A Review of Birmingham’s Enterprise Zone Investment Plan

Andy Street, Chair of GBSLEP, George Osborne, Michael Heseltine and Sir Albert Bore, Leader of Birmingham City Council at the launch of the Enterprise Zone

Andy Street, Chair of GBSLEP, George Osborne, Michael Heseltine and Sir Albert Bore, Leader of Birmingham City Council at the launch of the Enterprise Zone

As Michael Heseltine was in Birmingham recently launching the Enterprise Zone Prospectus with George Osborne it is useful to review the delivery plan of the EZ; the Enterprise Zone Investment Plan produced jointly by Birmingham City Council and the Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP) which will drive much of the early investment in the Enterprise Zone.

Enterprise Zone  Investment Plan

The investments planned are on top of the impressive investments coming through presently including the New Library, the Airport runway extension, the new New Street station plus Grand Central shopping centre and the positive promise of HS2. In total, in the first phase of investments up to 2017/18, it is planned to

  • Invest £128m
  • Creating 7231 jobs
  • Almost 300,000 sq metres of new business space
  • Levering over £300m of private sector investment

The Investment Plan has five main priority areas;

  • Site Development and Access
  • Infrastructure
  • Digital Connectivity
  • Business and development support
  • Skills Development

So what investments are planned? What is clear is the vision for capital investments in the City Centre in this time period is quite focussed. The main proposals concentrate largely on two key projects with almost 70% of resources being invested in them. These two projects are:

Firstly: The further extension of the Midland Metro City Centre extension; This was originally planned to finish in Broad Street where the International Convention Centre/Symphony Hall is located but was reduced in scale because of the costs associated with strengthening a bridge.

So this fly through of the extension stops in Stephenson Street, adjacent to New Street Station but the City Council/GBSLEP are planning to reinstate the original planned route so that the Metro will now serve the ICC, the Library of Birmingham and importantly in development terms the Paradise Circus and Arena Central developments.   This further extension is costed at £25m. This investment will really be beneficial for the two key investment sites it will service; namely Arena Central and the Paradise Circus development. 

Arena Central small

Proposed Arena Central Development: to be served by the Metro Extension

Secondly: A significant investment in Paradise Circus redevelopment is planned with a total allocated of £61.3m up to 2017/18 (with further investment of £22.1m in the next period).

Paradise Circus Aerial View small

Paradise Circus Aerial View

This is a hugely costly scheme given the demolition and road works necessary but is predicted to lead to up to £450m total investment.  The outline planning permission allows for a mixed use scheme with up to 170,000 sq metres of new space, mostly made up of new office space but with provision for the replacement of Adrian Boult Concert Hall and for new retail and hotel uses.  

The appointment of Argent as developers for this scheme is to be welcomed. They produced in Brindleyplace the most successful mixed use scheme in the City Centre. They are currently developing out a major scheme in Kings Cross and have recently attracted investment from IT giants Google who are building their UK headquarters on the site. Argent hopefully will be able to use their national and global contacts to attract high profile investors into Paradise Circus.

Analysis

Whilst this is an ambitious plan it is worthwhile noting what is lacking. There are no further investments planned in improving the cultural offer of the city. The New Library and the shared library theatre replacement together with the replacement of Adrian Boult Hall will potentially increase the pulling power of the city but these are probably marginal in attracting national and overseas visitors. The LEP has previously indicated its plans for supporting the wider cultural development in the city centre through its support for Birmingham’s Creative City Partnership with proposals for a new Museums Quarter in Eastside, This might include a Photography Museum and a new Contemporary Art Gallery. These are not seemingly followed through in its initial plans.

Birmingham's Museum Quarter

Proposals for a new Contemporary Art Gallery in Eastside as part of wider proposals for a new Museum Quarter

A previous blog post has looked at how Birmingham has fallen behind in this field and there is nothing specifically about this plan which would indicate moves to counter this via improving the business or leisure tourism offer. Improved accessibility yes; offer no – although the addition of the John Lewis development in Grand Central enhancing further the shopping  experience in the city, may well up push further day visitors. Tourism is an increasingly important aspect to city economies as for the first time in human history last year over 1 billion people visited another country and culture is a big draw in attracting these tourist; in its first phase it seemingly fails this aspect.

Secondly whilst this is not a full economic strategy for the LEP, it is thin on business support. It particularly lacks on innovation, and on a triple helix approaches to stimulating the economy. So the business support measures seem at best formulaic and tokenistic. This hopefully will be countered when the full economic strategy incorporating the Heseltine input is unveiled later in the year.

What is welcome elsewhere in the plan is the continued commitment to introducing affordable ultra fast broad in Digbeth and the Jewellery Quarter. The state aid approval for this is being challenged by Virgin Media and BT in Europe so may take some time to clarify. It would have been useful to perhaps detail other measures as well; measures to move the City Centre towards a lower carbon future; measures to improve cycling (As Mayor Boris Johnson has just announced in London); generally measures that one might badge under a ‘smart City’ heading.  In this respects the plan is very much an old style approach reminiscent of the 1980’s and 1990’s.

These qualifications noted the investment in infrastructure is to be applauded. These two investments are focussed on the west of the City centre, on directly or indirectly bringing forward two key development sites, Paradise Circus and Arena Central, located adjacent to each other, which probably have the best chances of development in the city given their central location. This investment will build on the recent investment in the New Library and the reworking of Centenary Square, the recently completed Cube Development and massive investment in New Station plus the planned refurbishment of the National Indoor Arena all within close proximity.

Birmingham's West Side Investments

Birmingham’s West Side Investments

The important dynamic to EZ investments is that it is necessary to back winners in the early stages of the plan to ensure that business rate resources flow in over the 25 years life of the zone to allow for wider investments as time progresses. It will be vital to diversify investments in the medium term. to invest in culture and, to fully embrace the concept of a Smart City, a low carbon city as these increasingly are what sells cities.

The planned investments will undoubtedly add to the quality, accessibility, legibility and feel of the city centre despite some concerns over the loss of the iconic Central Library building.  The key to whether this works for the City and for the Enterprise Zone is how successful Argent (and the developers of Arena Central)   are in lining up new occupiers and new investors to the City and so efforts such as the marketing of Birmingham in MIPIM (the global property and investment conference and exhibition attended by almost 20,000 attendees from 83 countries) although seemingly expensive are very important. Paradise Circus and Arena Central have the potential to provide up to 240,000 sq metres of additional office space, about twice the size of Brindleyplace and thereby could deliver the space for at least 18,000 new jobs.  It is very important that this space is filled with new or expanded firms. So just as Brindleyplace has Deutsche Bank these developments need other such occupiers.

Conclusions

Whilst the health of the UK and European economy will play its part, with the improved competitiveness of the city through the improved connectivity of the city and the undoubted cost advantages of locating in Birmingham the success or failure of this initial phase of the Enterprise Zone Investment Plan depends largely on how well the city sells itself. It has a good chance.

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One comment

  1. […] an initial EZ Investment plan of £128m in June 2012 which I briefly looked at in a previous post.  Two years have passed and the Council and the LEP have now decided to more than double the […]

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