Councillors to consider next steps for Crewe’s Royal Arcade scheme

6 November 2023

Cheshire East councillors are to consider options for the next phase of Crewe’s Royal Arcade redevelopment – as factors including double-digit inflation, the cost-of-living crisis, and the government’s decision to scrap HS2 north of Birmingham place increasing pressure on the project’s viability. 

The redevelopment of the Royal Arcade site is part of an ongoing £100m plus town centre regeneration programme, which includes more than 20 projects and focuses on providing more reasons for people to visit the town centre and to stay for longer.

Work on phase one of the scheme – a new bus station and multi-storey car park – is well advanced and is expected to be completed in spring next year, providing modern transport facilities for visitors to the town and freeing up other car parks to allow for further development projects to progress. 

Planning permission has been granted for a state-of-the-art youth centre on Oak Street car park, with proposals being developed for Delamere Street and Chester Street car parks to provide accommodation for older people and families. Work is also due to begin shortly on a new history centre to co-host the region’s archives, which will see the closure of the Civic Centre car park. 

On 14 November, the council’s economy and growth committee will consider a report on the current position and challenges with the delivery of phase two of the Royal Arcade scheme – planned to be mixed-use and focused on leisure activities – and puts forward options for the next steps.

Councillor Nick Mannion, vice chair of Cheshire East Council’s economy and growth committee, said: “In October 2020, the council entered into a development agreement to deliver the Royal Arcade scheme in two stages, with the leisure-led part due to get underway once the new bus station and multi-storey car park had been completed.

“Three years ago, that was fully viable. But across the UK, the viability of commercial-led leisure and retail developments is being met with challenge after challenge, not least double-digit inflation in construction costs, increases in interest rates, the cost-of-living crisis, and a decline in town centre investment values by some 20-25% over the past two years. These challenges, which remain, were not foreseen, and there were major rises in costs over a very short period.

“Add to this the recent decision by Government to scrap HS2 north of Birmingham – a huge blow to market and Investment confidence in Crewe – and it is evident that phase two of the Royal Arcade scheme has been seriously impacted and that there is a significant financial viability gap.

“Despite these significant and ongoing challenges, our development partners Peveril Securities Ltd, and their development managers, Cordwell Property, have been proactively engaged with the council to identify ways of reducing this growing viability gap and explore other development options and ways of funding this.

“However, the council recognises that due to the economic picture nationally, phase two cannot currently be delivered. 

“We must now take a decision on how we move forward. One option is to sit and wait for the economy to improve and for our development partners to then progress phase two – but this could see us waiting for five or six years, which is not a positive step for Crewe.

“Or we look at how we can deliver something that generates activity and footfall in the town centre as soon as possible, is financially achievable now, and complements the multiple other fantastic projects being developed.”

The report to the economy and growth committee identifies four options for the future use and development of the Royal Arcade site, with a primary recommendation to advance plans for using the site for ‘meanwhile uses’.  

Meanwhile uses are frequently used to add vibrancy and increase footfall in town centres by using temporary buildings and spaces to create a range of commercial activity and recreational spaces.

In Crewe, this could include a new children’s play area, seasonal activities such as a temporary go-karting track, trampoline park, pop-up cinema or ice-skating rink, space for traders to sell food and drink, wildflower areas and outdoor exercise space.

The council will need to consult on potential meanwhile uses for the site with key stakeholders and operators, following which proposed uses would be subject to the appropriate procurement, legal and planning processes, and could not be put in place until after the new bus station and multi-storey car park has been completed next year and the site has been handed back to the council by contractors. 

Alongside meanwhile uses, the recommendation to committee is to continue exploring other opportunities for funding the original scheme as well as investigate alternative forms of development. 

As part of this work, the council is pursuing a compensation and investment package from Government following the decision to scrap HS2 north of Birmingham. This includes funding to support the continued regeneration of Crewe town centre and deliver projects that will increase the vibrancy and attractiveness of the area and help restore investor confidence following the announcement.

Read the full report and recommendations to 14 November’s economy and growth committee.