‘High risk’ movie project worth £200m a year

A £70m plan to create a TV and film complex in Liverpool is high risk, a council report admits, but it adds it has the potential to boost the city region economy by £200m a year. Tony McDonough reports

CGI of how the Littlewoods TV and film complex will look

 

Liverpool’s £70m plan to create a TV and movie-making complex in the city is a “high risk” investment but one that could yield £200m a year in economic value to the city.

A report being put before senior councillors on the city council cabinet on Friday (December 3), lays out the benefits, and risks, of the scheme to transform the art deco former Littlewoods headquarters off Edge Lane into a film and TV studio complex. Phase 1 will see remediation of the site while phase 2 will see the main build of the complex.

Twickenham Studios (now called Time+Space) and Liverpool John Moores University have agreed in principle to be the anchor tenants for the scheme. This will yield an annual rental income of £3.5m. An independent assessment of the 260,000 sq ft project estimates it could create up to 4,000 jobs and create an annual GVA value to the city region of £200m.

Added to that is the wider benefit to the city region’s skill base. Young people, in particular, will be given opportunities to train for careers in the TV and film industry. Without the project, that avenue would be closed off for many.

The report to the cabinet proposes to tear up the two 250-year leases handed to its development partner on the scheme, Manchester-based Capital & Centric (C&C), in 2018 in favour of a shorter 35-year lease. 

There will also be an option to sever links with the company once the phase 2 build is complete and the anchor tenants signed up, which is projected to be towards the end of 2024. The council will have the option to take the development back for a purchase price of just £1.

However, the council has also agreed to “write off” £1.6m owed to the city by C&C. This was the sum paid by the council in 2017 to Government agency Homes England for the site. C&C was meant to reimburse the council for this payment.

Liverpool City Region Combined Authority has approved £8m for phase 1 from a total funding pot of £17m. This includes £7.1m for the capital works and the remaining £900,000 to be paid to C&C to cover its historic costs. The Littlewoods building is currently in a dilapidated state having been badly damaged by fire in 2018.

The report states: “The project has a greater than usual risk profile.”. It then goes on to explain that should phase 2, which depends on securing £25m in debt funding, not go ahead then the disposal value of the site is likely to be less than the initial £8m public investment.

Littlewoods, Capital & Centric
CGI of how the Littlewoods TV and film complex will look
Littlewoods
The former Littlewoods building was badly damaged by fire in September 2018

 

However, later on it adds: “The financial and commercial risks highlighted should be considered in the context of the significant regeneration benefits of the project itself, as a catalyst for further growth and the positive impact on the surrounding neighbourhoods.”

C&C, which has already delivered a number of commercial projects in Merseyside, was originally handed the 250-year leases with a view to them taking on the long-term management of the site, as well as the initial delivery of the project.

Under the new proposals that will be considered by the cabinet this week, the council is looking to mitigate the uncertainties in the project by keeping its options open. The report recommends what is called a ‘put and call option’ in the agreement between the council and C&C.

This gives the developer the right to sell the development back to the council but also, crucially, gives the authority the option to re-acquire the C&C lease for £1, adding: “It is highly likely that the council would trigger this option.”

It goes on to say: “Members should be aware that neither the council, Combined Authority nor C&C presently intend for C&C to operate the development once physically complete.

“C&C’s role is as developer manager (a service provider rather than investor) and effectively a temporary lessee. Therefore, on triggering the option it will be essential for the council and Combined Authority to have developed a clear strategy for the future of the building.”

Despite the uncertainties around the project both the council and C&C are relieved it is back on track after years of delays. It was first proposed almost a decade ago. C&C director Adam Higgins told LBN: “This is such an exciting project. 

“With JMU involved they will be giving kids and adults an opening into the TV and film industry they otherwise wouldn’t get. This fantastic scheme will absolutely catapult Liverpool forward.”

Earlier this year, two ‘pop-up’ film studios, collectively known as The Depot, were completed by contractors Morgan Sindall on behalf of the city council, close to the LIttlewoods building. That £3m project was funded from the £17m pot.

Phase 2 works will take approximately a year and once phase two is fully costed, this could lead to a full development contract. For phase 2 to proceed a fully-costed funding package is required, with the council and combined authority projecting to both invest £12m and a commercial lender being sought for the balance of around £25m.

The Littlewoods Studios scheme would comprise:

  • 85,000 sq ft of studio and ancillary space for Twickenham Film Studios, to be operated by TIME+SPACE Studios.
  • 75,000 sq ft of education space proposed for Liverpool John Moores University to deliver a sector-leading Entertainment Technology Centre to ensure local young people develop high-level skills to work in the industry.
  • A further 95,000 sq ft of flexible employment space for creative industries, which will be advertised to market for expressions of interest.

It is predicted that The Depot alone will create a £24m economic boost for the regional economy, creating 360 new jobs and 760 indirect jobs and forms part of Liverpool’s 10 post-pandemic pledges to stimulate growth.

You might also like More from author

Leave A Reply

Your email address will not be published.

this user does not exist