Decision details

Having complied with paragraph 15 of the Council’s Access to Information Procedure Rules.

(i)  To delegate authority to the Executive Director, Growth and Prosperity following consultation with the Leader and Cabinet Member for Economic Development.

(ii)  To take such steps as are necessary to terminate the existing Development Agreement with Packaged Living in order to ensure that the site is unencumbered should a third party elect to proceed and agree terms to acquire the site and / or in the event the proposed acquisition does not proceed, to take such action may be necessary to confirm no further extensions to the existing Development Agreement be granted after the existing longstop  date in the Agreement.

(iii)  Enter into discussions with any interested third party to

•  seek to agree lease regear terms for the site which would allow a third party to acquire the Toys R Us lease from Packaged Living. Any such terms being conditional upon the site's acquisition and ensuring the proposed uses were consistent with the masterplan

•  consider whether there are close working options either alongside or with, third party entities moving forward whereby the Council would collaborate in relation to the realisation of the opportunities presented by any proposed redevelopment

(iv)  To complete analysis of regulatory issues that are a pre-condition to any agreed disposal of any interest in the site or collaboration with any third party to further progress master planning and regeneration opportunities in the area, including but not limited to, s.123 best consideration disposal tests, Best Value, procurement compliance and subsidy control considerations for follow-on approval by Cabinet

(v)  To note that a further decision by Cabinet on final proposals, subject to satisfactory progress by interested parties on acquiring the relevant land interests, is anticipated to return to Cabinet in April 2025.

1.  This report is submitted for consideration as a General Exception under paragraph 15 of the Access to Information Procedure Rules in Part 4 of the City Council’s Constitution, notice having been given to the Chair of the relevant Scrutiny Panel and the Public.  The matter requires a decision in line with timescales put forward by the parties seeking to acquire the site and the existing owner, both of whom have sufficiently developed their negotiations to now wish to move at speed to fix commercial terms and avoid further market fluctuations that may impact on agreed financial terms etc. The Council’s decision on supporting the proposals and providing the relevant freeholder consents is required slightly faster than normal forward plan notice periods as a result of the third parties agreeing terms that are subject to moving at speed to conclude their related transactions.

2.  The Cabinet decision of April 2024 acknowledged the impact of macroeconomic challenges faced by construction projects over recent years and allowed the development scheme additional time to move forward with delivery as set out in the original Development Agreement. However, this has not resulted in a positive outcome, and the development has not progressed to delivery within a reasonable timeframe. Revised proposals are needed to unlock this key development and regeneration site to drive the economic, social and environmental benefits visualised in the Council’s regeneration and master plans for the area.

3.  To allow sufficient delegated authority to enable the redevelopment of the stalled former Toys R Us site on Harbour Parade which is a key strategic site at one of the gateways to the city.

4.  To utilise the Council’s position as freehold landowner to support the delivery of the former Toys R Us site for a mix of uses consistent with its ambitions for the inclusive growth of Southampton. It is a key gateway city centre site.

5.  To enable a way forward through potential third party purchase of leasehold and delivery of the stalled Toy R Us site that supports the vision for the City Centre as set out in the Cabinet report of 28 January 2025 (SUBJECT:) by delivering an innovation-led scheme focused on health, science and engineering type occupiers.

6.  Modern city centres function as residential, cultural, and business hubs, contributing to economic activity and socio-economic change. A robust city centre supports regional growth and links local individuals and businesses to new opportunities. City centres increasingly serve as places of collaboration, where networks of knowledge-producing organisations (such as universities, government, the voluntary sector, cultural institutions, start-ups, and private sector organisations) converge to foster innovation.

7.  Therefore, the Council aims to demonstrate its intentions and commitment to the comprehensive regeneration of the City Centre. This involves ensuring that developments are not hindered by delays or prolonged negotiations, by approving the resolution above (subject to further approvals and regulatory tests being met) for the City Centre's regeneration, in consultation with landowners and occupiers. 

The lack of progress on delivery of the original consented scheme risks the site remaining vacant for the foreseeable future, which is not in the interests of city regeneration. Commencing negotiations to formally terminate the agreement would incur additional costs, time and delay to the Council.

Additionally, significant increases in construction costs have made viability a significant challenge in delivery becoming highly unlikely of the original consented scheme, and, at best, there will be limited delivery of residential uses focused on the Build to Rent market. This will prevent the current leaseholder from bringing forward meaningful development on the Site, despite having secured a planning consent.