Liverpool Council has defended the performance of a major development in the city centre suffering from a lack of investment.
It was revealed last week how despite the local authority pouring more than £144m into Paddington Village, almost half of the Spine office tower building remains vacant and the wider project is “currently underperforming.”
Members of the city council cabinet came out in defence of the scheme as it looked to reform how it brings in vital cash.
Cllr Nick Small, cabinet member for growth and economy, said Paddington Village represented a “real success story” for Liverpool’s business development.
Paddington Village is a major development project within the Knowledge Quarter, with Paddington Central – where the Spine, car park and Novotel hotel are situated – marking the first phase of the scheme. Since opening in May 2021, the Spine has occupied eight of its 14 floors, with the Royal College of Physicians as anchor tenant.
A report before the cabinet detailed how against associated borrowing costs, investment by Liverpool Council is “currently underperforming with a lack of income being the main reason.” It said the scheme represents a “significant” investment that has been impacted by both the pandemic and the broader economy.
In March and July last year, a 1,249-space car park and 221-bed Novotel also opened on site. The city documents said it was vital a strategy was worked up to lease out vacant floors to increase income and value of the Spine.
Liverpool Council is currently covering the apportioned operating costs relating to service charge and insurance while these floors remain empty. Addressing the cabinet meeting on Tuesday, Cllr Small said: “It’s a real success story that people don’t really know about yet because it’s all new. I’ve been completely blown away by what’s going on there.”
Cllr Small added how the Spine is allowing Liverpool businesses to expand as well as bringing new investment into the city “in a way that is inclusive.”
Among the proposals agreed by the cabinet include using existing Spine budgets to fit out three floors of the building, leasing of floors to Sciontec who would operate flexible workspace and changes to car park contract pricing. General feedback from property agents detailed how the previous draft pricing structure was too high compared to other established city centre car parks, particularly when trying to use parking as an incentive to secure tenants in the Spine.
It is expected it would take at least three years for the car park to reach full demand, as such there is the opportunity to agree bulk contract parking arrangements in the short to medium term to boost car park income. Council leader Liam Robinson said the village represents an “important location and asset to the city.”
Documents considered by the cabinet said should action not be taken, the “downside scenario would cause the whole development to stall and require higher levels of revenue contribution from Liverpool Council to support not just the office space but other council-owned buildings due to lower demand.”