Reimagining City Centres

Recent news that profits at the John Lewis Partnership – the doyen of the English middle class – have fallen by 99% should have come as a total shock. However, it barely caused a ripple.

More locally, last week’s sad announcement that iconic music store, Foulds, was to leave Iron Gate after over 100 years, again barely registered.

It seems that, after ten years of continual household name closures, right up to the collapse of House of Fraser last month, we have become immune to bad news from the High Street. 

The simple truth is that the post-war era of retail-led town and city centres is now well and truly over.

Every place – small, medium or large - is going to have to define and deliver a new future for its central area if it is not to become forgotten and virtually abandoned, as were many US downtowns from the 1970s.

The reason behind the decline is generally accepted as being a fundamental and structural change in customer behaviour, initiated by the Great Crash of 2008 and deepened by the exponential growth of online sales, plus the relentless charge of business rates.

Put it this way, every time you (and I) make a purchase online, especially to global giants hiding their income from tax regimes, we are piercing another hole in the heart of our High Street. 

One could argue that today the true British High Street can be seen not in our town and city centres but in the mega-sheds that line our motorway system.

When we press ‘click’ it is here that the purchase is effectively made and our deal is often cheaper as the company will not have to pay the business rates – or in many cases the corporation taxes – faced by the regular store on our High Street.

Central Derby has about 1,000 shops and pre-2008 vacancy rates were generally 5% or less - in other words, a healthy regular churn.

After the crash, increasing numbers of shops closed – most of these national brands from Woolworths to the more recent BHS but also many smaller independents – and vacancy rates grew to as high as 30%+ in many towns.

In Derby, vacancies appear to have stabilised at about 15% - we are by no means the worst city but stand somewhere in the middle.

However, the vacancy rate hides a picture of changing uses – there are fewer traditional retail stores and many more betting shops, pawn exchanges, as well as food and drink establishments.

As a city we simply cannot wish this retail climate change away and all indications are that things are going to get worse, not better.

Expect more shop closures and, if we hit an economic dip, I fear a repeat of some of the vacancy rates last seen after 2008.

Knowing this, our only option is to redefine the purpose of our city centre and then implement strategies that accelerate its delivery.

There is a consensus among commentators that city centres have to become places to live, work and visit if they are to survive, never mind thrive and, in Derby’s case, we have a serious challenge if we are to achieve a balance of these three.

In terms of a place to work, Derby has always struggled as so much economic activity lies outside of the centre. The construction of the 1,000,000 sq ft of new offices – which would have brought 10,000 workers into the city centre every day – never happened.

Derby City Council has dealt with this market failure through its successful Connect scheme providing about 50,000 sq ft of space aimed at smaller companies and will soon deliver a further 30,000 sq ft of quality office space with developer Jensco aimed at medium-sized companies. We have to hope this gives confidence to the market and appetite for more.

As a place to visit, Derby has been stepping up its game in terms of retail – we have risen from 63rd to 24th in national tables over the past 10 years – and our reputation for quality festivals grows.   

To be a place where people live, you have to have housing.

Traditionally, Derby has pushed its population into the suburbs and beyond. We are not alone in doing this but most cities have recognised the need and benefit of having people come into town in the evenings to live.

Derby is in danger of being left behind if we do not accelerate our city living options.

A few years back, the city set off on a strategy to encourage city living and early signs have been good. The start of housing in Castleward, the conversion of empty offices into apartments and the construction of new student accommodation are all starting to take effect.

A successful city centre has to cater for all demographics and to achieve this the next important step in Derby is to see upscale city living. This will predominantly be in new apartments aimed at the many professionals required by our hi-tech employment base.

It has sometimes been a tough sell, but investors have finally shown an interest in Derby and there are now such schemes navigating their way through the planning process.

In Derby, this is not simple, as a small minority oppose city centre developments - on the basis of perceived impact on conservation areas - resulting in schemes being slowed down or even being denied planning permission.

The most significant new proposal is Godwin Development’s 200 unit, 17 storey, Landmark - a top quality Build to Rent apartment scheme on North Riverside, adjacent to the Inner Ring Road which goes to the Planning Committee in October.

Public reaction at the consultation was positive and Marketing Derby, together with many of the city’s leading businesses, are keen to see this approved and built.

The Planning Committee showed a welcome real world understanding last month when it overturned an officer recommendation and awarded permission for the Belgian Frites 33 store to open on St Peter’s Street. 

They recognised that the era of protected retail frontage is over and the exercising of flexibility in use classes is required.

The Landmark is a game changer for the perception of Derby city centre as a place to live and investors, employers and employees will be watching its progress with interest.