Procurement of a Development Partner for the Sutton Civic and Town Centre Regeneration

The London Borough of Sutton sought a development partner to enter into an agreement for the delivery of the redevelopment of the St Nicholas Shopping Centre, Secombe Theatre, Gibson Road Car Park and Civic Centre sites, collectively known as ‘Sutton Civic and Town Centre Regeneration’ including construction of a new Civic Hub for the Council The Council has resolved to discontinue the procurement process on the basis that the proposals for the overall scheme, including the Council’s new Civic Hub, are unaffordable to the Council. The London Borough of Sutton sought the appointment of a development partner for the redevelopment of four sites in the centre of Sutton as part of the Council’s overall regeneration plans for Sutton Town Centre.

The Council has resolved to discontinue the procurement process on the basis that the proposals for the overall scheme, including the Council’s new Civic Hub, are unaffordable to the Council. The affordability of the project was originally based on the cost of constructing the civic hub being funded by the capital receipts of the surplus land for residential development, alongside revenue savings from the reduction in space and additional income from the town centre assets.

Any increase to the costs of constructing the civic hub would require increased borrowing and therefore impact the Council’s revenue budget, requiring savings to be made elsewhere within the Council. The Council considers that the additional costs identified from work carried out to date with the developer, and the risk of further cost increases, results in the scheme proposals being unaffordable to the Council. It would not be prudent for the Council to proceed to enter into a development agreement with the developer for an unaffordable project with this level of cost risk and therefore the procurement process is discontinued.