£1m from property sales to be invested back into commercial and development opportunities
Thursday October 6th, 2016
City of York Council is set to sell a portfolio of currently under performing commercial buildings and use the £1million generated to invest back into new sites and future development opportunities in York.
Proposals to sell three buildings on Redeness Street (off Layerthorpe) and Stonebow House, located in the heart of the city centre, will be taken to the council’s Executive next week.
The recommended option could see the income generated from these sales invested back in to the leasehold of two sites at Hospital Fields Road which would provide a significantly better rental income. The sites also offer potential future development opportunities.
This is part of the council’s ambitions to increase the revenue generation from its commercial property portfolio by £1m over the next four years. An alternative option is to use the proceeds to repay council debt.
The sale of Stonebow House would provide significant income to the council of £750,000 from a property that currently only generates a minimal rent. This would also allow the run down building to be renovated and brought back into use by developers the Oakgate Group, who approached the council to sell them the freehold of the building.
Oakgate has drawn up proposals to provide new commercial spaces with apartments above. Planning approval for this development will be considered by a planning sub-committee on 6 October. If approved, and the sale of the property is granted by Executive, Oakgate propose to begin construction in January 2017.
These proposals support the wider regeneration potential of this largely underused and in parts semi derelict part of York. This strategically important location in the city centre known as the Southern Gateway, encompasses Piccadilly, the Eye of York, St George’s Field and the Foss Basin.
In addition to this, the council proposes to sell the freehold of two other properties that generate a low rental income at Redeness Street to Maple Grove Developments for £256,500. This would support the expansion of student housing that adjoins this site.
Cllr Chris Steward, Executive Member for Finance and Performance, said:
“The council has a major role to play in helping to stimulate and guide development in York. Here we have an opportunity to maximise the redevelopment and regeneration of underperforming buildings including Stonebow House, which is located in an important gateway to the city. This will also help us to generate more rental income for the council and invest this back into future developments.”
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