Friday, 13 March 2009

A tale of Tesco

Late last year it was revealed that a dispute between Britain’s biggest supermarket and north east council officials over a city centre development had cost taxpayers more than £2 million.
In the light of the attempts to get planning permission through for a Tesco store in Consett before Derwentside District Council is abolished, and fears for the impact it would have on Consett centre shops, it's worth revisiting the affair.
The plans for the former Vaux brewery site in Sunderland were supposed to create 3,200 jobs and bring in £370 million in investment.
But, nearly 10 years after the brewery closed down, the 16-acre site is still just a derelict wasteland.
Meanwhile, the regional development company Sunderland Arc has spent more than £2 million trying to develop the site – including nearly half a million pounds in legal fees.
The figures, which have been revealed under the Freedom of Information Act, have provoked an angry response.
North East Conservative Euro MP Martin Callanan said: “I think the Arc proposals represent a much better development for the people of Sunderland and I would like to see work underway as soon as possible.
However, Tesco seem determined to use their considerable financial and legal muscle to frustrate the proposals and it is their delaying tactics which have incurred most of this bill for taxpayers.”
But Bryn Sidaway, the former leader of Sunderland Council, said: “It’s outrageous that this land is still derelict.
“I wanted the council to buy this site in 1999 but I lost my seat and, for some reason, the council never pursued it. It was a golden opportunity that was wasted.
“If they had, they could have built on it and made money from it. Instead they’ve lost millions and the opportunity to create thousands of jobs and a better environment for the city centre.
“It’s been a festering sore for nearly 10 years now. It’s scandalous.”
Frank Nicholson, the former managing director at Vaux, said: “I look on with huge sadness and dismay that this saga goes on and on and on.
“Why can’t grown-up people can’t sit down and work out a way forward ?
“I don’t particularly want to see a great big Tesco shed on the site but it’s better than nothing if it means bringing jobs and development.
“Why can’t the Sunderland Arc, who have cost taxpayers a fortune, work out a compromise ?”
David Walker, Chief Executive of Sunderland Arc, said: “The stark choice for the city was 600 jobs or at least 3,000 high quality jobs.
“The number of jobs created by our scheme will completely change the city and its economy and we have always felt that this was something worth fighting for.
“The majority of legal fees have gone into supporting our case at two public inquiries to ensure the right framework was in place to support the crucial regeneration we and our partners have planned for this site and the rest of the city.
“The interest we have had from developers has been extremely strong and if you put the figure into context, the money spent to date is just 0.55 per cent of the £370m of anticipated private investment that will be coming into Sunderland city centre.”
Tesco – whose motto is Every Little Helps - is the world’s third biggest retailer, making a profit of nearly £3 billion last year.
The company bought the Sunderland site for £13 million in 2001.
They wanted to build a 110,000 sq ft superstore, alongside shops and homes.
But the plans were opposed by Sunderland Arc, a regeneration company set up by Sunderland Council.
They claimed the Tesco superstore was too big and they wanted more of a mixed development.
Sunderland Arc claimed their plans, which cover a four-mile swathe of land along the River Wear to the A19, would create 3,200 jobs and attract £370 million in investment.
The legal battle has dragged on for seven years now – and is still going on.
In 2006, after a public inquiry, the Government finally approved Sunderland Arc’s plans, which include shops, homes, offices and a court building.
Tesco is now taking legal action through the High Court in a bid to overturn the decision.
A Tesco spokesman said: “We are reviewing our plans but we are still committed to a mixed use on the Vaux site, including a Tesco store.”
Now a Freedom of Information request revealed Sunderland Arc has spent £19,096,090 since it was set up in 2002.
The figure includes £2,054,330 trying to redevelop the Vaux site – with £422,047 spent on legal fees.
In the past, Sunderland Arc has threatened to seek a compulsory purchase order if necessary.

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