29 Aug 2024
The balloons have burst, the buffet has been cleared away, and the dignitaries have dispersed. But a month after the official launch of city centre showpiece Jubilee Square, the long game has only just begun, as the district council has many years ahead before it finishes paying for the development.
Although the original scheme for what was then known as CCOS (City Centre Opportunity Site) South was granted planning permission in 2017, the Lib Dem administration decided substantial improvements were required when they took control of SADC in 2019.
This added an extra £10m to the scheme, and meant revenue expected to begin in 2022/2023 was delayed until 2024/25.
The initial plan had been for a £49 million mixed development of 33 affordable homes, 60 homes at market value and commercial space, but as the project dragged on and costs continued rising it was decided to sell all of the residential properties to Watford Community Housing Trust for social housing.
This meant SADC lost the extra revenue it would have generated from the private ownership sales, a figure which has yet to be confirmed.
The overall budget for Jubilee Square came in at £64.073m which was in the capital budget approved by SADC in February 2024.
The payment received from WCHT was £25.615m so the remaining financing requirement will be £38.458m.
But that does not mean there is a single outstanding debt for that amount, or the burden of borrowing costs easily calculated.
According to Suzanne Jones, SADC strategic director for customer, business and corporate support, loans are not taken out on a project-by-project basis.
She said: “External borrowing is based on all capital requirements and from assessing the council’s cashflow requirements which includes working capital and reserves. The cost of external financing is taken as a whole and not repaid on a monthly basis.
“Funding borrowing is part of the overall financial planning that the council has to undertake so there is more than this to take into account in terms of the impact on future service provision. This will be set out in reports to the service and scrutiny committees in the September cycle of meetings.”
The commercial element of the development is being marketed on behalf of the council by Aitchison Raffety, who are quoting a rent of £40 per sqft for the 54,766 sqft available.
Suzanne added: “The commercial space is being marketed via a joint agent approach, with both Aitchison Rafferty and Lambert Smith Hampton appointed. The rent that Jubilee Square is being marketed at has been determined based on comparables.
“Grade A office space in St Albans, be it new or refurbished to a very high standard, is promoted at rents of between £37.50 to £45 psf.
“Examples include office schemes at Verulam Point, One Abbey View, 45 Grosvenor Road and 10 Bricket Road. Feedback from both agents, the council’s property advisors and prospective tenants is that the council’s expectations in terms of rent are realistic.
“The final figure agreed with any incoming tenant, following negotiation, will be based on a number of factors including the amount of space to be taken and the length of the lease.
“It should also be noted that increasingly office demand and rents have been driven by the environmental credentials of the offices, with record rents being set for environmentally friendly buildings. This is demonstrated in St Albans with the letting in January 2023 at 10 Bricket Road to St James Wealth Management at £41psf.”
There are still no signs of life in any of the buildings which make up Jubilee Square, and the promised arrival of the first tenants earlier this month has not happened.
The coming months will see councillors of all political parties given their first proper opportunity to scrutinise the financial burden of the project, giving the public a chance to decide whether, at the end of the day, it was worth it.
