high interest rates and very large increases in building costs.

The latest gremlin was the impact of the Building Safety Act, which placed additional requirements on buildings over 18 metres high, which was a sudden change from the previous 30-metre guidance and obviously now requires significant redesign.”

The Pydar scheme was predicated on being privately financed, although it is being developed by Treveth, Cornwall Council’s in-house building company.

Cllr Harris said a potential private lender has been identified which had agreed in principle to provide the required funding. “However, a lot of the terms of this have not been hammered out so we don’t know what to put in a finance model in terms of minimum and maximum borrowings and facility fees. We need clarity sooner rather than later in order that we can build a financial model. The longer something takes, the more issues can arise.

“I will be frank and say I was somewhat dismayed that halfway through this report process, a brand new piece on infrastructure has appeared in relation to getting a new electric substation at Shortlanesend to power the thing. It now has to be completed with council funds because of the two- to three-year lead time for the substation to be completed.”

The deputy leader added: “So all my grumbles aside, I think that Pydar can, is and will be a good thing for Truro and Cornwall, but I will add a word of caution – expenditure of this money can only take place in consultation with the portfolio holder for resources … me.

"I will not be nodding this expenditure through until I have seen a decent finance model which doesn’t leave a host of unanswered questions.”

The £10m funding over two years will deliver the following: design work, planning process/application and procurement of contractors to deliver the gateway and St Clement Street frontage continued market negotiations and pre-lets with interested tenants a “context of commitment to delivery” to allow Homes England negotiations.

Homes England at a regional level has cited three schemes across the South West as its current regeneration priorities, one in Bristol, one in Plymouth and the Pydar scheme.

review of wider delivery strategy and a positive context for negotiations with university partners implementation of the new Building Safety Act requirements on existing reserved matters approval for consented blocks and the wider masterplan legal and procurement fees to enable the progression of the private finance deal for decision to approve demolition and archaeology works to the remaining assets to remove the financial liabilities these buildings currently incur on the council surveys and other enabling and infrastructure work ahead of contractor appointment.

This includes placing orders for the new electrical connection from Shortlanesend Sub Station and other service diversions in preparation for Pydar Street and St Clement Street road works.