085. Ensure strong institutional partnerships for asset-based collaboration
Separate organisations with different goals, cultures, incentives, and timelines will often find that despite clear and convincing reasons for partnership initially, events can cause challenges along the way.
Strong institutional relationships based on joint ventures or local asset-backed vehicles as described in our previous report, supported by clear rules on how public assets will be used, are necessary for the long-term success of any partnership. Broader shared goals for place are helpful when unforeseen problems arise. If the partners involved view the collaboration as having a wider civic impact than the a single project, then greater flexibility towards achieving this wider goal can overcome the rigidity of narrow, contractual relationships.
Good governance supported by strong personal and professional relationships between partners, especially at senior level, have been vital for many partnerships to ride through the inevitable rough patches.
Case study 5: Newcastle Science Central
Newcastle city centre is the engine of the city economy. High-knowledge firms looking to attract skilled staff from across the wider region and be close to other firms and clients are keen to locate there. The internationally respected university is also looking to expand in the city centre to support research and innovation in the city. But as in many UK cities since the 2008 financial crisis, the collapse of speculative commercial development has threatened the city’s economic development.
The Newcastle Science Central Partnership allows the city to work with Newcastle University in a 50-50 joint venture to use a valuable asset it owns – a large site on the edge of the city centre that was previously a brewery and before that a colliery – to help deliver their shared vision of city growth driven by science and technology.
As well as their shared aims, the collaboration enables partners to achieve their individual aims: the city’s need to increase commercial space and enable innovation; and the university’s need to create more space for research and innovation. A strong framework for partnership in a joint venture in which two thirds is owned by the city and one third by the university, alongisde personal relationships and flexibility, has helped to make the most out of this city centre asset.
Newcastle Science City was announced as one of a number of Science Cities in 2004 – and as such its initial focus was heavily on science. The long period since has seen economic and political conditions around the project change significantly, including the 2011 abolition of one of the initial partners, the regional development agency One North East which was involved in assembling the site. At this point the council acquired the site.
This required flexibility on both sides of the partnership to stay on track and ensure that the site would have the greatest impact on the city and university in light of the new conditions. The site’s history as a colliery meant that there were additional funds generated from the venture. Preparation works before construction began included the open-cast mining of thousands of tonnes of coal, the revenues from which were invested into the site.
At first the partnership was an initiative set up to manage a programme of delivery that would drive economic growth through science and innovation in the city. At its peak, the team was made up of 36 people and delivered projects to engage citizens, improve skills, support higher aspirations, provide business support and business growth, as well as marketing.
With the abolition of RDAs and the change to a different budgetary environment, a core team of three now drives the Newcastle Science City Partnership forward. The partnership, including delivery teams within both Newcastle City Council and Newcastle University, is now more focused on the goal of addressing the city’s need for office space at the site.
The flexibility to update the aims of the site was helped by the ambition of Newcastle University’s leaders to play a greater role as a civic institution, working alongside the council’s leadership. The shared civic vision and good personal connections at high levels between both organisations has supported the partnership’s growth and helped to set the initial framework for collaboration.
The city set out its economic vision for the city centre in its Core Strategy and Urban Core Plan and how the Science Central site fits within the broader vision for the city’s economic development has been updated. As the economic conditions have changed, this flexibility and clear city centre vision allowed the initial focus on science give way to more emphasis on business growth and innovation.
Making the partnership work required significant effort. Although the two organisations have a shared vision for Newcastle, they have different legal standing, aims and cultures that must be accommodated. For example, Newcastle University is a charity, limiting how it can act in profit-making endeavours. This requires flexibility as new commercial property is developed on the site.
The council is aware of companies that are keen to move into the city centre but can’t because developers are not able to take on the risk of building new space. Partners are clear that Newcastle Science Central helps fill that clearly identified gap in the market and this evidence has led the partnership to act to meet this demand. Together they delivered a financial and strategic return from the asset.
Legal & General have bought into the development company, bringing their commercial expertise as well as working capital to help continue development. The company’s chief executive has personal ties to the North East and an interest in developing the Northern Powerhouse.
The structure of the partnership allows flexibility for future development based on the appetite of partners and has established a legal structure that is flexible in taking forward individual developments.
Using this flexibility and strong evidence base for developing in the city centre, this public asset is now on its way to driving growth in the broader city region, with more buildings set to open this year. It is on track to host two prestigious National Innovation Centres (Ageing and Data), a national research centre in energy systems, as well as a high specification commercial laboratory space to meet the needs of the city’s growing life science sector. Two large Grade A commercial office buildings are next in the pipeline to be complete by 2019.
Once complete, as well as business rates revenue, the city’s asset will help its university and the wider economy to grow as it becomes home to a new high-knowledge science quarter in the heart of the city, with 4,000 jobs, 500,000 ft2 of new commercial space and 450 homes.