Saturday, 14 March 2015

UPDATE: Welford Place developer rumours

Following on from my Day Two at Mipim blog, I've since heard from a good source that one developer has been chosen by the city council for its former HQ site at Welford Place.

Apparently, this developer is currently considering working in partnership with another company.

I'm now almost certain who the anchor tenant will be for the new development. It is a nationally known business with several hundred staff and it would be another significant inward investment coup for the city.

I'll report more when I hear it. Meanwhile, keep a close eye on the Leicester Mercury newspaper and website for the definitive news on the subject

Thursday, 12 March 2015

MIPIM 2015: Pushing for a try or kicking for goal?

Leicester and Leicestershire at Mipim 2015: Day Three

Business delegates taking part in a rugby ball throwing competition organised by Leicester Tigers at Mipim

That's another successful year for Leicester and Leicestershire at Mipim, so what was all the fuss about?

But if you thought the run-up to this year's event was lively, you'll probably want to fasten your seatbelts for the 2016 sequel (I write this while securely fast in the middle seat of a packed flight from Nice to Luton).

It's fair to say Leicester and Leicestershire punched above its weight this year given the £55,000 that was spent, £25,000 of which came from the taxpayer.

The biggest success of the delegation's three-day presence was this afternoon's rugby on the beach event, hosted by England and Leicester Tigers legends Rory Underwood, George Chuter and Louis Deacon. It attracted dozens of people wanting to pit their skills with the oval ball against some of the sport's best-known stars. Many others watched from the sidelines, ensuring lots of attention on the Leicester Tigers branding which covered this section of the Cannes sea front, quite close to the main entrance of the exhibition centre.

The strategy of using the Tigers name to front the private sector side of the delegation was a good one (including a rugby themed lunch yesterday), and something which should certainly be built on for next year.

The question is whether the public sector side - this year represented by six non-elected officials from the city and county councils, and the local enterprise partnership - will be more regionally focused at next year's Mipim. That question will probably be kicked into touch for a while, with a heavily contested line-out expected in the run up to the 2016 conference. A fair few scrummages are then likely between public sector leaders in Leicester/Leicestershire, Nottingham/Nottinghamshire and Derby/Derbyshire before any such deal can be made.

Business leaders I've spoken to over the past few hours are fairly sceptical, but won't completely rule it out. As I said in yesterday's blog, Andy Cliffe, managing director of East Midlands Airport, is the highest-profile Leicestershire business person so far to have called for a more regional focus when it comes to inward investment. Many others agree with him privately, but the issue is politically and commercially sensitive.

The concern is whether an East Midlands public sector delegation will be able to run alongside a Leicester and Leicestershire business one, as an East Midlands private sector delegation is unlikely - that's very commercially sensitive territory indeed.

But at the end of the day, the focus has to be on making an even bigger bang in 2016. Surely joining up with its two regional neighbours will create a stronger pack. It depends on whether Leicester and Leicestershire wants to use the momentum from the past two Mipims to push on for a try, or go for a spectacular kick between the posts.

Before running out of rugby metaphors, I'll say this: you certainly don't get any points for dropping the ball.

MIPIM 2015: Strength in numbers

Leicester and Leicestershire at Mipim 2015: Day Two

Nottingham's headquarters at this year's Mipim. Could they be sharing it with Leicester and Derby at Mipim 2016?

In the run up to this year's Mipim, Leicester and Leicestershire flirted with the idea of combining with the two other major city and county areas in the East Midlands to give all three a bigger bang.

The idea was dismissed as too expensive (being classed as a region instead of a city or county in the exhibition hall sees costs rocket) and politically sensitive.

However, it is looking more likely to happen next year, with Andy Cliffe, managing director of East Midlands Airport, the most high-profile advocate yet for a more unified approach by the region when it comes to attracting investment.

Although Mr Cliffe did not explicitly say he wanted to see a 'Team East Midlands' at Mipim 2016 during his Power of 3 presentation at a Cannes conference hall today, he certainly hinted very strongly at it.

His speech called for the three city/county areas of Leicester, Nottingham and Derby to work closely together to lure inward investment away from London and the South-East and see off the threat of a Government-backed 'Northern Powerhouse' based around Manchester.

His comments make sense, of course. The East Midlands is expected to be the fastest growing economy outside London and the South East this year, having enjoyed the sharpest expansion of any other UK region in the first half of 2014. It is also a well established fact that businesses don't care much for political or historical geographical boundaries.

The region's central location and leading position in hi-tech engineering and distribution means it has a lot more potential for growth, which needs to be exploited thoroughly in a structured and strategic way, states Mr Cliffe. Creating a more formal 'one East Midlands' approach to inward investment is the best way of achieving this, according to Mr Cliffe and many other business leaders, as well as some senior public sector officials.

Whether this means a return to something similar to East Midlands Development Agency - the Nottingham-based economic agency closed down by the Tory-led government and replaced with local enterprise partnerships (LEPs) soon after they took power in 2010 - remains to be seen. A merger of the Leicester and Leicestershire LEP with its Nottingham and Derby counterpart seems unlikely in the short to medium term. D2N2, the combined Nottingham and Derby entity, is currently in the process of creating a more distinct offer for each of the two city/county areas it serves.

Looking more locally, the future of the former Leicester City Council HQ site has been a popular topic of discussion over the past two days. Two businesses have been chosen to develop the 1.8-acre rubble-strewn Welford Place site by the city council. I've heard several different names from various sources over the past 48 hours. An announcement is due by the end of this month.

On the subject of occupiers for the mixed-use, office-led development, one name I was sure was to be a tenant has been shot down in flames by a well-placed source, while I'm finding it hard to get confirmation about another major business name, despite two different people being adamant it will move into the new site. Keep your eye on this blog and the Leicester Mercury newspaper and website for the definitive news on this.

French restaurants are certainly known to be definitive when it comes to the quality of their cuisine, albeit not to everyone's culinary and socio-political tastes. I did my best to reaffirm this stereotype this evening by ordering foie gras for the second night in succession.

Rest assured, no taxpayer coffers suffered as a result.

Wednesday, 11 March 2015

MIPIM 2015: First day blues

Leicester and Leicestershire at Mipim 2015: Day One

It is a measure of how far Leicester and Leicestershire have come in terms of inward investment over the past year that the delegation launched its presence at this year's Mipim with a jobs story most people could relate to.

Insurance firm Hastings Direct's announcement it is to create 230 jobs in the city centre - likely to be at the Blue Tower - marks both another big inward investment coup and the near full capacity of a huge complex thousands of people travel past every day.

Just over a year ago the imposing blue building was still three-quarters empty. Now it has an international student training centre run by Study Group and a household insurance name. This is not forgetting that it includes one of the UK's top 10 best performing Premier Inns.

On the first day of Mipim last year city mayor Sir Peter Soulsby and county council leader Nick Rushton jointly announced a bid for £400 million of public funding for the area, with the promise of tens of thousands of jobs if this was successful. However, there were few details and the sources of funding were diverse and a lot of it was already known about. Although a good message of intent, it was hard to pitch the story above the plethora of investment wins and other major announcements surrounding Europe's largest property conference.

Of course it's always important to do something to announce your presence at an event such as Mipim, where cities, counties and regions all vie for attention. Today's news about Hastings, like IBM's arrival in the city earlier this year, will cause a stir in the property and professional services community both regionally and nationally and help to put Leicester on the map in some major boardrooms.

As I tweeted earlier this evening, Sir Peter and Coun Rushton's decision not to attend Mipim this year has led to some negative comments from business people I've spoken to so far, both inside and outside the Leicester and Leicestershire business delegation. However, I have to say that most of it was fairly measured.

The value of being at Mipim has once again been highlighted to me in my first 12 hours here. I've already heard enough rumour and gossip to keep be busy digging for details and confirmation for many hours next week and beyond.

Before I sign off, I have to thank MDA Consulting for, literally, squeezing me into their dinner at Le Manoir earlier tonight. There's never really a free dinner or lunch at Mipim, of course.

Thursday, 26 February 2015

A Brave New World at New Walk

I took a walk to the site of the Leicester's demolished New Walk Centre at lunchtime yesterday to get my fill of the rubble porn everyone seems enamoured with at the moment.

As most people who have been in this part of the city in the past three days, the absence of those two Soviet-era towering monoliths looming over the skyline seems strange at first. Then you realise that area of the city centre - around the top end of Market Street and at the junction of Belvoir Street, Newarke Street and Welford Place - seems lighter, more airy and less intimating.

I'm sure people with a lot more qualifications than me could better explain the psychological impact of razing imposing 1970s eyesore buildings to the ground, but it certainly seems to have had a positive impact.

Hairdresser Barrie Stephen has already told the Mercury he's delighted with the extra light now flooding into his salon, which lies at what had been the foot of the former city council HQ in King Street. However, I think much of the impact is more subtle.

As I walked around the tangled mess of piled up concrete and metal girders which are strewn across much of the 1.8-acre site, I felt a strange sense of optimism. I think fellow lunchtime strollers also curious to check out the rubble porn on offer also felt the same.
The prospect of something new, shiny and exciting being built on the site of an unloved office complex, which had been condemned almost as soon as it was built 40 years ago, now seems tangible.

But who will be given the job of creating this new development, and, more importantly, who will move into it? I've heard a number of names over the past few weeks and I'm likely to hear more before city mayor Sir Peter Soulsby decides to put us out of our misery some time soon.

As I stared, slightly transfixed by the fact that the kiosk which used to marshal the car park barrier at the back of the old centre had managed to survive Sunday's "blow down" despite being only 10 yards away, a Polish man, probably in his 30s, joined me. "So they've finally got rid of it", he said. "When I came to Leicester nine years ago I couldn't believe you had such an ugly building."

He was quite excited, more so than me and the fifty-something chap who had also now begun peering through the fence. Pulling down monuments to failure and old thinking is probably something he could identify with better.

I hope the new buildings which spring up in its place are to his liking. I hope the businesses which move into them excite him too. This rubble-filled void has the opportunity to excite a lot of people, and the chance should not be squandered.

Monuments to failure can take a long time to get rid of.

Friday, 6 February 2015

Computing the cost of big names and new jobs

Handing out big wodges of taxpayers' cash to multi-billion-pound corporations and business people worth in excess of £100 million is always going to cause controversy.

In the past week we've learned that IBM, Hastings Insurance Services and the Tejani family (who made £140 million from making toilet tissue) have been given £1 million each in Government grants to set up major operations in Leicester.

Another £3 million has been spent by Leicester City Council on refurbishing the city centre office block IBM will occupy.

Why? Well for the reason politians always justify subsidising private sector investments - it's for the "greater good".

The argument goes is that this public money - via the Government's Regional Growth Fund (RGF) - has given these three businesses the confidence to make multi-million-pound investments in Leicester using their own money.

And all this investment means hundreds of new jobs for the city.

So that's at least 770 jobs created by these three firms (including the Tejanis' Leicester Tissue Company) at a cost of about £7,800 in public money per each job. Officials say this figure should fall as more jobs on top of those forecast are likely to be created.

But let's look at that £7,800 figure. It seems like a lot. But when you look at the many thousands of pounds of taxpayers' money it takes to get an unemployed person back into work, it doesn't look too bad value. Also, assuming all those employed are paid £16,000 per year, roughly the minimum wage for a full-time worker aged over 21, the Treasury will get at roughly £1,500 of this per annum.

However, things start to look a little more expensive when you look at the total 1,851 jobs created by almost 200 city and county businesses using £21 million of RGF cash over the past two years. It's a cost per job of £13,000. But I'm sure officials would also want to add the 1,005 of jobs which were also "safeguarded" by this funding. That makes it £8,400.

This figure can be quickly justified when you look at taxpayers handing out an individual Jobseekers' Allowance of more than £3,000 per annum.

Subsidising huge corporations and very wealthy people's businesses to help them expand and create jobs is a hardy perennial of a controversy, just like the giving of tens of millions of pounds of subsidies to major transport groups to run our railways, owners of hundreds of acres of farmland and those producing renewable power.

But what's the alternative? One could assume the purpose of "a regional fund" is to stop all successful businesses gravitating towards major cities such as London, Birmingham and Manchester. Perhaps if they had not been given a Government hand-out IBM and Hastings would have gone to one of those three cities.

Instead, with taxpayers cash to lubricate things along, it is understood IBM ended up with a choice between Leicester, Sheffield, Leeds and our neighbour Nottingham. They said they chose us because of the high numbers of quality graduates coming out of the city and county's three universities. They also liked the cut of the jib of those at the Leicester City Council and Leicester and Leicestershire Enterprise Partnership.

Officials have worked hard for the past few months to land these big businesses and get them to create their jobs here. But should these firms not follow through on the job numbers they have promised, they will have to pay money back or see the funds withheld.

Meanwhile, those who are employed by these businesses are going to be spending many thousands of pounds in the city and county each year, giving the economy a further boost.

I may not possess the computer power of IBM, but those sums look to me to be in the taxpayers' favour.

Friday, 14 March 2014

Mipim: Uprighting those twisted views

Leicester and Leicestershire at Mipim 2014: Day three

Fifteen minutes before my flight back to the UK was due to take off my name was announced over the tannoy of the departure lounge at Nice airport

The guys back at the security check point had my boarding pass. But that didn't matter because I'd taken the precaution of printing off a second one, which I had in my hand luggage. But as I searched my bag I realised I'd also left my iPad (the one I'm now typing into) at security. (It has a grey protective cover, a similar shade to the trays they insist you put your electrical items in as they're put through the scanner - I'll say no more).

Cue me running through a busy and seemingly endless departure lounge against a tide of people traffic and then trying to explain to the security guys why I was back, all the time with the dreaded fear I'd delay the take-off of a packed easyJet flight full of business people, including some of Leicester and Leicestershire's most prominent players and my managing director. Needless to say it's the most stressed I've been for the past three days.

Not that my time at Mipim has been a care-free junket - far from it. I've written a series of stories and blogs, prepared major features for next Tuesday's Mercury Business Weekly, arranged interviews and taken a memory card full of photos. I even helped in a bid to persuade a senior executive with a multi-billion-pound cashpile he was looking to invest to plough some of it into Leicester and Leicestershire. The fact the pitch took place on a £10 million yacht is neither here nor there in the world of Mipim.

"The world of Mipim" is something people who experience the Cannes property conference for the first time repeat again and again. Former England and Leicester Tigers star Rory Underwood, a member of the Leicester and Leicestershire delegation, was heard to utter the phrase a number of times over the past 72 hours.

This is because Mipim is unique in that it offers different things to a diverse range of people. A city and county, led by their senior local authority politicians, go to Europe's largest property fair to showcase themselves in the most cost-effective way they can. Business people who are part of that delegation and have helped fund it also use the event to forge their own business relationships. Smaller, but nimble professional firms, sit on the edges hoping to bump into that potential million-dollar client. Mega-bucks investment managers hire yachts to impress existing clients and woo new ones. And journalists report what they see and hear - but within reason, of course. And that's the thing. If you wanted to do a hatchet job on a senior politician or two or the CEO of a major corporate, Mipim would be a good place to do it. Being compromised in Cannes is always going to make a more sensational headline than being boring in Bognor.

Being a journalist who is part of an official Mipim delegation, as was the case with myself, is unusual. Some would say it's refreshing, others would say it's unacceptable. I would say it's perhaps the best way of having an independent voice explaining how £50,000 of taxpayers' money is being spent to make their area more attractive to major investors, which could help bring thousands of jobs to it. For the impact we had and the contacts we made, it was money well spent, and fairly cost-effective compared to the kind of cash spent on economic development each year by local councils. Some have suggested attending the first-ever Mipim to be held in London later this year could be a good way of combating the negative connotations of going to the south of France. Others point out that accommodation, conferencing and corporate entertainment costs in  the capital would mean it would be more expensive.

As with many things in journalism, my presence on a Mipim delegation partly funded by the public purse is a grey area in a lot of people's minds.

By the way, my grey iPad cover didn't result in me delaying the flight in the end. It was already running late. Ainsi soit-il.

The picture is of a model of a building at the Russian exhibition at this year's Mipim