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Hungate land sale ‘best for jobs’
TOP councillors are set to rubber-stamp the sale of land at Hungate to allow the development of a new office in York for insurance giant Hiscox.
Council officials have warned in a report that the potential investment could be lost if the site is placed on the open market for higher offers.
The site was originally proposed as the council’s new headquarters until the authority withdrew its own planning application in 2008, following criticism of its plans.
The council revealed it asked parties who had expressed an interest in the site to submit offers as it progressed discussions with Hiscox.
The highest bid, the value of which is undisclosed, was from a developer intending to build a 176-apartment “apart-hotel” with a small retail development of about 5,000 to 10,000 sq ft.
The scheme was expected to create 60 direct jobs, although the report said the likelihood of displacement – with workers expected to move into the roles from existing tourism jobs – meant the impact was more likely to be 31 full-time employees and an economic impact of £718,000 by 2026.
The lowest bid was for a 150-bed three-star hotel, which would provide 100 jobs, or 51 full-time employees, taking into consideration the effect of displacement, and add £1.55 million to York’s economy by 2026.
The Hiscox development, of 24,000 sq ft of office space and an £18 million 262-bedroom three-star hotel, is expected to create 400 jobs initially – 300 at Hiscox and 100 at the hotel – with the potential for 200 more at Hiscox later.
The combined investments in the office and hotel could also lead to up to 64 indirect jobs through supply chains, potentially adding £42 million to York’s economy by 2026.
The report said the land was given a nominal value of £3.55 million when the council bought it for its headquarters. It had since spent a further £227,000 on archaeological investigations and clearance work. However, an updated valuation had shown a drop in land values.
It said the council would incur borrowing costs of £90,000 per £1 million it lost out on in the deal, but any capital receipt would improve its overall debt position.
The report concluded the Hiscox bid “while not the highest capital receipt, delivers by far the largest economic benefit to the city as a whole and creates ten times more jobs” as the highest bid.
The report will be considered by the council’s cabinet on October 9.