European case impacts on Council’s town centre plans

A European Procurement decision concerning a Greek Council’s development project, will affect Rochdale Borough Council’s developer selection for the town centre.

The ruling, which provides a legal test case, means that Rochdale Council will re-run its developer selection for the £250 million town centre redevelopment.

Chief Executive, Roger Ellis today said the decision had not been taken lightly, but had been taken with the best interests of the people of Rochdale and the town’s regeneration in mind.

He also said it should mean a delay to the retail element of the redevelopment by around one month and work can only start once the new interchange and river-side civic centre are complete.  Those projects are going ahead as planned but will not be completed until 2011 so the main town centre redevelopment cannot start until then.

“This has been a difficult decision for the Council to make, but it has been taken with the best interests of the town centre’s regeneration and the people of Rochdale in mind, he said, adding:

“There is real momentum in our town centre plans, assisted by the recent news about Metrolink and the funding approval for the new bus station. A drawn out legal dispute would have led to significant delays to the town centre redevelopment, as well as substantial costs to the public purse. This way we can re-run the process with the minimum delay and with the benefit of knowing the implications of recent case law.”

A developer selection process took place in 2007, resulting in the Council’s Town Centre Committee of elected members choosing Wilson Bowden as the preferred developer.

After the decision was announced, objections were raised by Sultan Properties, owners of the Wheatsheaf Shopping Centre in partnership with Manchester-based developer Ask. The main objection concerned the weightings of the award criteria and sub criteria

All three short listed developers received exactly the same information and the European guidance for tenders known as OJEU was strictly followed – but this did not advise that the award weightings should be released.

However, since the Council made its decision, the Greek case decided by the European Court of Justice ruled the procedure should reveal the weightings. A further English High Court case then ruled on similar issues as the Greek case on 7 July 2008. The Council has been advised that despite happening after Rochdale’s decision, these cases would be considered in any legal proceeding.

After carefully reviewing these two legal judgements, Rochdale Borough Council has taken the decision to re-run the developer selection process rather than become embroiled in a lengthy and costly legal battle which could greatly delay the town centre redevelopment. Sultan Properties has agreed as a result to bring an end to the current legal proceedings.

The Council, English Partnerships and Rochdale Development Agency will be continuing to progress the assembly of the site and the other advanced works, notably the construction of the new Rochdale Interchange bus station and the new civic offices to replace the Municipal Offices (the ‘Black Box’). The prospect of funding being made available for the extension of Metrolink into the town centre is also a major step forward.

Alan Black, Director at DTZ, the commercial advisers to the Council commented:

“This is extremely unfortunate and somewhat ironic – I have been closely involved in many major town centre developer selection competitions over the last few years and, without doubt, the process followed at Rochdale was the most thorough and transparent. The Greek case was decided after the developers’ submissions had been evaluated and, whilst it provides new guidelines on certain technical aspects of the process, it seems perverse that this decision should be applied retrospectively.”

Diane Goodwin, Senior Regeneration Manager for English Partnerships added: “We maintain our support of the Council and Rochdale Development Agency in selecting a preferred developer and will continue to support their land assembly programme.”