From Alpha To Omega: Three Times The North West's Most Successful Industrial Scheme Nearly Got Killed
Today the idea of big-box development on a motorway junction mid-way between Manchester and Liverpool seems like a no-brainer. Occupiers at the 575-acre Omega site include Brakes, Hermes, Travis Perkins, Asda, The Hut Group, Domino's and Amazon. But as recently as 2006 the scheme on a former RAF base was being actively opposed by both Manchester and Liverpool city councils.
As Mountpark Logistics revealed a 308K SF warehouse letting to food business Gousto, the first deal at the latest 735K SF speculative development on its slice of the M62 motorway site, it is easy to forget just how hard was the road from start to finish.
Here are three moments when what now seems like the most obvious property development in the North West almost died.
1. The Motorway Junction That Nearly Didn’t Happen
The Omega development depends on junction 8 of the M62 motorway: It opened the site and relieved endemic congestion around the Birchwood area. But it very nearly didn’t happen. When the M62 opened in 1972 it had a junction 7 and a junction 9 but no junction 8 which was left for later, by which time Warrington new town was expected to have grown. By 1994 traffic pressure was overwhelming, but nothing happened except the new junction (which did not require government money) was put on the official list of schemes to go ahead. Thereafter delays, reviews, policy shifts and rethinks by government combined with a pass-the-parcel approach in which various departments and agencies took responsibility for transport, to slow the junction plan to walking pace. By 1998 local anger about delays had reached boiling point, but the government (in the form of Oscar-winning actress Glenda Jackson, who was transport minister at the time) announced another appraisal.
Junction 8 eventually opened just before Christmas 2002, which meant it was just 30 years late.
2. The Development Selection Process That Nearly Collapsed
July 2001 marked the end of the developer selection process with the announcement that Miller Developments/Royal Bank of Scotland had been chosen as preferred developer for 7M SF of mixed office and industrial space on the Omega site.
Bumpy scarcely describes the process leading up to the decision, presided over by English Partnerships, a government agency since abolished. For a start, most observers expected a rival consortium of U.S. developer Hines, Amec Developments and Morley Fund Management to walk it. They didn’t and there were accusations that they had been used as a stalking horse.
The selection process also attracted criticism from defeated bidders, of whom a long list of 15 was reduced to a shortlist of six. They were: The Hines consortium; Arlington/Gazeley; HBG and the Duke of Westminster’s Grosvenor property empire (which announced it would “disengage” from the process ); Miller Developers and Royal Bank of Scotland; Prologis and British Land; Taylor Woodrow/Axa REIM.
3. The Change Of Direction That Made All The Difference
Turn-of-the-century planning guidance from English Partnerships and Warrington council said the site was reserved for “a high quality business development” with an emphasis on office space. This was to be the source of many problems.
At the time of the selection of Miller in 2001 regeneration figures in Liverpool had privately expressed concern about the Omega scheme, fearing it would suck jobs and investment away from Merseyside. Manchester agents took a similar view of the effect on their market of a 7.4M SF scheme, around 5M SF of which was to be office floorspace.
In the meantime the North West Development Agency, another government quango since abolished, ran out of money to promote the scheme, meaning that speculative work on site, due to begin in 2003, had not begun by mid-2004. Meanwhile, the government pondered sending the planning application for the now controversial site to a public inquiry. Another year’s delay was predicted, but that soon extended to three years as Manchester and Liverpool city councils objected to an office-led scheme.
By this point many in the property industry has lost faith in a project that seemed more 1980s than Noughties, many more had lost interest, and the entire scheme hung in the balance as a planning inspector considered his response to Warrington’s new Omega-enabling unitary development plan. By 2008 nothing had happened and the final death blow to the office scheme came with the credit crunch of that year, and government plans to put a prison on the site, scarcely the kind of neighbour international office occupiers seek out.
This was an emperors-new-clothes moment for the Omega plan, and the bold man ready to call it out was the then North West Development Agency chief executive Steve Broomhead.
“Given changes in the market, the original master plan for Omega’s office development in later phases should be reconsidered and we are urging Warrington council, Miller and the Royal Bank of Scotland to sit down with us and reconsider,” Broomhead said during summer 2008, Estates Gazette reported.
“The original master plan may not be the way forward, and other office development sites have come forward since the master plan was agreed in 2002. The strategic rationale for Omega is not in 2008 what it was in 2002.”
Miller, RBS, Warrington Council and landlord English Partnerships said nothing at the time, but by the end of the great financial crisis the penny had dropped. Since industrial planning permissions were first granted in 2012 Omega has not looked back.