Ipswich looks to Futura as new park takes shape
A ONCE-derelict industrial site in Ipswich is being transformed before our eyes.
A landmark John Lewis Partnership building containing a Waitrose and John Lewis at home store has just been completed. It’s a first for the celebrated chain, as it brings together its two retails wings under one roof. And all around the rest of the 44-acre site at Nacton in Ipswich is intense activity - digging, earth moving, planting, road building and other clean-up and infrastructure work.
That’s down to two men - property developers Tony Chambers and Paul Isaacs, chairman and managing director respectively of AquiGen.
Both from the Chelmsford area, they saw an opportunity for the site after a previous attempt to bring it back to life foundered.
Following years of inactivity after the recession put paid to the previous plans, the two have overcome the obstacles, and general pessimism about the state of the economy, and got the site, which they have called Futura Park, back on track.
They admit that when they bought the old Crane foundry site last year, there was a degree of scepticism about their plan to bring the John Lewis Partnership on board.
Some believed they couldn’t pull it off. In fact, the deal had been sewn up by the time they signed on the dotted line for the purchase of the property.
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The two men decided to join forces with a joint venture, which they named AquiGen. Tony owns Aquila Developments, which has around �150million worth of developments and investments and is based at Chelmsford. Paul heads up his own company, Generator Group, based in London. A former NatWest employee, he was in general banking for the first eight years of his career, then went into property lending. He was head-hunted by property development company Frogmore, then formed Generator.
“You needed to create sufficient value to cover the cost of the remediation and demolition infrastructure which for a site like this given it was a foundry site for many decades is a very expensive exercise. That’s what we had to convince the planners of,” explains Paul.
The pair’s latest consent - a 60,000sq ft ‘bulky goods’ complex to stand opposite the John Lewis building - is the second part of the jigsaw. It’s about two thirds the size of the John Lewis site, and is made up of four larger units and two smaller ones. It is set to contain furniture store DFS, Paul Simon Curtains, Furniture Village, Costa Coffee, Carphone Warehouse and a sixth tenant, as yet unnamed.
That scheme has been given the thumbs up by Ipswich borough councillors, and is expected to be completed in July of next year, with work starting in January.
There’s still a sizeable chunk of land left to develop, and Paul and Tony are already turning their attention to getting more tenants signed up for other plots. There is already interest from three or four potential occupants.
More than 200 jobs were lost to the site in 2007, when Crane, an American-owned manufacturer of specialist engineering products, sold the land and buildings to commercial property developer Borderbeach Ltd for around �18m when property prices were at their height. At one time, the site had employed around 700 people, and was a hive of activity, but that had been scaled back over time, and Crane’s decision to vacate the site completely was the final nail in the coffin for the site’s historic use as an engineering works.
There were reports that IKEA might choose to build a store there, but Borderbeach collapsed, and with it hopes that the key site could be quickly regenerated.
“We liked this site when it came to the market and were not successful at the time,” explains Tony.
“In 2007, it was acquired by somebody else. They went bust four years ago. We basically acquired this site off administrators.”
The sale of the site gave Paul and Tony a second opportunity. This time round, and knowing Waitrose well, it was a chance not to be missed. But first, they needed to persuade planners that residential use was no longer a viable option in a saturated market.
“We were driven by the requirement on the retail side and then joined forces with Paul because he knew so much about it,” said Tony.
Paul added: “Last time round it was only going to be up to 25% residential anyway but the way the market has gone housing values have fallen and it would not have been viable.”
They finally bought the site in September last year, but had been working on it for more than a year before that. Once the sale was complete, they were confronted with all the issues around about �7.5million worth of demolition, remediation and infrastructure work, including the installation of roads and services. Bowmer and Kirkland was brought on board to build the John Lewis Partnership stores, while John F Hunt are carrying out the demolition, remediation and infrastructure of the entire site.
“We have had a very long journey before that and were virtually ready to submit our planning application. That got submitted in September last year,” says Paul.
John Lewis Partnership had signed an agreement subject to planning permission, and work began on the �5million build project.
For the second phase of the development, Paul and Tony then cast around for a DIY-style chain occupant for a large single unit opposite. It quickly became clear that they were not going to manage to secure one ‘bulky goods’ tenant, so looked at splitting it up. Those tenants are now secured, meaning that building work, expected to cost several million pounds, can start soon.
Attention can then turn to the substantial remaining acreage. Already, there is outline consent for around 100,000sq ft of around half a million square feet in total.
“Our agents are already engaged but we obviously needed to work in a phased and logical rotation around the site,” says Paul.
Tony adds: “We are talking to three or four potential occupiers who expressed interest in being located on this site - local occupiers who want to expands or relocated whose premises aren’t up to standard or wanting to own their own premises rather than letting. and obviously one or two people from outside Ipswich.”
“It’s a mixture to be honest,” adds Paul. “It’s very early days because we have been concentrating on phase 2 and can now turn our attention on the employment land. Our view always was if we created a destination by creating an anchor, that would make it more attractive to become to as a location.
“I think the fact we have been able to (secure tenants) is testimony to that. Obviously John Lewis and Waitrose is a great anchor.”
Although it now has a small-ish store in Ipswich, Waitrose’s ambition to have a presence in Ipswich is long-held one, says Tony, and they are delighted to have been able to give it the opportunity.
“We are very pleased,” he says. “In these difficult times, money is very difficult to make and very difficult to hang onto. We have concentrated our efforts on where people want to be.
“Waitrose have been trying to get into Ipswich for over 10 years. We found the opportunity. We know these retailers want to be there. We know Ipswich were desperately keen to see a Waitrose and very keen to see a John Lewis about it’s not a department store in the town centre.”
He adds: “Finding premises as an occupier is very difficult. That’s what we do - identify a site by buying it and having an option to buy it, make an application and push it through. We are procurers really.”
The John Lewis Partnership deal was the key one for the site, he says.
“The council specifically changed its policy to allow some retail on it. That retail provided the cash to develop and remediate the site.”
But in a deep recession, nothing is a given, explains Paul, and securing tenants is a challenge.
“It’s really tough, really tough, and it takes a lot of effort and determination to be honest. I think it comes back to they are solid businesses. John Lewis has always been an iconic business model, the culture they have, so every employee is a member of the business, it’s a very successful business model and some years ago they recognised that and started to expand across the country.
“It’s not a small store. You can’t just put that anywhere. John Lewis that’s taken up something like eight acres so actually finding a site that’s suitable is difficult.
“Then you have got the planning and the negotiation we have had about potential damage to the town centre where we have argued the complete opposite. I believe John Lewis is a major draw which will bring people into the town centre.
“This will act as a draw to people who would not ordinarily come here. If we get them here and offer them a shopping experience in the centre, they will go for it. If you don’t, they won’t.
Paul believes there is work to be done to make Ipswich town centre more attractive, but is hopeful for it.
“It’s a bit fragmented and it’s tired and it needs investment. There are a couple of developers trying to get schemes off the ground in the town centre. Provided they are able to do that, it will be great for the area,” he says.
As for the original plans for homes on the Nacton site, Paul believes that was pie in the sky, although he is a fan of the as yet unfinished Ipswich Waterfront, which he believes is “great” for residential and mixed use.
“The residential in Ipswich no one really kept a handle on supply and unfortunately what happened was an over-supply at the wrong point in the cycle,” he says. “Sometimes these things just aren’t cost effective or viable.”
He adds: “I do see hope for it (the town centre). There’s investment required and the good thing is the council are aware of that and they are working on it. Which is why they are working on the town centre action plan.”
Both Paul and Tony have been either fortunate or, more likely, canny, in not being stung by the property recession.
“My background is property bank and insolvency. In 2007/08 we bought very little because we thought the market was mad,” says Paul.
“At the time, we didn’t know whether that was the right decision or the wrong decision. We are very well funded and have very good financial backers and that’s enabled us to carry on where others have stalled. Banks still control so much property because it has been overpaid for. It’s the difference between what has been loaned on a site and what it’s worth and sometimes that’s a very bitter pill to swallow.”
Now, having turned around the faltering fortunes of the Nacton site, transformed what he describes as “ a complete eyesore” and found a suitable spot for John Lewis, he has a few reasons to be cheerful.
“You can’t put that in a town centre and it’s creating 350 jobs. You have not got on a site that’s disused, derelict and has sat there since 2007,” he says.
“I just think it’s great. I’m just delighted that people have shared our vision and bought into our vision. Everyone seemed surprised that we have done what we said we were going to do. You have just got to look at the previous developer who owned the site for four years and had done nothing. People are sceptical of property developers unfortunately and it was: ‘Why are you going to be any different?’ I have not had any negative feedback. I have not had anything other than: ‘This is just fantastic for Ipswich.’”
Paul believes planners and councillors have adopted a pragmatic approach to their scheme.
“They decided the impact on the town centre is de minimus in the scheme of things. The benefit is it’s not only a provision for people who are local. They will make the drive to come to a John Lewis and a Waitrose,” he says.
“Online shopping is the biggest impact on town centre shopping not, whether you have got a John Lewis or Waitrose in town. They understand what their consumers want. They understand they are a customer-focused business and without their custom they don’t have a business.
Paul and Tony’s original business plan was three to five years for completion of the site and that plan is on track, despite the size of their task.
“It was a massive site and there was a lot of work to do. We had to do a lot so the contractors could come on board and the builders could start building. If we had not done what we have done, the store would not be opening this side of Christmas for a start,” says Paul. “It’s amazing and it’s very satisfying to come to site and just see the progress that’s being made. It’s a great professional team - everyone has worked together to deliver this. I will be proud on the day it opens. It’s a big project and we are absolutely delighted.”