05What these lessons mean for regeneration elsewhere

While the lessons from King’s Cross are relevant for regeneration projects elsewhere, there is one big difference that makes the project an imperfect guide. The site sits on the fringe of one of the most in demand central business districts in the world, as well as including one of the busiest train stations in Britain. This demand has risen in recent decades as the strength of the central London economy has increased, making King’s Cross even more attractive.

This all made the development more commercially viable and in need of less public intervention.

Other regeneration projects likely fall into two broad categories of demand, which will impact their viability and what economic regeneration can occur there. These are:

1. Islands of low demand in an otherwise strong city centre economy, like King’s Cross
2. Low demand across the whole of the city centre

Regeneration in most places will not be as commercially viable

Given the high and rising level of demand for commercial and residential space in London, the risk attached to a regeneration project in the Capital is likely to be much less than in other parts of the country where demand is much lower (and even then, the previous section showed that the public sector still played a role). Without this demand, private funding will be harder to attract, and a higher ratio of public financing will be needed to fund a project.

Figure 4 indicatively places King’s Cross on the spectrum of commercial viability and compares it to most regeneration projects elsewhere.

The King’s Cross regeneration lies somewhere to the right of the spectrum in Figure 4. The high demand for space in London and advantageous location of King’s Cross meant that, although public intervention was needed to overcome some market and policy failures, the public sector did not need to provide extensive de-risking or funding. The high commercial viability of King’s Cross meant less profitable uses such as affordable housing could be provided on site through private funding and the project remained viable.

Other regeneration projects that, like King’s Cross, are islands of low demand in otherwise strong city centres will lie to the right of the spectrum but those that sit within city centres, where demand is low, will lie further to the left. This will mean that more public sector involvement will be required, both in terms of de-risking the project to get development going, and in providing public goods and public realm. The lower returns expected from such projects will also limit the amount that the private sector is prepared to spend on the latter amenities (the provision of which a number of interviewees pointed to as being an important part of King’s Cross’ success).

Regeneration elsewhere will have similarities and differences

Given this, what can be achieved will vary from project to project based on demand. What follows applies the framework for regeneration to three live projects – Bristol Temple Quarter, York Central and the former Broadmarsh shopping centre in Nottingham, all of which are also located by transport hubs near or in city centres – to expand and build upon the King’s Cross example. Doing so highlights what other case studies can learn from the key lessons from King’s Cross, and how they can also inform policy makers on how regeneration elsewhere will differ.

Looking at proxies for office demand gives an indication of how similar the three case studies are to King’s Cross, and where they sit on the spectrum of commercial viability. Table 3 shows how London is a clear outlier in terms of demand. Bristol city centre has the next highest office costs per square metre, while Nottingham city centre has the lowest demand of the case studies and would lie furthest to the left on the spectrum in Figure 4.

Table 4 and Table 5 set out a number of other indicators to get a better understanding of the context that the case studies sit within and how this compares to London. Table 4 looks at the use of space in each city centre. Table 5 looks at the structure of the city centre economy, wider labour market indicators, and the quality of office space. The quality of office space may become increasingly important for attracting high productivity firms, as they try to offer attractive and versatile workspaces to compete for talent in tight labour market and respond to hybrid working.

Applying these indicators to the regenerations of Bristol Temple Quarter, York Central, and Broadmarsh Nottingham, shows us what these regeneration projects need to overcome, and what they should aim to achieve.

Temple Quarter, Bristol

Bristol is one of the most productive cities in the UK, driving a relatively high demand for office space in the city centre (Table 3). This productivity is supported by a large and high-skilled labour force, with 40 per cent of the working age population having a degree-level qualification or higher (Table 5).

If the Levelling Up White Paper’s goal of having a globally competitive city in every area of the UK is to be attained, Bristol is a clear contender as the South West of England’s largest and most productive city. However, it still lags other European competitors.²⁵ Getting the most out of its city centre will be an important part of making it more internationally competitive. Part of the answer to this will be to build on the success of its city centre by expanding the amount of office space in it.

Regeneration process and challenges

Temple Quarter is a 70ha area earmarked for development and located around Temple Meads Station in Central Bristol, on the periphery of Bristol’s city centre. Phase 1 will lead with the redevelopment of several different plots surrounding Temple Meads Station, but a planned second phase could see the redevelopment of St Philip’s Marsh, which is an additional 60ha site.²⁶

The data above suggests that the Temple Quarter site is more like King’s Cross, in that market and policy failures have prevented regeneration of the sites, but these sites are islands of low demand within a city centre of otherwise high demand. Over time, a number of sites in the plan may have developed by private investment alone but have been brought under the Temple Quarter scheme. Coordinating the regeneration of these sites may be more difficult than in King’s Cross due to their fragmented nature.

The plan for regenerating Temple Quarter was first announced in 2011, with enterprise zone status being applied to the site in 2012.²⁷ The development of the enterprise zone is led by Bristol City Council, in close consultation with prime funder West of England Combined Authority, as well as Network Rail, and Homes England.

Public intervention has overcome and mitigated several market failures across many of the sites within Temple Quarter, including land assembly (private arrangement and compulsory purchase orders), infrastructure works, and the issuing of a local development order to make development on the site easier. However, the regeneration of other sites within the broader scheme is still overcoming issues relating to land assembly and flood issues. Large public sector tenants, such as the University of Bristol, and Engine shed 2 (a collaboration space and business incubator), will also locate on the site, helping to de-risk development and potentially attract other firms to the area.

These interventions have overcome a number of market and policy failures, but the regeneration plan has still experienced setbacks. The 2016 spatial framework published by Bristol City Council, incorporated planned improvements of the rail line at Temple Meads – some of which have since been deferred.²⁸ Crucially, the original plans included a large arena to be built on the Temple Island site, which has since been relocated due to high costs.

Coordinating a large area for regeneration (or two large areas if including St Philips Marsh) which includes multiple separate sites, requires a detailed, commercially viable and flexible masterplan to ensure the area benefits from useful spill-overs between the sites, such as those produced by placemaking.

The plans that have been produced indicate that the composition of uses will lead to the project falling short of its potential economic regeneration. The 2016 spatial framework only provides an indicative figure for “employment” floorspace, but it could mean as little as 25 per cent of the new floorspace in the Temple Quarter would be office space – a lower ratio than in Bristol city centre (Table 4).²⁹ It also indicated that building density may have been capped to prevent conflict with the “placeshaping” objectives, reducing overall floorspace. Additionally, the 2021 “vision for the future” for the Temple Quarter regeneration only explicitly allocates one 1.4ha site for commercially-led mixed use, from the 19.1 hectares of sites referenced.

Implications for regeneration

• The Temple Quarter needs to provide a substantial amount of high-quality office space to fully realise the potential economic benefits for Bristol, and the South West.
• To capture the beneficial spill-over effects that can arise from coordinating large-scale regeneration over an area, further plans for the Temple Quarter, that are more detailed, flexible, and commercially viable and which centre economic regeneration, are needed.
• Placemaking, or placeshaping, must complement the economic regeneration in the Temple Quarter, not limit it.

Broadmarsh, Nottingham

Nottingham city centre underperforms. As one of the largest cities in the UK, its city centre should also be a commercial hub, home to many thousands of high-skilled jobs. Yet rateable values suggest demand is low, while the make-up of economic activity shows that there is a lack of high-skilled activity, and the make-up of commercial space shows a relative lack of offices and oversupply of retail space. 15 per cent of space in the centre of Nottingham is retail, compared to 11 per cent in Bristol and 6 per cent in London (Table 4). Residential space also accounts for over half of all floorspace – the highest of the case studies. The office space that is provided is lower quality than in London or Bristol (Table 5).

Nottingham’s population has significantly lower skill levels than in Bristol, London or York (Table 5) and must aim to attract and retain more skilled graduates if it is to make its city centre a more attractive place for high productivity businesses and realise the Government’s ambition to have an internationally competitive city in every region (Table 5).

Regeneration process and challenges

The most immediate regeneration challenge in the city centre is Broadmarsh, an 8ha site in Nottingham city centre, which was home to the former Broadmarsh shopping centre. It divides the train station from the city centre, meaning the now dilapidated centre, constructed in 1972, is one of the first things arrivals into Nottingham from the train station see.

After several failed attempts to redevelop or demolish the shopping centre in the 1990s and 2000s, plans to partially redevelop the area were approved in 2015.³⁰ The intended primary use of the site remained retail and leisure. In 2019, partial demolition of the centre began but was halted by the Covid-19 pandemic. In 2020, the site’s owners, intu, went into administration and the site defaulted to the leaseholder, Nottingham City Council.³¹ In October 2021, Nottingham City Council’s bid for levelling up funding to finish the demolition failed, and so the site remains half demolished.

Given coordination failures and low demand, more public sector money will be needed to demolish the site. To that effect, in August 2022 Nottingham City Council submitted another bid to the levelling-up fund for £20 million for Broadmarsh’s redevelopment.³²

Nottingham has an abundance of retail space and recreating the same activity that occurs elsewhere in Nottingham will not lead to successful regeneration. Consideration should be given to how the site can facilitate high-productivity businesses and jobs in the city centre. Current plans remain focused on retail and leisure for the Broadmarsh centre, while retaining the frame of the derelict shopping centre and “rewilding” the site.³³ However, they do indicate that the centre would form part of a plan for the wider area, which would include approximately 37,000 m² of high-end business and office space.³⁴

Unlike King’s Cross, Broadmarsh’s low demand makes it emblematic of, not different to, Nottingham city centre. Broadmarsh should be at the centre of a wider masterplan to make Nottingham city centre a more attractive place to do business.

Implications for regeneration

• More public funds are needed to demolish the Broadmarsh centre and remediate the site ready for redevelopment.
• The underperformance of the wider city centre shows that a long-term plan is needed for the whole of the city centre with the necessary mix of activities to improve the performance of its economy.
• The Broadmarsh site must play a central role in this plan, which will likely mean increasing the provision of high-quality office space rather than retail.
• Further public subsidy beyond remediation will likely be needed to turn these plans into action, through a mix of policies such as direct grant, public sector relocation, and use of guarantees to reduce the risk to the developer of not finding tenants for the space.

York Central, York

York is one of the most productive small cities in the North of England, but its historic core restricts development in its centre, resulting in it having a low provision of office space and the highest share of retail space of all of the case studies. Almost half of all commercial space in the city centre is given over to retail, likely led by the large number of tourists the city attracts (Table 4). Housing also accounts for a large share of floorspace.

The City of York Council recognises this issue and is keen for the city to provide more office space, to facilitate higher value economic activity in an area disproportionately reliant on the low-paying tourism sector.³⁵

Regeneration process and challenges

The greatest opportunity to change this balance is York Central, a sizeable 78ha site next to York station, of which 45 hectares is earmarked for development.³⁶ Historically the site has been a challenge to develop because it is surrounded by railway lines and earlier plans to redevelop it were shelved in 2009 due to the recession.³⁷ New outline plans were submitted and approved in August and December 2018 respectively, but development has been delayed due to the pandemic.³⁸

Public sector investment to overcome the site’s challenges has put it in a good position for redevelopment. Around £155 million of public funds from a number of sources has been committed for infrastructure and land remediation work, with the intention that this will unlock £700 million of private sector investment.³⁹ Some £100 million of this work – including a new bridge over the rail line and a new pedestrian and cycle footway – is set to begin shortly.⁴⁰ Additional public funding of at least £24.3 million has been spent on land assembly and land remediation works by Homes England and Network Rail.⁴¹ These interventions are in addition to the area being given enterprise zone status in 2015, which will allow City of York Council to retain a higher share of business rates there, providing incentive and reimbursing the council for its investment in the development.⁴²

The current plans for a mixed-use site are being brought forward by a partnership of the City of York council, the National Railway Museum, and the landowners Homes England and Network Rail. The outline plans include up to 87,700 m² of office space, 2,500 homes, 12,000 m² of retail and leisure, and a 12,000 m² expansion of the National Railway Museum on the site.⁴³

This current plan is housing heavy. There is no doubt that York needs more housing – it is the least affordable city in the North of England.⁴⁴ However, as shown above, it is also short of city centre office space, and how this site is used will likely be important for how York’s economy performs in the future. The extra office space added will increase the share of floorspace given over to offices in the city centre from 13 to 16 per cent. This is an improvement, but still some way behind Bristol’s figure of 33 per cent.

Given that York Central is in the city centre, devoting most of the site land to achieving housing objectives would be a wasted opportunity. Building new suburbs adjacent to the existing city would be a more suitable way of providing more new homes in York, as offices in the suburbs are not able to access the special benefits of city centres. This is possible, but currently made difficult by York’s extremely tight green belt, and the local authority’s failure to agree a local plan for development at any point since 1954.

In light of this the York Central partnership, including the City of York Council and Homes England, must balance their housing related mandates. The partnership should devise a master plan that increases York’s office space more than the three-percentage-point increase implied by the current plan.

Implications for regeneration

• York Central is a key development for York’s economy, and it must ensure it delivers the high-quality office space York requires rather than being housing led. This will require a masterplan that gives office space a larger share of the space that will be developed.
• York should agree a local plan, and release land from the green belt adjacent to the city for new homes to meet the city’s high demand for new housing.