North West-based developer’s joint venture with Places for People paves way for completion of phase 1 of Stirling Prize-shortlisted refurb
Places for People, one of the largest regeneration companies in the UK, is set to form a joint venture with Urban Splash to complete phase one of Stirling Prize-shortlisted Park Hill in Sheffield.
The news follows last week’s shock asset sale of Urban Splash’s property portfolio and corporate restructure. The North West-based regeneration specialist sold 654 of its flats to Places for People in a deal worth £77 million.
Although the Park Hill overhaul, designed by Hawkins\Brown and Studio Egret West, was not part of the agreement, the AJ understands that the newly debt-free Urban Splash will be supported by Places for People to fund the fit-out of flanks B and C of the Sheffield regeneration scheme’s first phase. It is also understood that Places for People is the purchaser of last resort on Park Hill’s flats in the event of market failure.
The Homes and Communities Agency (HCA), which has already pumped £23 million into Park Hill’s overhaul, said it was working with the local council and Places for People to guarantee the remaining flats in the first phase were completed.
An HCA spokesman said: ‘Sheffield City Council is seeking to put in place arrangements to ensure that Urban Splash, supported by Places for People, completes the remainder of phase 1. The redevelopment of the first phase of Park Hill benefits from the fact that all structural and enveloping work is completed and all that remains is to fit out the interior of the apartments.’
An Urban Splash spokeswoman added: ‘We’re still discussing funding for Park Hill’s next phase with the HCA, Sheffield Council and our other partners and will make an announcement when we are in a position to update people.’
The Park Hill overhaul, an ambitious attempt to reinvent the 1960s ‘streets in the sky’ scheme, has been rumbling on for nearly a decade. So far 78 homes have been sold, two commercial units occupied and a lease on a third is under negotiation.
However, progress on the multiphase scheme has recently faltered and concerns were raised about future stages after Urban Splash posted pre-tax losses of £15.4 million for the year to 31 March 2012 in January (AJ 03.01.13).
Asked whether he thought the remainder of Park Hill would be built out, former Urban Splash director Nick Johnson said: ‘It will. But who, how and when remain the issues. The HCA and all the partners have a lot riding on this project … and Urban Splash has given profile and gravitas to the scheme.’
The local authority remains committed to the scheme, having approved £548,000 in funding for relocation of residents (phase 5) in its capital investment programme for 2013-2014. However, there is no schedule for phases 2-5 of the scheme.
The deal with Places for People transfers completed schemes in Bradford, Leeds, Stalybridge and Bristol, as well as Will Alsop’s Chips apartment block in Manchester, to the not-for-dividend organisation. Urban Splash has been retained as property managers for the sold portfolio. However, the developer’s future sites, including the Ancoats Dispensary and the plot formerly earmarked for the Tutti Frutti homes at New Islington, both in Manchester, will not be transferred. Urban Splash chairman and co-founder Tom Bloxham said: ‘The sale of this portfolio marks a significant turning point. The funding from it will be used to reduce debt, while our corporate restructure will allow us to undertake future development projects.’
The developer’s corporate overhaul will see the creation of a new holding company, called Urban Splash Holdings Limited, and a new management company, Urban Splash Management Limited, as well as a number of new asset-holding subsidiaries.
According to Bloxham, the new management company and the asset-holding companies ‘are entirely free from bank debt and will be the entities via which Urban Splash will undertake new projects going forward; both on their own and in joint venture partnerships’.
He concluded: ‘It has been a tough five years [but] we are pleased we have now been able to undertake a restructure and place individual properties and relevant debt into new legal entities.
‘This restructure, sale of the residential portfolio and setting-up of a sales and management agreement with Places for People signal the start of a new beginning for us.’
David Morley, who is working on schemes for Urban Splash including penthouses at Manningham Mills and East Wharf in Somerset, hailed the sale as good news for architects. He said: ‘David Morley Architects has been working with Urban Splash for many years and has been inspired by its approach to urban regeneration.
‘It has made exciting things happen where others have dared not, and we hope the sale of part of its portfolio will enable it to create even more outstanding development projects.
‘We think of Urban Splash as a client who allows us to do our best work, and we look forward to future opportunities to work with it.’