THE Disney Store, Debenhams, Thorntons, Topshop, Whistles, Next and Marks & Spencer. Just some of the multiple retailers, who, over the course of the last year in response to the Covid accelerated migration of their customers to online shopping, have taken the decision to permanently close their stores in Glasgow’s “Style Mile” . Nowhere has the impact of the drop in high street footfall been more sorely felt than in the Style Mile’s two flagship shopping centres at the Buchanan Galleries and the St Enoch Centre with an estimated seven per cent reduction in the number of their tenanted stores over the course of 2020 alone – a figure that is bound to increase when the UK Government’s emergency moratorium on landlord enforcement powers and creditor winding-up orders is ended.
The response of the two shopping centres’ respective owners, Land Securities and Sovereign Centros, to the threat posed by electronic retailing to their businesses has been swift and dramatic. Both owners have announced independent plans for the phased demolition of the two centres over the course of the next decade in order to create two new “net zero” mixed use retail, office, leisure and residential quarters within the city centre.
The proposals for the St Enoch Centre have already been taken through a formal public consultation exercise ahead of the submission of a planning application which is likely to be accompanied by an environmental report examining the impacts of the proposed development on the city centre. If an environmental impact assessment of either or both proposals is indeed required one of the matters which the council is likely to be interested in, is the potential impact of the redevelopment of the two centres on the remaining retail offer within the city centre. Much in the same way as the exposure to long-running tram construction works badly affected Edinburgh’s Princes Street retail offer, the prospect of significant engineering and construction works being carried out at the same time at the top and bottom of Buchanan Street over a prolonged period of time may put shoppers off travelling in to the city centre.
Another interesting aspect of the proposals is the advice by the council that it is considering using “tax incremental finance” (whereby a public authority borrows money against the future anticipated increase in business rates generated by a project) as a means of funding some of the enabling work that is needed to deliver Landsec’s project at the Buchanan Galleries. One of the issues which the council will have to consider is whether the use of public money to facilitate the delivery of a privately owned project is lawful. Although following Brexit the UK is no longer bound by EU State Aid rules, the Trade and Cooperation Agreement between the UK and the EU continues to regulate the granting of public subsidy to private enterprises within the UK. Doubtless, this will be a matter of interest to the owners of both centres.
Sandy Telfer is a planning lawyer with DLA Piper