1. Introduction
1.1 The purpose of this further proof of evidence is to address
the evidence submitted by Michael Beese and Tony Morpeth, both of
GL Hearn, on behalf of Somerfield Stores Limited.
2. Proof of evidence of Michael Beese
2.1 At paragraph 3.9. Mr Beese suggests that the planned start
of construction in August 2005 (referred to in paragraph 4.4.2 of
my proof of evidence) is optimistic. Notwithstanding the fact
that service diversions, at least, are very likely to start at that
date in advance of the Secretary of State's decision regarding
confirmation of the Order, August 2005 is the current estimated
date for the purposes of the construction programme. If the Order
is confirmed, construction itself will then commence as soon as
possible following confirmation and, if necessary, the construction
programme will be amended using the actual start date as the base
date from which completion of the component parts of the Scheme
will be programmed. The August 2005 date is irrelevant to the
question as to whether the Scheme will proceed.
2.2 At paragraph 3.17, Mr Beese suggests that there is
uncertainty about the Scheme due to the absence at this stage of a
development partner. As I explained in my evidence (and Mr Beese
quotes specifically an extract from paragraph 4.4.1), CGNU will
bring on board a developer. In practice, this could take the form
of anything from a contractual arrangement with a party to manage
the construction of the development on behalf of CGNU, right up to
the appointment of a development company as an equity partner. The
Scheme is an extremely attractive one and several developers have
shown, and continue to show, an interest (both solicited and
unsolicited). Discussions with several potential developers have
commenced. An information pack has been prepared and, from my
experience with similar developments, I am confident that there
will be no difficulty in securing an appropriate developer partner
for the Scheme.
2.3 At paragraph 3.20, Mr Beese suggests that there is
uncertainty about the Scheme proceeding because the Building
Agreement will contain a number of pre-conditions. It is correct
that pre-conditions will need to be met, however the pre-conditions
are entirely normal for developments of this scale and type.
Consequently, the existence of the reconditions does not imply
any nervousness from CGNU about the viability of, and its ability
to deliver, the Scheme. The pre-conditions to be met in this
instance are standard commercial terms and I am not aware of any
impediment to satisfying them.
2.4 At paragraphs 3.23 and 3.24 of his evidence, Mr Beese
asserts that there is uncertainty about the Scheme proceeding
because of lack of detail and certainty about the leisure and
residential parts of the Scheme. I can confirm that it will not be
a pre-condition of the Building Agreement for the leisure and
residential units to be let, although it is a planning requirement
that the residential units have to be built and available for
occupation.
2.5 CGNU have undertaken detailed market analysis and the
results show that the residential units will be very marketable. It
is too early to market individual units. Marketing will be
commenced when development is well underway.
2.6 Likely occupiers of the leisure elements have been
identified, but the space has been designed to allow for
flexibility to be let as appropriate nearer the time of opening,
having regard to the way in which leisure offers are constantly
evolving. Individual units are unlikely to be marketed until around
two years before opening, i.e. 200712008, so that the latest trends
can be attracted.
2.7 At paragraph 3.13 of his proof of evidence, Mr Beese
refers to CGNU's evidence to the local plan inquiry, and seeks to
suggest at paragraph 3.15 that this indicates a "nervousness" about
the proposed Southgate development if the Council's requirement for
significant comparison goods floorspace to be developed at Western
Riverside was to be approved in the Adopted Local Plan. That is not
the case. CGNU's concern is that the wording of the Plan should
reflect what I believe is the agreed position of all parties
presenting evidence to both this CPO inquiry and to the local plan
inquiry: that the local plan policies must give priority to
Southgate. Both CGNU and the Council agree that Southgate should
proceed first, not least because it is of fundamental importance to
the future retail health of Bath city centre.
3 Proof of evidence of Tony Morpeth
3.1 At paragraph 2.,1 Mr Morpeth describes the Southgate Centre
as "virtually fully let and occupied by a wide range of national
and local retailers, offering a comprehensive scheme to Bath's
residents and visitors". I attach as appendix 1 to this rebuttal a
plan identifying, in respect of the Southgate Centre, vacant units,
current tenants and their tenancy position. This shows the true
occupancy position. I am surprised by Mr Morpeth's description of
the centre - plainly it is run down and crying out for
redevelopment.
3.2 At paragraph 3.3.1, Mr Morpeth states that there is no
categorical statement in my evidence of allocated or reserved
funds, that there is no funding agreement and that there is no
reference to an indicative development cost. I can confirm that
full Board approval for the Scheme exists and funds are available.
No funding agreement is required, only authority from the funders
(i.e. CGNU), which exists. The development cost of the scheme was
considered internally by CGNU before Board approval was given and
the projected costs are allowed for in CGNU's cash commitments.
3.3 At paragraph 3.3.2, Mr Morpeth alludes to the same point as
Mr Beese does at paragraph 3.17 of Mr Beese's proof regarding the
current absence of a development manager. In this regard, I repeat
the points that I make in paragraph 2.2 of this rebuttal
evidence.
3.4 At paragraph 3.3.3, Mr Morpeth repeats the points that Mr
Beese makes at paragraph 3.20 of Mr Beese's evidence regarding
the pre-conditions in the Building Agreement. I repeat the points
that I make at paragraph 2.3 of this evidence.
3.5 At paragraph 3.3.4, Mr Morpeth suggests that there is
uncertainty about the Scheme proceeding because pre-lets or anchor
tenants need to be secured before CGNU can make a binding
commitment to the Scheme. Of course, CGNU will not proceed with the
Scheme on a wholly speculative basis, that is until an acceptable
level of pre-lets has been secured. I am confident that these will
be achieved, given the demand for retail units in Bath and I have
not sought to secure any specific pre-conditions relating to
prelets in the Building Agreement.
3.6 At paragraph 3.4, Mr Morpeth makes similar points to Mr
Beese regarding delivery of the residential and leisure elements of
the Scheme. I refer to the points that I make at paragraph 2.4 of
this evidence in this regard.
3.7 At paragraph 3.5, Mr Morpeth makes similar points to Mr
Beese regarding the proposed construction start date. I repeat the
points that I make at paragraph 2.1 of this rebuttal evidence in
this regard.
