Wolverhampton council to buy city centre Sainsbury's site for £13.1m
The former Sainsbury's supermarket in Wolverhampton city centre is set to be bought by the council in a £13.1 million deal, it emerged today.
The old supermarket – at St George's – has been empty for the past 18 months after the retailer moved to a bigger site at St Mark's.
Now, Wolverhampton council has announced it wants to purchase the site as part of a bid to kick-start redevelopment.
Officers will now start work on drawing up plans for the five-acre site that fit in with upcoming developments on the former Royal Hospital site and the city centre's Westside area.
The money will come from the council's capital budget and will not affect the cash-strapped local authority's day-to-day work on road repairs, social care or education, the council has said.
The plan is to come before councillors next week and is expected to get the green light.
Tim Johnson, the council's strategic director of place, said: "We faced the very real risk of a property company buying the site as an investment and then just sitting on it for up to a decade."
Sainsbury's lease agreement means the firm could keep paying the £1.2m-a-year rent for another nine years.
Mr Johnson added: "A private company could just sit and collect the rent for years before deciding to redevelop. It would become a beacon of ugliness. We weren't prepared to wait.
"In financial terms, we could sit on it ourselves and make back most of the money, but we want a development that will fit in with what is already happening in the city centre. This makes sense. There is a strong financial investment rationale.
"We are not doing this in a reckless way; we are the guardians of public assets."
At the same time as drawing up the plans for the St George's site, the council will be in talks with its chosen development for the Westside leisure project and with the Homes & Communities Agency – which has bought the former Royal Hospital site.
Mr Johnson added: "We felt compelled to act to protect the site and to bring new development, jobs and opportunities to the area. By acquiring the St George's Parade site, we're building on our wider strategic regeneration plans for the city centre.
"While Sainsbury's do not own the site, they're tied into a long-term lease paying a significant amount a year to the owner for the next nine years.
"We will be having discussions with them to see if we can agree a settlement figure which benefits all parties. Obviously this will also significantly reduce the cost to the council.
"We were concerned that someone would come along and leave the site unused for the next decade. That simply wasn't an acceptable position for us. We have ambitious plans, as part of a wider strategy, to regenerate the heart of our city.
"Our medium-term plan is to get in there and kick-start regeneration and market it to potential investors and developers. Hopefully, given improving market conditions, we should see a return on our capital investment through longer-term receipts.
He added: "It's important to point out this is a capital investment, money we have borrowed at very preferential rates to do this.
"Until we've sorted the future use of the site, our investment will see an ongoing return. However, we can't lose sight of the massive dividend in terms of regeneration, jobs and growth."
