Leicester City Council HQ - should we stay... or should we go?
Leicester City Council’s headquarters are literally falling down. So what is the council going to do about it? Adam Wakelin investigates
Leicester City Council HQ is a crumbling corporate edifice that is, quite literally, being kept upright by reams of bureaucratic red tape. It's a line that doesn't trouble the Mercury's lawyers because we're not blundering into the realms of libellous comment.
The above is a bold statement of fact arrived at by Ove Arup – one of the country's foremost structural engineering firms.
Rectangles of red adhesive tape currently cordon off 10 per cent of the council's New Walk Centre (NWC) offices.
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Without those out-of-bounds zones, there to reduce the load on crucial areas, Arup would have slapped a condemned notice on the eight and 13-storey blocks long ago. It may still do that if the situation is not resolved relatively soon.
Like the London Bridge of the children's nursery rhyme, the council's offices are falling down.
Alistair Reid, the council's project director for office accommodation/strategic director for the development of culture and regeneration, is a Scot with a pleasing ability to speak plain English.
"You won't come in one morning and see cracks on the ceiling," he says. "The fear is that one day it (one of the blocks) will just fall down."
Arup, satisfied by the red boxes and bits of structural strengthening, has given the buildings a temporary reprieve. But that's all it is.
A letter from Arup, shown to the Mercury, makes it clear that muddling on won't be tolerated.
"The complacency of maintaining the status quo is not an acceptable position," it states.
The council needs to spend tens of millions bringing the buildings up to scratch. Alternatively, it can find itself somewhere else to live. Do neither and Arup will wash its hands of the council.
"The next stage would be that an insurance company would not insure us," explains Alistair Reid. "We're then at risk of criminal prosecutions. If the building was to fall down, people would be going to jail."
So what to do? Five options were on the table – repair and refurbish New Walk Centre's A and B blocks, build a new HQ in Dover Street, buy the Mercury offices, pull down B block and refurbish A block, or demolish both blocks to put up a new office on the site.
Those solutions have been cut down to two – with a caveat.
Unless something better comes along, or the new elected mayor rips up the proposals, the council will either buy the Mercury building or refurbish A block and pull down B block.
Both have potential benefits and pitfalls – and both are going to cost more than £30 million.
It is the biggest move facing this city in decades – one that could cost or create hundreds of jobs, decimate small businesses, drive forward Leicester's regeneration or cripple it.
And it raises another question. If the Mercury building is the only viable option for a large organisation looking for premises in Leicester, then what does that say about this city's claim to be a place where major firms can come to do business?
Why councillors should heed lessons of history
If the wrecking ball does demolish one or both of NWCs blocks, it will be a fittingly ignominious end to the short and unhappy life of one of Leicester's least-loved landmarks.
New Walk Centre arrived with little preamble in the speculative office building boom of the early 1970s.
"There was an idea that London was becoming too expensive and congested and everything was going to move north," says Alistair.
That idea, of course, went out of fashion faster than fondue sets and tartan bell-bottoms. But it left Leicester with acres of unlettable office space in towers along the ring road.
After decades of thwarted, purpose-built civic centre schemes, the city council bought the vacant NWC offices for £5.25 million in 1975.
Today's councillors – who will all get a vote on its potential replacement – would be wise to heed the lessons of history.
NWC was an off-the-peg solution to the council's difficulties in building a corporate HQ. It was also hugely unpopular.
The ruling Labour group approved the deal while simultaneously announcing a 50 per cent rise in the rates.
Leicester's citizens took their revenge at the next election. Labour were routed.
Thirty-odd years later and taxpayers are once again being asked to foot the bill for putting/keeping a roof over the council's head.
Suing the developer of NWC is not an option, says Alistair, because investigations have not shown the building fails to meet 1970s construction standards. Regulations regarding safety and structural tolerance have moved on, adds Alistair. What was fine back then is no longer acceptable.
"We are accepting the lifecycle of these buildings is 30 years," he says.
So why consider buying one that's even older? The Mercury's offices were constructed in 1968. Because the Mercury is a modest four-floor building, Alistair explains. It is not beset by the problems that can undermine 1970s tower blocks.
Which option makes most financial sense
Time to talk brass tacks. What are the costs and potential implications of the two building options now on the table?
Both assume that the old Bishop Street post office will be turned into a customer services centre and a proportion of the 1,200 staff currently working at NWC – soon to be thinned by redundancies – will work in other buildings owned by the council across the city. The price of buying and fitting out the Mercury building has been put at £31.1 million.
By 2013/14, the Mercury offices will come at a net cost to the council of £1.85 million a year – a figure that factors in the annual mortgage being paid on the building by the council and its running costs.
By 2016/17, the building's net cost to the council will be £0.92million.
The alternative, refurbishing A block and pulling down B block, will cost an estimated £34 million – making it £2.9 million more expensive than the Mercury option.
The net annual cost of this option will be £2.08 million in 2013/14 – £230,000 more than moving to the Mercury.
By 2016/17, the net annual cost to the council of keeping A block and pulling down B block will be £1.2 million – £280,000 more a year than moving in to the Mercury.
So it's a done deal if an acceptable price can be haggled for the Mercury building?
Not quite. Other things need to be considered by councillors – such as what will happen if 1,200 jobs are taken away from the area around New Walk Centre.
Transferring several hundred of them to the Mercury HQ, in St George Street, it is argued, could give a much-needed fillip to the cultural quarter.
The downside, of course, is that stores and businesses which now rely on passing council trade close to NWC could go to the wall.
NWC doesn't have a canteen. Anyone who doesn't bring their own lunch to work puts hundreds of pounds a year into the tills of local sandwich shops. That valuable trade could dry up overnight.
If the council does demolish NWC, it is proposing to set up an urban allotment on the site or turn it into a car park – at least in the short to medium term. Both are hardly likely to delight nearby retailers.
Estate agent Kal Sangra, of Shonki Brothers, who has clients who own shops in the vicinity of NWC, says: "People are worried about losing their livelihoods.''
Ross Grant, the council's Tory opposition leader and mayoral candidate, fears much of Belvoir Street and Market Street could be blighted.
"We've already had a shift in retail emphasis to the Highcross," he says. "Removing staff from NWC might be too much for some of these shops."
And then there is another problem. The council might move its staff to the Mercury building, but what about the people who already work there? Where are they going to go?
What happens to staff in Mercury building?
You won't have seen an estate agent's board outside the Leicester Mercury, but that doesn't mean it's not for sale.
The Mercury's London bosses DMGT – owners of the Daily Mail and a string of other newspapers – are open to offers on our piece of real estate.
If the right price can be agreed "we will sell it", says DMGT property director Lisa Hollanby.
It was only in 2006, that the covers came off a £12.4 million refurbishment of the Mercury HQ. So why is the building suddenly a disposable asset?
Because technology has transformed the production, consumption and economics of newspapers.
It's a fact that fewer letterboxes are rattled by the daily arrival of a Mercury than they used to be, as readers go online.
The mechanics of its production has also changed. Jobs have been lost and the newspaper is now printed more cost-effectively in Derby.
"We've got quite a lot of surplus space in the (Mercury) building," says Lisa. "There is an empty press hall... the entire fourth floor is not being used."
The Mercury now employs 119 people in its St George Street offices. It would be difficult to relocate most of them outside Leicester.
But what of the others who work here? Our parent company has 118 members of Northcliffe Regional Group staff here and another 228 employed by Associated Northcliffe Media Finance Service.
There's no reason why most of those couldn't go elsewhere. It might make commercial sense to transfer them to a DMGT building with spare office space in another part of the UK.
If the council moves into the Mercury, we could be looking at a possible net job loss to Leicester of more than 300.
Former Mercury editor Nick Carter, now chairman of Prospect Leicestershire, which was set up to attract businesses and create jobs, is not going to tell the council where its offices should be.
Prospect Leicestershire will, though, he says, be lobbying to stop jobs currently carried out in the Mercury building disappearing elsewhere.
Mercury building is 'best fit' for council
Should the council opt to abandon NWC and keep a large corporate HQ, it makes sense for the removal vans to be headed towards St George Street.
The 130,000 sq ft Mercury building is the only option on the table in Leicester for an organisation of that size, says the authority's property expert Alistair.
He refuses to be drawn on the merits of the massive blue tower block currently lying empty near the railway station.
The Mercury is the "best fit" for the council, he says.
If Alistair is right, then that's a worry. Think about it.
If a big company wants to open an office in Leicester, where can it go? The options are few. And what does that say about this city's regeneration strategy?
Unfortunately, Alistair is right. That's the view of Jane Taylor, a Leicester-based director of Lambert Smith Hampton, the UK and Ireland's largest property consultancy firm. Unless a major company wanting to bring hundreds of jobs to Leicester commits to a new-build, there is no city centre accommodation for them. Colton Square, opposite the Mercury building, has been a success, says Jane. But that has provided a total of 105,000 sq ft – and much of it is full.
Companies wanting 40,000 sq ft of office space or more have to look elsewhere.
So Leicester, in the depths of the deepest, darkest recession in living memory, is effectively turning work away.
To be fair, businesses aren't exactly banging on the door with enquires like that, says Jane. But they do get them.
Leicester is attracting more interest, but that interest hasn't got anywhere to go. Actually, it has. Birmingham and Nottingham.
It is a problem, admits Prospect Leicestershire chairman Nick. "We have to try to get more quality office space built in the city," he says.
The proposed new office area close to the railway station would have brought massive benefits, believes Nick.
That development remains stalled because £10 million of funding from the now-defunct East Midlands Development Agency fell through.
'Not time for grandiose or vanity schemes'
Politicians don't generally come to power by pledging to splurge large sums of our cash on a new home.
So it's no great surprise to hear that Labour's candidate for elected mayor Sir Peter Soulsby and his Conservative counterpart Ross Grant are cool on the idea of spending £30 million-plus on a move to the Mercury building.
It will be councillors who get the final vote, but it would be naive to think the new mayor won't get his or her way.
"This is not a time for grandiose or vanity schemes," says Sir Peter. "One thing I'm very clear on is that this is a very large sum of money and spending it on a prestigious headquarters building is almost certainly not a sensible thing to do."
Ross Grant agrees with his rival in the red rosette. He's not sure this has been properly thought through. Can the council justify spending all that money, when staff are being handed their P45s?
"I keep hearing we need a high-profile building," says Ross. "Why do we? We're not a brand like Coca Cola. This should be about service delivery and value for money."
Ross says he wants to know a lot more about the calculations behind the options currently on the table. It might be time to think outside the big corporate box, he believes.
Technology means that people don't have to be in the same building any more. There's plenty of scope for teams to be deployed in vacant council properties in the community and for more people to be working from home.
He is yet to be convinced that there is a cast-iron case for demolishing one or both of the NWC buildings.
Sir Peter is similarly sceptical. Rather than take over the Mercury, he would like to see council staff take up residence in empty city centre buildings.
That would save money, he says, and help with regeneration.
It's always tempting for politicians to present council waste and inefficiency as a dark backdrop against which they can shine.
Whether either will be able to hold their position when they're elbow-deep in Arup's building reports or Alistair Reid's carefully worked out options is anyone's guess.
Whatever happens, the right decision needs to be reached. An awful lot rides on it.