Delivering Urban Transformation Strategies: A Public Sector Led UDF

Des Gardner

Head of Regeneration (Legal)

Des GardnerCity Solicitors

Overview

• The North West Evergreen Partnership• The Investment Strategy - UDF's role in promoting the urban

development strategy for the region• Governance - share of participation (and management of

interests) across municipal partners • Funding - structure and possible future private sector (pension

fund) leverage + incentives.• Investment Management - relationship/responsibilities of the

General Partner (fund manager)

The Northwest Evergreen Fund• NWDA - Holding Fund• EIB Holding Fund Manager• North West Operational Programme• Rest of North West

- 4 sub-regions: Cumbria, Lancashire, Greater Manchester, Cheshire

- 18 unitary or County local authorities

• Ring - fenced Funds – AGMA/County Areas

The Northwest JESSICA Fund Structure

NWUIF (Holding Fund)EIB HF Manager

Merseyside UDF £30m ERDF

£50m ERDF

£50m NWDA Match Funding

£10m in the IDUFSP

£10mRoNW

£10mSP Funds

£10mAGMA

Capital Returns & Interest

Projects

£50m Agency Land and Single Programme Funds released as Local Match Funding is secured

Projects

+£10m Match RoNW+£10m Match AGMA

+£10m Complementary Funding to Match £10m SP

funds

+£30m local

match

Process

STAGE 1(March 2010 –

April)

STAGE 2(May – June)

STAGE 3(July– July 2011)

Expression of Interest

-Establish consortium-Track record-Evidence of first negotiation partnership-Letters of support

The Bid

-Investment strategy-Project portfolio-Ownership and governance-Risk management and control procedures-Financial forecasting-Management fees

Operational Agreement

-Evidence of Stage 1 projects-Terms and Conditions-Investment Adviser Agreement-LP Agreement-Ancillary Documentation-Match Funding

The Northwest Evergreen Fund

Vision1. Create a high-employment region2. Invest in science, research and innovation3. Build on the region’s strengths in culture and

media4. Supporting strong and diverse town centres5. Promoting a wider, stronger and more sustainable

industrial base6. Ensuring sustainable sites are ready for

development

The Investment Strategy

• Strategic Framework - IPSUDs

• Project Selection Methodology

• Loan Pricing and Underwriting

• Monitoring

• Public/Private Partnership

Investment Strategy

The Greater Manchester View• Strategic Economic Context• Greater Manchester Strategy• Assessment framework• Project Pipeline – capacity building

GovernanceGreater Manchester•Bolton•Bury•Manchester•Oldham•Rochdale•Salford•Stockport•Tameside•Trafford•Wigan

County Areas•Blackburn with Darwen•Blackpool•Cheshire East•Cheshire West•Lancashire•Warrington•Cumbria (tbc)

Legal Structure

Governance• Limited Partnership Meetings

- Delegation to GP- Special Consent

• General Partner Board- Balanced AGMA/County Areas- Co-chairs- Reserved Matters

• Investment Adviser Appointment- Independence- Approval of recommendations

Funding

• ERDF/Single Programme • Public Sector match/complementary

investment – land/cash• Leverage public investment –

private investment finance• Other sources of finance – LGPF,

Senior Debt, Developer equity

Financial Structure

Investment Management

• General Partner Real Estate Adviser - CB Richard Ellis

• Investment Strategy

• Report to General Partner

• EIB Holding Fund monitoring and management

Project Selection Process

Next Steps

• Fund operational July 2011• Quick Win Projects• State aid framework• Wider Investment Fund

- Housing

- Low Carbon

- Infrastructure

Questions

Des Gardner

Head of Regeneration (Legal)

Manchester City Council

Des.gardner1@manchester.gov.uk

+ 44 161 234 3013