May11 leeds city region supplement

Leeds CityRegionA Force for Growth

In association with:

Foreword: Leeds City Region..................P2

Foreword: Sarah Day - Managing PartnerLeeds Office, DLA Piper......................... P3

Foreword: Neil Williams - Regional DirectorLeeds Corporate Banking Centre,Santander............................................... P4

City Region Interview- David Parkin interviews LEP ChairmanNeil McLean.........................................P5-7

Growing Optimism on City Region’sEconomic Future ................................P9-11

Building for the Future......................P13-15

Round Table - Singing off theSame Hymn Sheet ...........................P16-18

P2

Contents

The Leeds CityRegion stands ata pivotal point.It is emerging from arecession thatthreatened the financialand professionalservices that had fuelledgrowth in the region andput swathes ofdevelopment on hold,while the abolition ofregional developmentagency YorkshireForward and move to

local enterprise partnerships has put a new emphasison the City Region and, more fundamentally, its businesscommunity, to set the area’s own direction.

In the next few months, critical choices will have tobe made that will dictate how the Leeds City Regionfairs for years to come. What sectors can the CityRegion lead the world in? How can it transform thecutting edge research of its universities into majorbusinesses? Where should scarce public money bespent to have maximum impact? How can the LeedsCity Region become a brand that stands out in acrowded global marketplace for inward investment?What role will physical regeneration have in the neweconomic landscape?This supplement seeks to kickstart some of thoseimportant conversations. Over the next few pages,leading figures from the region offer their views on thefuture of the City Region and the steps that are neededto ensure that we build on the tremendous advancesthat have been made in the last decade.Both DLA Piper and Santander Corporate Bankingare each playing important roles in the growth of theregional economy, making them ideal partners forthis supplement.Despite the slow pace of economic recovery, there aregenuine signs of optimism emerging for the economicfuture of the Leeds City Region. Exciting times lie ahead.

Ian BriggsEditor

Ian Briggs - EditorTheBusinessDesk.com

Foreword:Leeds CityRegion

TheBusinessDesk.comRound Foundry Media Centre,Foundry Street,Leeds LS11 5QP

Managing Director:David Parkin e: [email protected]

Editor:Ian Briggs e: [email protected]

Deputy Editor:James Reed e: [email protected]

Business Development Manager:Aimee Willow e: [email protected]

t: 0113 394 4541f: 0113 394 4322

‘...critical choices will have to bemade that will dictate how the LeedsCity Region fairs for years to come’

TheBusinessDesk.com - Leeds City Region supplement - May 2011


The last few yearsbrought challengingtimes for businessesoperating inYorkshire. But wherethere are challenges,lie opportunities.The Leeds CityRegion hasemerged from therecession in a strongposition, ready tocapitalise on growthprospects andbuild on solid

commercial foundations that have been rocked,but not broken.The way we operate as a business community is evolving.This change is being driven largely by a shift on thepublic-private sector axis; a deeper integration of theprivate sector into the public realm is creating a strongerand more necessary partnership between the two thanwe've seen historically.

Successful collaboration here is key to achieving more.Done well, both sectors will work in synergy to fulfil theirindividual needs whilst realizing the goals of the widerregion. Thanks to its professional capabilities and thepresence of the Leeds City Region Local EnterprisePartnership (LEP), Leeds is perfectly placed to exploit thebenefits this will bring.

Made up of 11 local authorities, the Leeds City RegionLEP is the largest outside London. It represents one of theUK's largest economies - worth £52bn - and is an alliancewhich will encourage future growth and inward investment.The recently announced co-ordinated approach of thethree LEPs for York & North Yorkshire, Leeds and Sheffieldmeans that we are now in an even better position to developand compete with other national and international cities inthe commercial arena.

This unified approach will undoubtedly attract newopportunities to Yorkshire, helping to shrink the longperceived North-South divide and to promote the regionon the international stage. Improved, positive relationshipswill not only encourage business growth, but will workhand in hand to bring an improved social provision.

A number of sectors and geographies have emerged asfundamental to our region's prosperity. Leeds is alreadyrenowned for the strength of its professional and financialservices and encouraging continued growth here shouldundoubtedly remain a key focus. But there remain significant

opportunities for the City Region to emerge as anational and international contender in other sectors.

One area is the waste and renewables industry - already,Yorkshire's private sector waste companies aredelivering cutting edge technology and services. In addition,there is the potential to position the City Region as aworld-class centre for green energy and low-carbonindustries, creating thousands of jobs.

Technology is also a significant growth market whichgenerates new ideas, enterprises and challenges on aconstant basis. A focus here will ensure that our regiongrasps and exploits the huge opportunities that the sector,which includes biotech and biomedical, brings with it.

Combined with added strengths in advanced manufacturingand the creative industries, the Leeds City Region is oneof the UK's most diverse economies. We can provide aworld-class offering in a wide range of sectors andspecialisms and it is crucial that we set our sights oninternational markets to promote these services.

Whilst we remain committed to the local and nationalmarkets in which we operate, DLA Piper Leeds also seesopportunities from international markets and so aims toget closer to these. We have identified specific foreignterritories as being key to our growth aspirations and areworking more closely with our colleagues in Europe, thewest coast of the USA, China and Australia.

Visibility in these markets will reap many benefits.Businesses across the region should be encouraged todevelop and nurture their links overseas, not only tofulfil their export and manufacturing objectives, butalso to encourage inward investment from thesecountries in return.

This approach will ensure the Leeds City Region achievesthe recognition it deserves as a thriving and attractiveplace to do business. Actively encouraging innovation andgrowth and setting its sights on a positioning beyond itsexisting local and national capabilities is key - if successful,the region has the potential to become an internationalcentre fit to rival major commercial hubs across the globe.

Sarah Day - Managing Partner - Leeds Office,DLA Piper

Sarah DayManaging Partner,

DLA Piper - Leeds Office

Unified approach attract opportunities

P3

‘The Leeds City Region hasemerged from the recession in astrong position’



At SantanderCorporate Banking,we are committedto supportingSMEs - not justby providing thefinance they needto expand, butalso throughdeveloping truepartnerships- working withthem to achievetheir goals;

understanding their challenges and helpingthem grow and be more successful.Our Corporate Banking Centre in the centre of Leedsis an ideal base for our teams to support businesses inthe local area and this central location is replicated inHull & Sheffield. Our Relationship Directors are expertsin helping businesses grow and will use their localmarket experience to work with you to find the rightfunding solutions for your business.We can help you access direct investment, additionalsources of finance, and provide solutions to help youinvest in equipment or pay suppliers more efficiently.Most importantly, we work with our customers asbusiness partners and aim to give them the long-term,hands-on local support they need to develop theirbusiness to its full potential.

New lending: a £4bn pledgeFirstly, we can help businesses access finance. Wehave a strong track record on lending and have madea firm commitment to provide new finance for SMEs.In 2010, while overall bank lending fell by 20%, ourlending to SMEs rose by 26%. This year, we havecommitted, as part of the government’s ‘Project Merlin’,to increase lending to SMEs by another 25% and firstquarter results show we are ahead of target.We’re the only bank that has revealed firm targets forlending in 2011 and have pledged £6.7bn in new finance,with £4bn of this directed to SMEs.We want to maintain competitive terms for our funding,in a responsible manner, without unreasonable

conditions. But for Santander Corporate Banking, it isnot all about price.As a sustainable lender, we focus on getting to knowyour business and understanding your potential. Bydeveloping better relationships with our customerswe are able to provide sustainable funding solutionsthat focus on the long-term viability of a businessrather than short-term volatility.

Unlocking other financeOur Relationship Directors and product specialists areexperts in all the sources of finance available to supportbusiness growth.

This includes the government's Enterprise FinanceGuarantee Scheme, offering finance to higher-riskbusinesses, and specialist support for exporters. We’lladvise you whether you qualify, and help you to apply.Asset finance is also available to help you invest innew property, plant and equipment, and invoicefinance, which lets you unlock cash flow from invoices.There are many ways to manage both - we’ll help findthe right ones for you.

Reaching your full potentialThere is no doubt that Santander Corporate Bankingremains committed to the SME market. We prideourselves on building long term relationships withbusinesses in the region which can only be done bytaking the time to truly understand how your businessworks, its aims and objectives.If your business could benefit from this personalapproach to corporate banking, we’d be delighted tospeak to you.

Neil Williams - Regional Director - YorkshireLeeds Corporate Banking Centre, Santander

Neil WilliamsRegional Director - Yorkshire,

Santander

Proud to be committed toLeeds City Region

P4

‘We have a strong track recordon lending and have made a firmcommitment to provide newfinance for SMEs.’



Neil McLean is a man on amission. David Parkinspeaks to the Leeds CityRegion LEP chairman.IT is early days in the life of theLeeds City Region Local EnterprisePartnership (LEP) but its chairmanNeil McLean says he is greatlyenthused by his new role.There is no room for negativityfrom McLean, a no-nonsenseproperty lawyer by background,who recently stepped down asthe long-serving Leeds office headof DLA Piper, one of the world’slargest law firms.

Not even a seemingly unwieldyboard finely balanced with eightpublic sector and eight privatesector representatives can dampenhis enthusiasm for a role that giveshim a crucial position driving theeconomic recovery across the CityRegion, a huge area stretchingfrom Barnsley in the south to ruralNorth Yorkshire.

McLean has now chaired two boardmeetings of Leeds City Region LEP.While he says he is paid a “nominal”sum as non-executive chairman,he has effectively been doingthe job on an executive basissince he took the role.

I point out that his enthusiasm isclearly visible.

“If you can start by creating a realenvironment for growth and bringinvestment into the region theneven on a small scale you aremaking a difference.

“We have to be sensible here.People say that the LEP will sorteverything out - well it won’t. Weneed to be a facilitator to helppeople work together and to makeit easy to do business.

“We can’t do it for people, wecan support and help and directbut whether it works or notdepends on how the private sectorviews the opportunities for businessin the region.

“How easy it is to come here to dobusiness, to find a skilledworkforce? Are we a supportivebusiness community? And that iswhat have to convince people of.”

The board is made up of eight publicsector members, eight private sectormembers “and me” says McLean,who adds that the accord at thefirst board meeting does not

suggest he will have to use hiscasting vote anytime soon.

When it is pointed out that 17people makes a big board ofdirectors, he smiles and pointsout that he currently chairs alarger one. “Leeds City Collegewas 20 members on the boardand it is now 22.”

“I was very pleased with the firstboard meeting. The attitude ofeverybody, there is a real hungerto get on and make progressand identify our investment andgrowth strategy.

He is acutely aware that the LEPcan help provide the focus tohelp the City Region punch aboveits weight.

P5

‘...there is a realhunger to get on andmake progress...’

LEP chairman Neil McLean‘People say that theLEP will sorteverything out - well itwon’t. We need to bea facilitator to helppeople work together...’

Chairman offers LEP vision Focus can help City

Region punch aboveit’s weight



“The City Region has an economyworth £52bn and is larger than thatof nine European countries. Peopleare surprised at that.”

He says there are two things thatneed identifying first: what localauthorities can deliver and what theprivate sector can deliver.

“We will have delivery arms throughthe public and private sector.

“We don’t want to make it toocomplicated but you get some formof structure.”

Big decisions are needed earlyon from the LEP, the key onebeing the location of anenterprise zone, the Governmentinitiative introduced in the Budgetin March.

“The enterprise zone is of benefitto the region because the newbusiness rates that are generatedcan be kept and recirculated withinthe region.

“We want to get people indeveloping quality and generatingbusiness rates and we can use itto pump prime development.

McLean admits that choosing thelocation of the EZ as a “difficult job”.

The Manchester LEP decided lastmonth that it was to site itsenterprise zone at ManchesterAirport.

“If you look at the Manchesterarea they have a successfulinternational airport and it is prettyobvious. In Nottingham, with theBoots campus, pharma is a growingpart of the economy.

“For us it’s a bit difficult, it’s a diverseeconomy, we don’t have one keybusiness area that gives you thatobvious lead.

“Sheffield has steel - but we don’thave one readily identifiablebusiness area.

“It makes decision-making moredifficult,” says McLean, but he hasalready done plenty of work toidentify the key sectors that the CityRegion should look to focus on toprovide it with national andinternational investmentopportunities.

“Everybody is making a lot of noiseabout the enterprise zone but theyare part of a much bigger jigsaw.We need to look at other areaswhere there are maybe ERDFsupport and the TIFs.”

Tax increment financing (TIF) is apublic financing method which is

P6

‘Sheffield has steel- but we don’t haveone readily identifiablebusiness area’

‘...there are two thingsthat need identifyingfirst: what localauthorities can deliverand what the privatesector can deliver’

‘We want to get peoplein developing qualityand generatingbusiness rates and wecan use it to pumpprime development’

Tackling the scale of theLeeds City RegionTHE breadth and scale ofthe Leeds City Region,presents both challengesand opportunities,according to Neil McLean.

On the positive side he says:“Ninety five percent of the workingpopulation live and work in theregion. If you can generate growthin the region the wider benefit willbe to the whole region.

“It’s very much trying to convincepeople that everybodycan benefit within the City Regionwherever the pockets of realgrowth are.

“You have to accept thatinvestment should go to wherethe best return can be becausethe best return will service thewhole of the region.

“If you put it in the wrong placeand it fails then you arebenefiting nobody.

“The far reaches of the City Regionwill also work with other regions.People should not feel that theyare on the geographicaloutreaches.

“We will work with other LEPs.I have met the chairs of theLEPs in Yorkshire and I hope tomeet the chair of Manchesterbecause there are areas we willwork together on.”

‘..everybody can benefitwithin the City Regionwherever the pocketsof real growth are’



used as a subsidy forredevelopment and communityimprovement projects and McLean,highly experienced in propertyand development projects,believes they should be a key areaof focus for the LEP.

He describes the recentannouncement of the firstsuccessful bids for the RegionalGrowth Fund as “confused andconfusing”.

“There did seem to be a bit of arandom selection, both in Yorkshireand beyond.

“We had hoped that the first rounddecisions and more importantly theexplanation of them would be outbefore the round two processopened. But there has been verylittle feedback.”

McLean says that Governmentinvolvement is “improving”.“There is a more concertedapproach from Government, theyclearly want to make it work andhave to make it work.

“There is a cross departmentgroup to talk to to get speedydecisions. They have said they wantto listen to business and put fleshon the bones.”

He says he has not put a time limiton his involvement with the LEP.

“My agreement is that we will reviewit after a year. We didn’t knowwhether this would work out andwhether I was right for the councilsand they are right for me.

“Let’s be realistic, some of thestuff we are talking about is 10, 15,20 years ahead.”

He says “two to three years wouldseem sensible” for his tenure.

McLean says that the early daysof the LEP are crucial, to get it“set up well with clear objectivesand clear deliverables”.

When asked what he would like toachieve in his time as chairman, hesays: “Not in specific terms, insimplistic terms what you have gotto see is the area working closelytogether to deliver economic growthand employment growth.

“We have had a far too fragmentedeconomy and far too fragmentedapproach in the past.”

He feels the relatively new teamat the top of Leeds City Council,leader, Labour councillor KeithWakefield and chief executiveTom Riordan, is a benefit.

“I think it’s a help they are both opento change. One of the issues weare talking about is a change ofmindset. We have to get peoplethinking in different ways.

“We have got to have someradical ideas. I think Tom going intothe authority, he knows the region,is well connected, Keith issupportive of change.

“And neither do I have anyconcerns about any of the otherleaders,” he adds quickly, showinghis skill for diplomacy.

P7

NEIL McLean isrealistic when hesurveys the challengesahead for the LEP. Hesays the City Regionhas been “going alongnicely” for years butmust up its game.“It won’t be easy. Leeds hasin some ways talked about itsposition for years and yearsbut has performedeconomically below that.

“Leeds has done well legallyand financially but relied toomuch on that and not focusedon other sectors enough.

“We have had trams,economic districts [haven’thappened]. Real economicprogress - can you remembera lot? Not really.

“We have been goingalong nicely but we have beentelling ourselves that we area great international city. Wehave to be harshly realistic.

“The job is to get publicand private sectors workingtogether.”

Part of it has beencomplacency and I don’t thinkwe have had the dynamic civicleadership with clear aimsand ambitions that haveconvinced the private sector.Other cities have made iteasier to do business, that hasput people off.

“I don’t really think we havebeen hungry for business,”he adds starkly.

‘...what you have gotto see is the areaworking closelytogether to delivereconomic growth andemployment growth’

‘One of the issueswe are talking aboutis a change ofmindset. We have toget people thinkingin different ways’

What liesahead forthe LEP

‘Other cities havemade it easier todo business’



P8 TheBusinessDesk.com - Leeds City Region supplement - May 2011


BEFORE the globaleconomic landscapechanged three years ago,the Leeds City Regionwas flying high.

Development was widespread,Leeds itself had successfullypositioned itself as one of theleading financial centres outsideof London, and the localeconomy was thriving and givenan additional boost by aprolonged dose of significant publicsector spending.

The credit crunch threatened toturn all that upside down. Iconicprojects such as the “kissingtowers” went on hold, suddenlyout of tune with the rising mood ofausterity, and grim predictionssurfaced that this would be arecession that targeted the whitecollar industries.

A new Government dramaticallycutting public spending andcommitted to ‘rebalancing’ theeconomy away from financialservices posed a further threat.

The reality of the last three years,however, has not been anywherenear as grim as the doommerchants suggested, according toHoward Kew, chief executive ofFinancial Leeds.

“During the healthy phase of theeconomy in the first eight years ofthe century we saw compoundgrowth in the sector of around 6 or7% over that period. Then we hitthe buffers and I think there was alot of concern that having achievedabove average growth that thatcould get reversed very quickly.

“But thedoom andgloom ofJanuary2009, afterthe autumnand winter ofdiscontent,didn’t come topass. Overthe course of

the financial crisis and immediateaftermath we outperformed the restof the UK and particularlyoutperformed London.”

That gap in performance was thedifference between losing 17,000jobs in the regional economy.According to Kew, the diversity ofthe financial and professionalservices and a creative approachtaken by firms - cutting hoursrather than jobs and seeking newmarkets - helped the City Region’sresilience.

But with a Government intent onreducing the economy’s reliance onfinancial services, doesn’t that posea real problem for an area that hasput itself in that space?

“We talk about the rebalancing awayfrom financial services but if youlook closely at what is said byGovernment, they are not talkingabout downsizing financial services,they are talking about greatergrowth in other areas.

“For all the emphasis onengineering, manufacturing, lowcarbon - all of which areimportant - the biggest engine forgrowth remains financial andprofessional services.”

That optimism is echoed bySarah Day, new managing partnerat DLA Piper’s Leeds office.

“What we have seen over the last18 months is a lot of corporateactivity. In the last five or sixmonths we have seen an upturn

P9

‘...we outperformedthe rest of the UKand particularlyoutperformed London’

Growing optimism on City Region’s economic future

Bridgewater Place has helped boost the image of the Leeds City Region

Howard KewChief Executive,Financial Leeds

- by James Reed



P10

in peoplegoing to thedebtmarketsagain.

“There’s still anervousnessaround. Ourlitigation and

restructuring teams are very busybut there is much more optimism,albeit cautious.”

Looking ahead, Day says thefirm is expecting to see growth insectors such as wastemanagement and energy as wellas financial services.

She also forecasts opportunities for

business in the region as the publicsector withdraws from directprovision of services. “Wherethere are challenges there areopportunities and one of things we

know the new local enterprisepartnership will be looking at is thepublic-private axis and we thinkLeeds is very well placed to makethe most of that.”

While the creation of localenterprise partnerships has put anew emphasis on localeconomies, Day is keen to seethe City Region continue to projectitself as part of a much broaderarea, particularly in the inwardinvestment context.

“If you are looking at inwardinvestment Leeds is tiny on aglobal scale but as soon as youexpand that you have got a veryattractive proposition. When youare trying to compete with Chinathey are not going to be lookingat 1.1m people but they are goingto be interested in a wider areathat has great manufacturing,professional services, energy,expertise and so on.”

Sarah DayManaging Partner,

DLA Piper

Leeds: an example for others of future growth in the UK

‘...we expect to seegrowth in sectorssuch as wastemanagement andenergy as well asfinancial services’

For more than 150 years,David Brown GearSystems has beenadapting its gear expertiseto the demands of newtechnology.And as the green energyrevolution begins to pick up paceit is doing so again with a newfocus on wind turbines.

“If you had to characterise whatthe core of our gear making it isthat we specialise in supplyingcustomers who need an absoluteassurance against failure. Theyneed to know that once we haveinstalled our gearing it is notcoming out again,” says IanFarquhar, managing director forwind energy.

“Turbines are typically justified onthe basis that they will last for 20years and yet their gear boxestypically need repairing after sixto 10 years. But we know that ourgear boxes for other applicationsmight last for 40 to 50 years.”

Initially focusing on overhauling

and upgrading gears in existingwind turbines, the company hasalso started developing its ownproducts in the field targeting thegrowing offshore market.

It has also worked with the LeedsCity Region Local EnterprisePartnership and Kirklees Councilto successfully bid for £2m ofGovernment funding to helpestablish a new research andinnovation centre that will helpdemonstrate the company’sexpertise to potential clients andfoster collaborations withacademics from the University ofHuddersfield.

“We see this as a new growingmarket where we can set newstandards,” says Farquhar.

Historic company looksto the future

‘Turbines are typicallyjustified on thebasis that they willlast for 20 years...’



P11

Nicola Spence sees that ability towork across the City Region and

beyond inorder toappeal to thewider world ascritical to thesuccess of thelocaleconomy.

As chiefexecutive of

Science City York she is well-placedto identify the sectors where theLeeds City Region could lead in theUK and even the world. She pointsto healthcare, digital technology andbioscience as just some of theareas where the City Region boastscutting edge expertise.

But she argues, importantbuilding blocks need to be put inplace if the area is to achieve itspotential.

“We need more inward investment,to attract some major businessesthat others can cluster around.We have to work much harder atshowing business it is easy to comeand work with us, it is easy toaccess the knowledge we have.We need to make it as easy aspossible to have the conversationsthat produce ideas that turn intobusinesses or collaboration.

“We have got eight universities inthe Leeds City Region and threeof the top 10 in the UK so we haveto ask why we are not doing as wellon inward investment as otherparts of the country?

“We also need to ask what arethe pieces of infrastructuremissing, what are the roads andthe other forms of transport we needto make it easy to do businessacross the City Region?”

For Spence, these issues arecrystalised in the debate aboutthe location of the enterprisezone earmarked for the CityRegion.

“We need to decide how we aregoing to make the most of thisexciting opportunity - not, asperhaps we might have done inthe past, looking at somewherethat’s really not doing very welland needs something . Let’sfocus our efforts where we canput an enterprise zone that canreally accelerate the economyand attract businesses, start-upsand spinouts.”

‘...what are the roadsand the other forms oftransport we need tomake it easy to dobusiness across theCity Region?’

The economic outlook- an SME perspective

Companies in the Leeds City Regionare working harder each year togenerate the same level of business. But it’s tough out there.

The economy is unlikely to bounce back to pre2008 levels in the near future so businessesneed to react accordingly.

A major impact for business owners is that,more than ever, they scrutinise all spend,

particularly that which doesn’t directly generate revenue. That putsparticular pressure on areas like IT.

The challenge for companies like ours is to turn these threats intoopportunities. In our case we’ve reshaped the firm to enable businessesto harness the benefits of technology without drawing theirattention away from the front line and rebranded from NetworkIntegration to ITogether to betterexplain how we work.

It is the regional firms that candemonstrate that ability tochange quickly to meet newexpectations that will continueto thrive even in the challengingtimes ahead.

Jonathan Hirst, partner,ITogether.

Jonathan HirstPartner, ITogether

‘...we’ve reshapedthe firm to enablebusinesses toharness the benefitsof technology...’

‘We need more inwardinvestment, to attractbusinesses that otherscan cluster around’

Nicola SpenceChief Executive,

Science City, York



P12 TheBusinessDesk.com - Leeds City Region supplement - May 2011


Property development andconstruction may havebeen hit hard by theeconomic downturn but therole of physicalregeneration to drive theeconomy cannot beunderestimated.Take a look today around the LeedsCity Region’s towns and cities andfor many observers the perspectivesmay appear bleak.

At many sites work has stopped, orin some cases never started, as theeffects of public sector spendingcuts, bank financing restrictions anda loss of confidence in the sectorare all too visible.

But despite national headlinespainting a bleak picture ofdevelopment, there are signs in thisregion that things are picking up.

Cranes can once again be spottedon the horizon and scaffolding is afamiliar sight at many sites whichhave sat idle since the peak of theproperty boom came to ashuddering halt in 2008.

Work has commenced on one ofBradford’s key regenerationprojects, the six-acre City Park,giving the city a boost as Australiandeveloper Westfield’s proposedBroadway development in the citycentre continues to falter.

In Wakefield, the £100m WaterfrontWakefield project features a mixof high-quality offices andresidential buildings and a £26m

gallery and centre for creative arts,The Hepworth Wakefield, as wellas new space for cafes, barsand restaurants.

Also in the West Yorkshire city,the £140m Merchant Gatedevelopment’s second phase isunderway.

Developer Hammerson recentlyannounced the submission ofnew plans for its major 1m sq ftEastgate Quarters retail scheme,and construction work is onschedule at the 13,500 capacity

Leeds Arena.

Across thecity, a majorsign thatconfidence isreturning tothe market isshowcasedat LandSecurities’Trinity Leedsdevelopment,

where work is on schedule forcompletion in spring 2013.

Gerald Jennings, Land Securities’portfolio director for the North, saysthe morale-boosting effect ofphysical regeneration cannot beunderestimated.

“There’s a certain confidence that

comes from physical work goingon,” says Jennings. “It’s quiteeasy to say what you’re going todo in terms of ambitions, but it’sdifferent to do it.

“But when you see somethingbeing constructed it gives realityto these visions and people do thenbelieve it. The consequence ofthis is that when people seesomeone else getting on with itthey think ‘perhaps we ought tostart doing it’.”

Jennings believes other schemesare now coming out of the groundas a direct result of Trinity Leeds.

“You’re creating a virtuous circleand the circle gets bigger. It reallydoes come down to people seeingphysical work come on.”

Guy Barlow, head of the Leedsoffice of architects The ManserPractice, also believes that physicalregeneration can act as a catalystto help drive economic recovery,

‘Cranes can onceagain be spotted on thehorizon and scaffoldingis a familiar sight...’

P13

‘...other schemes arenow coming out of theground as a directresult of Trinity Leeds’

Building for the future Physical regeneration can

drive the recovery - by Ian Briggs

Gerald JenningsPortfolio Director - North,

Land Securities

Bradford’s key regeneration project, the six-acre City Park



P14

but only when it is “approached inthe right way”.

“It is not a panacea, but it cangenerate employment inconstruction in the short term, thencreate jobs in the longer term andhelp stimulate growth,” he argues.

Tim Field, who leads DLA Piper’sLeeds property team, sounds a noteof caution: “It’s very fragile out there;there’s no getting away from that.However, we are seeing some upliftand signs of activity. We’ve beendoing some interesting work andbanks are looking at doingtransactions.

“However, those doing deals havegot to be certain that everyconceivable angle has beencovered. That fragility is there buta lot of people are trying to workthrough these issues to get thesedeals done.”

Field said active sectors looking forproperty are healthcare, energyfrom waste plants and transport andadded that he is seeing an upturnin activity for new developmentsand also SMEs moving into existingpremises as business improves.

Nikolaj Dockree, of Ripley Capital,a Yorkshire-based business whichworks with investors and partnerson the acquisition and ongoingasset management of commercialproperty and development sites,says that despite some “inertia” inthe investment market, the Leeds

City Region iswell placed.

Ripley hasacted for anumber ofinvestmentfunds whichhaveacquiredproperty in

the region and Dockree believesdeals will continue because of theamount of “high quality kit” availableand the good value they represent.

“The Leeds City Region has offeredrental growth prospects and goodopportunities for money coming intothe region as well as secure incomestreams,” he says.

“This all does position the LeedsCity Region very well going forward.From an occupational point of viewthe region is in a good position tocope. Private sector investment willcontinue to drive the region.”

Funding for key infrastructureprojects, such as a southernentrance to Leeds railway station,

Nikolaj DockreeRipley Capital

Trinity Walk - Wakefield

Pin factorytower pointsaheadTower Works is aproperty steeped in thepast but its role today isvery much looking tothe future.Work has commenced to create18,000 sq ft of commercialspace at the historic formerpin factory, dating from 1864,in Leeds.The current phase of work atTower Works involves thestabilisation of one of the threelisted chimneys and restoration

and conversion of two listedbuildings with new buildelements, which will provideserviced office accommodationand community space.The redevelopment will createoffice accommodation tocomplement the RoundFoundry Media Centre atHolbeck Urban Village.The future of the mixed-useTower Works scheme hadbeen cast into doubt becauseof cuts to public sectorspending and as a YorkshireForward asset the regionaldevelopment agency hasstated it would like the site tobe transferred to council control- a move refused by Ministers.However, despite ongoingworries about its futureownership, development workat the historic complex iswelcome and is a confident signthat the Leeds City Region isinvesting in projects that willdrive economic growth.

Tower Works: future developmentrestoration project for Leeds

‘The Leeds CityRegion has offeredrental growthprospects and goodopportunities...’



have been given the green light andcommentators believe schemessuch as this, and transportimprovements, can drive physicalregeneration and vice-versa.

Jennings believes a number ofconditions have to be in place tocreate successful developments.

He says: “There’s been a schoolof thought that providing a buildingis the be all and end all. We’vebuilt buildings and thought it’sbeen a regenerative force for goodbut some high profile structureshave remained empty.

“The location has to be right; theinfrastructure has to be right; therehas to be a supportive planningregime and a demand for the projectbeing produced. The keyfundamentals need to still exist.”

Asked which factors would helpthe property sector recover anddrive regeneration in the LeedsCity Region, Field said therewould need to be a combinationcoming together.

These include banks increasinglending, the return of consumerconfidence, the slowdown ofcompanies facing restructuring orcollapse, a number of NationalAsset Management Agencyproperties coming onto the marketfollowing the collapse of the Irishproperty sector, the creation of anenterprise zone in the City Region,and the use of Tax IncrementFinancing (TIF).

How regeneration schemes are tobe financed is currently a hot topicand TIF - through which theGovernment will lend to councilsagainst the promise of increasedrevenue from future businessrates - is being seen as a vitalway for property and

regeneration projects to get started.

However, the timetable for theGovernment’s planned introductionof TIF legislation, which is alreadyavailable in Scotland, remainsuncertain and question marksremain about how it will work.

Martin Farrington, director of citydevelopment at Leeds City Council,says: “A new funding mechanismlike TIF is important. The privatesector is still risk averse and thebanking sector still hasn’t fullyrecovered. The public sector doesn’thave the funds it once couldgenerate to make things happen.

“A mechanism like TIF is anexample of where cash could bebrought forward to invest in theinfrastructure challenge.”

Jeff Pearey,head of theLeeds officeof propertyagent JonesLang LaSalle,who believesemphasis willbe put onnew propertydevelopmentbecause of a

recent “stasis” in the market, adds:“I think TIF could help to a degreebut I think traditional financemethods will come back. And we’reon the eve of them coming back. Itonly needs one or two funds comingback in for it to get going.”

Collaboration is the watchword formany members of the region’sproperty community, who want tosee towns and cities work moreclosely together to boost the CityRegion’s property prospects.

Jennings points across thePennines to Manchester where anumber of towns have been happyto align themselves together tocreate a powerful brand for potentialproperty investors.

“There is perhaps a bit more of aparochial manner in the Leeds CityRegion and independence can bepositive but it doesn’t help thecollective,” he says.

“There’s huge benefits of thesetowns and cities approaching it ina more collegiate way and they dohave to appreciate that Leeds isthe predominant commerciallocation in the City Region.”

Pearey, who has called for a‘Greater Leeds’ brand to be created,adds: “Collaboration is a really bigdiscussion point because there’s astrong view that we would do betteras a region if there was anacceptance that Leeds is theheartbeat and everything else withinthe City Region will grow andflourish as a consequence ofLeeds’s improving economy.”

Alex Munro,the head ofcommercialagencydevelopmentat KnightFrank inLeeds, said:“There hasbeen strongleadershipfrom officers

within the local authorities and theleaders and we need them to bebold and lead from the front.”

The Government’s decision foran enterprise zone, offeringrelaxed planning rules, superfastbroadband access and businessrate discounts, to be located inthe Leeds City Region gives thepotential for a major boost to theproperty sector.

Farrington suggests that theLeeds City Region enterprise zonecould generate more benefits if it issector specific, potentially focusingon green sustainable or healthmedical markets.

P15

Alex MunroeHead of Commercial

Agency Development,Knight Frank

‘...superfast broadbandand business ratediscounts are locatedin the Leeds CityRegion...’

‘Collaboration is thewatchword for manymembers of theregion’s propertycommunity’

Jeff PeareyHead of Leeds Office,Jones Lang LaSalle



THE Leeds City Regionmust establish a “script”that can be backed bybusiness and set realistictargets if it wants to beseen as a leadingeconomic player acrossthe globe.That was the key message toemerge from a Round Tablediscussion of leading advisers,financiers and business peoplewho debated the future of theLeeds City Region. The eventwas held at the Leeds offices oflaw firm DLA Piper.

With the abolition of regionaldevelopment agency YorkshireForward and the creation of a localenterprise partnership in the CityRegion, panellists called on thebusiness community to set thearea’s own direction.

How to make the best of the CityRegion’s world leading attributes,such as the cutting edge reserachcoming out of its universities, wasdiscussed, as were sectors includingmanufacturing and professional andfinancial services.

There was also a collective callfor the different local authorities

within the City Region to workmore closely together, as, it was

argued, is the case with Manchesterand its neighbouring towns.Neil McLean, chairman of theLeeds City Region Local EnterprisePartnership, described the CityRegion as a “very entrepreneurialarea”, with a strong businessstart-up agenda.However, McLean said moreneeded to be done to promote theCity Region’s brand and image, bothin the UK and overseas, to helpattract inward investment, and hecalled for more focus to be given toidentifying the “key priorities” toachieve this.“There is lots of dynamism but Ithink the image from the south isanything but that,” he said. “But whatdo people want to know that willattract them here? Could we attracta Microsoft, Apple or SunMicrosystems?

Singing off the same hymn sheet Collective voice and achievable

aims needed for City Region’ssuccess - by Ian Briggs

Round Table: Wednesday 18th May 2011

Attendees:David Parkin- Managing Director,TheBusinessDesk.com

Neil Williams- Regional Director forYorkshire, SantanderCorporate Banking

Nick Machugh- Relationship Director,Santander Corporate Banking

Sarah Day- Leeds office ManagingPartner, DLA Piper

Neil McLean- Chairman of the Leeds CityRegion Local EnterprisePartnership

Nikolaj Dockree- Director of property assetmanager Ripley Capital

Jeff Pearey- Director and Head of Leedsoffice, Jones Lang LaSalle

David McNicholas- Financial Director, AFI-Uplift

Roger Marsh- Senior Partner, PwCLeeds office

Gerald Jennings- Portfolio Director,Land Securities, Leeds

P16

‘There is lots ofdynamism but I thinkthe image from the southis anything but that’



“We need something to hang themessage on. The potential is huge.We need to package it and weneed to sell it.”

There was agreement around thetable that clear targets had to beset for the Leeds City Region to besuccessful.

Roger Marsh, senior partner in theLeeds office of PwC, argued thatunder Yorkshire Forward, theregional development agency thathas been scrapped, too many goalswere set that weren’t achievable.

He said: “We ought to be saying theeconomy in the Leeds City Regionis going to go from £52bn to £65bnor whatever.

“Manchester has a hymn sheet andis singing from it. We need to do thesame to bring together the powersof this region. If you can set realisticobjectives and a small number youcan achieve them. The Leeds CityRegion has 143 initiatives and thatis not very prioritised.

“For example we could say let’s putLCR on the BRIC map. That’s prettypowerful and better than saying let’sbuild something in Heckmondwike.

“We should be saying to peoplein London come up and see theLCR. And when they do, let’s havethe script we have been talkingabout. The RDAs tried to doeverything but did nothing and

spent a lot of money doing it.”

David McNicholas, financialdirector at Wakefield-based liftand safety equipment businessAFI-Uplift, agreed but said moreneeded to be done to engage withsmall businesses.

“I agree there needs to be a script.We need to be clear on it and sellit. For many SMEs this is going tobe a massive engagement job andif you have the script for these smallbusinesses it’s what they’re after. Ifyou can’t explain it in 30 secondsyou’re in trouble.

“We’re a £36m turnover businessand it’s about how the LEP willengage with us. For example we’restruggling to recruit young people.”

Neil Williams, Yorkshire regionaldirector for Santander CorporateBanking called for “output targets”and “priority sectors” to be set in theCity Region.

“Let’s take an aggressive agendato government and tell them aboutthe toolset we need,” Williams said.

“Everyone is on the same pageabout what we need to do. The LEPis the co-ordinator to bring thingstogether. We’ve got a realopportunity. Be it the public orprivate sector side everyone wantsto pull in the right direction.

“Customers at present are sayingwhat’s needed of me, can Icontribute and what are thebenefits of the LEP? It’s ineveryone’s interests to get theCity Region going.”

McLean, who described the LeedsCity Region as a “world stageeconomy”, added that a key role forthe board of the LEP was to workclosely with the private sector.

“The key job (for the LEP) is tostart pulling all these themestogether, selling it and promoting itbetter - upskilling it more. We alsoneed to get the private sector backto investing.”

McLean said he had beenimpressed by the “dynamism” of theprivate sector in the North West andasked if there was the same buy-inin the Leeds City Region.

“The private sector has been askingwhat is the LEP going to do for us?And that’s the wrong question. TheLEPs have been set up in a blazeof publicity but with no structure.

P17

Sarah Day - DLA Piper Leeds office Managing Partner

‘If you can set realisticobjectives and asmall number you canachieve them’

TheBusinessDesk.com’s David Parkin ‘...a key role for theboard of the LEP isto work closely withthe private sector’



And there’s a level ofmisunderstanding (about the LEP).

“The right question should be‘what can we do together torevitalise the economy?’. It’sabsolutely a partnership.”

Marsh said the LEP couldbecome “a lubricant” to help theCity Region achieve its goals whenthey are drawn up.

“On a national level we need to seethat Britain is open for business andthen what needs to happen is forthis region to come out and saythese are the kinds of business wewant to attract here,” he said.

“If you look at Yorkshire thereare some unique facets; let’s seethem as a core from which toachieve things.”

Sarah Day, who has taken over fromMcLean as the new managingpartner in the Leeds office of DLAPiper in Leeds, said that instead ofcompeting with Manchester, theLeeds City Region should takeadvantage of its benefits and Daycalled on businesses to make moreuse of its infrastructure benefits,such as its airport.

“We’re a bit behind the game interms of this region thinking as aregion,” she said. “At DLA Piper,local business is important to usand it’s important we have a local

location as an office. I can very muchsee us working together as a regionand I think we can only benefit.”

She cited the opportunities that windenergy will provide across the CityRegion and called on the media tobe positive about its prospects.

Nikolaj Dockree, of Yorkshire-basedproperty asset manager RipleyCapital, said the LCR was a “poorcousin” to other areas in terms ofinfrastructure and said this was avital area for improvement. He alsosaid corporation tax rates wereputting busineses off from locatingto the region.

He said: “Infrastructure needs tobe driven by the LEP as Leedshasn’t achieved in this fieldpreviously. Someone really needsto drive this forward.”

Gerald Jennings, Land Securities’portfolio director who heads thecompany’s Leeds office, suggestedthe City Region should harness thedelivery of the Trinity Leedsshopping centre and Leeds Arena,

which are both set to open in 2013.

He said: “It’s about harnessing thatwillingness of having a partnershipand then delivering it because talkis cheap. We have a mind-set thatsays ‘why not’ rather than ‘why’.”

Jeff Pearey, head of the Leeds officeof commercial property agent JonesLang LaSalle, said he had helpedto produce a ‘top 10 facts’promotional pack about the Leedsoffice market and a similarapproach would be welcomed forthe City Region.

Pearey said although the officemarket in the City Region waslargely flat, there had been anincrease in demand from recruitmentand training providers, which hesaid was a positive sign for theregional economy.

“I’m delighted about theconversation around the tablebecause it’s so important to getthe key focus started and theright messages for the LCR.Let’s keep developing that scriptas it’s so essential.”

McLean added: “If you can showthings are being delivered thenpeople will stay enthused. This is a20 year project or so at least andcould potentially have no end.”

P18

Gerald Jennings - Portfolio Director, Land Securities, Leeds (left), Nikola Dockree- Director of property asset manager Ripley Capital (right)

Neil Williams - Regional Director for Yorkshire, Santander Corporate Banking explains

‘I can very much seeus working togetheras a region and I thinkwe can only benefit’

‘it’s so important toget the key focusstarted and the rightmessages for the LCR’



May11 leeds city region supplement

Business

Transcript of May11 leeds city region supplement