Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: November 4, 2025

Purpose: To consider the report of the Leader of the Council seeking approval to progress a key gateway development site.

Content: (i)  To delegate authority to the Executive Director, Growth and Prosperity, following consultation with the Executive Director of Enabling Services (s.151 Officer), Director of Legal and Governance, the Leader and Cabinet Member for Economic Development to:    (a)  Take all action necessary to approve and facilitate the termination or transfer of the existing 85 Year lease and to grant a new 250-year lease over the site to the newly formed Limited Liability Partnership on revised terms that will facilitate development of the site. (b)  Take all action necessary to secure the Council’s membership of and participation in the proposed Limited Liability Partnership, including but not limited to agreeing and entering into any Partnership Agreements and other legal agreements relating to the Council’s membership, appointing Officers to represent the Council on the Partnership and to take all steps necessary to comply with the obligations on behalf of the Council within any such documentation..   (ii)  Subject to remaining within approved budgets and complying with relevant regulatory notifications required, to authorise the Executive Director of Enabling Services (S.151 Officer) to approve the Council’s financial contribution to the LLP on the terms set out in confidential appendix 4 as an interest free loan to the LLP and to approve the elements of the Council’s contributions to the Partnership and project that amount to a notifiable subsidy (as set out in confidential appendix 8 on a ‘subject to contract’ basis). (iii)  To authorise the Executive Director, Growth and Prosperity, following consultation with the Executive Director Enabling Services and Director Legal and Governance to take any decisions and action necessary, including but not limited to, entering into related legal agreements, seeking regulatory consents and notifications and other ancillary matters to deliver the proposals set out in this report and to enable the redevelopment of the Maritime Gateway site(s) through the Council’s membership of a Limited Liability Partnership.  

Reasons for the decision: 1.  To allow sufficient delegated authority to enable the Council as part of the Partnership to bring about 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.  2.  To utilise the Council’s position as freehold landowner to grant a lease on revised terms that will 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. 3.  By participating in the Partnership to facilitate a change in ownership and control that will secure the 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 by delivering an innovation-led scheme focused on health, science and engineering type occupiers. This demonstrates the Council’s role in delivering the Southampton Renaissance. 4.  To enable participation in the delivery of the new proposed scheme with key Partners thus unlocking significant Economic benefit.  

Alternative options considered: 1.  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, given the impending expiry of the existing planning consent there would appear to be no prospect of the consented scheme being delivered within a timeframe that would be acceptable to the Council. 2.  An alternative option would be for the Council to deliver the scheme on its own account; however, this is unrealistic given the significant financial commitment required including the need to acquire the existing 85-year Lease from Packaged Living. Additionally, considerable human resource and specialist expertise would be required to progress any development activity on the site; resource and expertise the Council would need to procure. 3.  In the first instance it is proposed that the Partnership having achieved control of the site by virtue of the new lease, will demolish the existing building on the site, invest in public realm on the site creating the appropriate parts of the Maritime Gateway parade and also undertake master planning for a mixed use scheme of regeneration incorporating office, innovation and residential uses. It is expected that some of this work will be Grant funded. 4.  The Partnership itself will not undertake development but will “sell down” individual plots to third parties, with a view to recovering its investment over a period of time. It should be noted that the Partners will have a first option to acquire these plots subject to appropriate valuation safeguards.