Cardiff Council will, next week, give the go-ahead for work to begin on the construction of Cardiff's new bus station in line with the commitment given by the new Administration in June this year.
The Council's Cabinet will meet next week to confirm the new scheme and a new funding approach designed to deliver a modern transport interchange to meet the needs of the Welsh Capital City.
The Council has been eager to deliver a Grade A* office based scheme but until now it has proved impossible to sustain that ambition without securing a tenant in advance of construction.
The Council has, in recent weeks, been working hard behind the scenes to persuade Welsh Government to secure the office component. As a result, an innovative joint venture approach involving the Council, Welsh Government and the Council's development partner Rightacres will allow offices to remain as part of the scheme.
The Council Cabinet met in July and agreed to undertake a full review of the scheme and funding arrangements. The scheme that has been subsequently developed delivers a much improved design and includes a significant office component, more residential units and a new design for the car parking. The ground floor bus station and retail units will be substantially unchanged.
A new planning application will be required to approve the changes, but it is anticipated that the existing planning consent will enable an early start on site.
The joint venture that the Council has negotiated has enabled the office component to be retained within the development whilst allowing a start on site within the timescales announced in June. Without this joint venture, it would have been necessary to rely on a mixed use scheme comprising an element of student accommodation and possibly a hotel. This is no longer the case.
In due course, and as a result of the Council's discussions with both Welsh and UK Governments, this same joint venture - extended to include UK Government, will deliver the wider Cardiff Central Interchange project, including the modernisation of Cardiff Central Station.
During the debate on public transport at the National Assembly this afternoon, the Welsh Government Cabinet Secretary for Economy and Transport, Ken Skates announced the intention for Welsh Government to enter into a formal joint venture with Cardiff Council and their partner developer Rightacres to take this project forward.
The Cabinet Member for Investment & Development, Cllr Russell Goodway, said: "Since May the Council has been working extremely hard behind the scenes, not only to bring forward a plan which will deliver Cardiff's new bus station, but to bring forward a plan that will transform and modernise the whole Central Interchange area.
"There is no doubt that the project had stalled but this new partnership allows the Council to progress with the bus station development without further delays and will enable us to secure a significant office components to meet the needs of potential investors. I said from the outset that we will need to be flexible to deliver this project, using a market-led approach to generate the money we need. This is precisely what we are doing."
Cabinet Secretary for Economy and Transport Ken Skates said:
"Now is absolutely the right time to enhance the station so it can absorb the growing demand for rail travel, cope with an ever expanding calendar of major events and of course set the tone for the forthcoming South Wales Metro.
"We, along with the Council, have a vision for the site around Cardiff Central to become an integrated transport hub, providing seamless integration between trains, buses, coaches and Metro, allowing easy access to pedestrians and storage facilities for cyclists.
"This joint venture can deliver all of these ambitions for the interchange, starting with the redevelopment of the bus station, and for that development to now include high quality space capable of attracting the type of major inward investors who can help us further the ambitions of our brand new Economic Action Plan."
Part of the agreement will be for Transport for Wales to operate the new bus station. This will help to align the operation of the new bus station with the operation of Central Station and the other new facilities being created in the area as part of the wider Interchange project.
The report which will go to Cabinet for approval on Thursday, December 14, makes a number of recommendations including:
Agreeing in principle the new funding model and partnership
Finalising details with the developer for delivery of the new bus station
Beginning the process of securing City Deal money towards the costs of creating the wider Central Interchange
The proposed new scheme will enable a start on site in early 2018 and will see a mix of 110,000sq ft. of Grade A* office space, 400 private rented sector units and 250 car parking spaces above the bus station with retail units on the ground floor.
A Special Purpose Vehicle (SPV) known as the Metro Delivery Partnership (MDP) will be created by the partners outlined above to deliver the project.
Cllr Goodway, added: "It is proposed that the Council's investment in the SPV will be limited to the costs we've incurred to date. This would encompass land assembly, planning and design and other pre-development costs.
"Moving forward we believe partners will be able to recover their investment once the residential units and office space finds customers. We are hopeful this will result in all of the public investment being recouped.
"The Metro Delivery Partnership, as it will be known, is designed to have a longer life and a greater purpose than the delivery of the bus station alone. Once the bus station building is delivered and sold, it is intended that the money is recycled to deliver a second phase of development, including the modernisation of Cardiff Central."
The ground floor of the new scheme remains substantially unchanged, so following approval of the financial model, ground works could begin early in the New Year. It is expected to take around two years to build the new bus station once works start.