An out-of-town success in the Black Country
THE MONDAY INTERVIEW : Don and Roy Richardson. As the Greenwich millennium plans falter, Hazel Duffy reports on the twins who have had no problems developing private finance in the Midlands
Monday 17 June 1996
Sour grapes, because Birmingham's NEC site was rejected? Not really. He sees the merits of Greenwich. But he is highly critical of the way that the whole thing has been organised. The Government has gone for the worst of all worlds. The timescale is too short - contaminated sites like Greenwich, in his experience, have always taken longer and cost more to clear than budgeted.
"It's a fiasco, it goes beyond the pale,'' Don Richardson said. ``If I had been in charge, there would have been no competition. I would have said that Greenwich is going to have the money and that is it and nobody would have got upset."
But he also would have put the organisation into the hands of a businessman who was putting his own money into the project. "Financial involvement concentrates the mind wonderfully. You need somebody who can make a quick decision and that has to be a business person. I would have thought it would have been better to give business an opportunity to make a profitable venture of it. That opportunity has been missed by not backing the NEC initially. As it is, a lot of people around here have been offended."
But Mr Richardson said he is not one of them. He is sorry that the exhibition, "if it takes place at all", is likely to be much scaled down.
Don and Roy Richardson, twin brothers, took off in the mid-Eighties with their development of May Hill, in the heart of the bleak Black Country, just 100 yards from where they were born 66 years ago. They have moved fairly smoothly through property booms and busts to become one of the leading provincial developers.
The Merry Hill site had been a steelworks. The Richardsons cleared it, built small units for industry, financed in part by investors who got advantages of the Enterprise Zone. Then the Richardsons looked again at the planning permission and found that retail was within their remit.
The Merry Hill shopping centre has been so successful that permission is being sought for a fifth phase. The Richardsons themselves sold out four years ago. With offices and an hotel and thousands of new jobs, Mr Richardson believes he has done something for the area as well as for Richardson Developments.
The Richardsons' company is private, a state that they cherish. "We could have been 10 times the size if we had been borrowing money, but we could not have done some of the developments that we have. Just the mention of a contaminated site would have sent the share price plummeting. We would never have been able to clear Round Oak steelworks (Merry Hill) if we had had our noses on the share price. It was more than 12 months before there was a glimmer of activity on that site."
The Richardsons can move quickly as well. At the end of last week they completed acquisition of a site in York. They had been approached on the Monday by Bass and were able to complete by Friday.
"This is because we did not have to get the agreement of lenders or major shareholders." The site already has an Asda supermarket plus permission for another 260 square feet of retail without restrictions on the type of shopping.
A month ago, the Richardsons sold their Fort Retail Park, on the site of the former Dunlop test track, near Fort Dunlop (which they also owned, originally with Tarmac, until they sold it to English Partnerships in a deal linked to the expansion of Jaguar's nearby works). Work was only just beginning on the retail park. The sale price was pounds 90m, to three leading institutions. The initial yield is 5.5 per cent, which in property terms is hailed as "ground breaking," as Mr Richardson puts it.
Across the M6, just before Spaghetti Junction, the Richardsons have a two-thirds interest in a site that has been dubbed the best (location) and the worst (site of a former power station) in the area, where permission for a superstore and leisure facilities is in discussion with planners.
The success of shopping centres away from towns, seemingly at the expense of town centres, has prompted an about-turn by the Government. John Gummer, Environment Secretary, told planners last year to favour town centre developments. Sites on the edge of town centres were next best, out of town is a last resort.
Mr Richardson can afford to be sanguine. He and his brother know that the institutions want the sort of developments which can pick and choose their retailers because they have what the public wants. The Black Country lads made good, whose entrepreneurial success led to lunches with Lady Thatcher at No 10, and whose photograph flanking a beaming John Major sits in their office, can take their time. "We had more than 20 institutions approach us on the Fort Retail Park, 20 institutions able to perform with a multi-million pound job. There's pounds 20bn out there waiting to come in.
"Whatever the politicians, whatever the planners, do, the customer will vote with his feet, go with his wheels, to where he is going to get the service. Sooner or later, John Gummer will modify his views because this area - the Black Country is an ideal example - cannot be restricted to the lack of facilities. Merry Hill ought to be twice as big as it is today, not just because of the people buying the goods, but because of the jobs it has brought."
He says he is ashamed when he compares shopping in parts of Britain - and he includes some of the centre of Birmingham - with that in the United States. "They're Victorian." He recalls the jeweller with a pounds 2,750 Rolex watch for sale when Merry Hill opened, wondered who would buy it, learned the next day that the jeweller had sold three. And this is an area where thousands had lost their jobs. The one thing that has gone up, he says, is the amount of shopping - by 7 per cent a year since 1979.
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