Purpose

To consider the report of the Leader of the
Council seeking approval to progress a key gateway development
site.

Decision

(i) 
To delegate authority to the Executive Director, Growth and
Prosperity, following consultation with the Executive Director of
Enabling Services (s.151 Officer), Director of Legal and
Governance, the Leader and Cabinet Member for Economic Development
to: 
 
(a) 
Take all action necessary to approve and facilitate the termination
or transfer of the existing 85 Year lease and to grant a new
250-year lease over the site to the newly formed Limited Liability
Partnership on revised terms that will facilitate development of
the site.
(b) 
Take all action necessary to secure the Council’s membership
of and participation in the proposed Limited Liability Partnership,
including but not limited to agreeing and entering into any
Partnership Agreements and other legal agreements relating to the
Council’s membership, appointing Officers to represent the
Council on the Partnership and to take all steps necessary to
comply with the obligations on behalf of the Council within any
such documentation..
 
(ii) 
Subject to remaining within approved budgets and complying with
relevant regulatory notifications required, to authorise the
Executive Director of Enabling Services (S.151 Officer) to approve
the Council’s financial contribution to the LLP on the terms
set out in confidential appendix 4 as an interest free loan to the
LLP and to approve the elements of the Council’s
contributions to the Partnership and project that amount to a
notifiable subsidy (as set out in confidential appendix 8 on a
‘subject to contract’ basis).
(iii) 
To authorise the Executive Director, Growth and Prosperity,
following consultation with the Executive Director Enabling
Services and Director Legal and Governance to take any decisions
and action necessary, including but not limited to, entering into
related legal agreements, seeking regulatory consents and
notifications and other ancillary matters to deliver the proposals
set out in this report and to enable the redevelopment of the
Maritime Gateway site(s) through the Council’s membership of
a Limited Liability Partnership.
 

Reasons for the decision

1. 
To allow sufficient delegated authority to enable the Council as
part of the Partnership to bring about the redevelopment of the
stalled former Toys R Us site on Harbour Parade which is a key
strategic site at one of the gateways to the city. 
2. 
To utilise the Council’s position as freehold landowner to
grant a lease on revised terms that will support the delivery of
the former Toys R Us site for a mix of uses consistent with its
ambitions for the inclusive growth of Southampton. It is a key
gateway city centre site.
3. 
By participating in the Partnership to facilitate a change in
ownership and control that will secure the delivery of the stalled
Toy R Us site that supports the vision for the City Centre as set
out in the Cabinet report of 28 January 2025 by delivering an
innovation-led scheme focused on health, science and engineering
type occupiers. This demonstrates the Council’s role in
delivering the Southampton Renaissance.
4. 
To enable participation in the delivery of the new proposed scheme
with key Partners thus unlocking significant Economic benefit.
 

Alternative options considered

1. 
The Cabinet decision of April 2024 acknowledged the impact of
macroeconomic challenges faced by construction projects over recent
years and allowed the development scheme additional time to move
forward with delivery as set out in the original Development
Agreement. However, this has not resulted in a positive outcome,
and the development has not progressed to delivery within a
reasonable timeframe, given the impending expiry of the existing
planning consent there would appear to be no prospect of the
consented scheme being delivered within a timeframe that would be
acceptable to the Council.
2. 
An alternative option would be for the Council to deliver the
scheme on its own account; however, this is unrealistic given the
significant financial commitment required including the need to
acquire the existing 85-year Lease from Packaged Living.
Additionally, considerable human resource and specialist expertise
would be required to progress any development activity on the site;
resource and expertise the Council would need to procure.
3. 
In the first instance it is proposed that the Partnership having
achieved control of the site by virtue of the new lease, will
demolish the existing building on the site, invest in public realm
on the site creating the appropriate parts of the Maritime Gateway
parade and also undertake master planning for a mixed use scheme of
regeneration incorporating office, innovation and residential uses.
It is expected that some of this work will be Grant funded.
4. 
The Partnership itself will not undertake development but will
“sell down” individual plots to third parties, with a
view to recovering its investment over a period of time. It should
be noted that the Partners will have a first option to acquire
these plots subject to appropriate valuation safeguards.