Park Hill project bombshell reveals huge risks for Sheffield

12.00.00am UTC (GMT +0000) Mon 23rd Jan 2006

The Park Hill development has huge financial risks for the taxpayer

The proposal to spend £35m of taxpayers money on the refurbishment of Park Hill has come under fire again after new revelations about how the project will be funded. Lib Dems have revealed that the private developer will not be investing as much as originally envisaged.

Plans have come to light which show Urban Splash, the developer involved, will only commit to an initial outlay at a fraction of the publicised £130m figure. Lib Dems believe they plan to spend around £2m-£3m refurbishing the first phase of flats, any investment after that would only be funded by initial sales and profit from the first phase.

Lib Dems have also uncovered worrying information regarding the proposed investment and Urban Splashes finances. The companies assets are worth just £30m, yet the investment of £130m from the developer has been proposed. The finding backs up the revelation that the project will run on a risky self-financing strategy.

Liberal Democrats have highlighted that the project is unstable and could easily fail if flats are not sold off to a satisfactory level after the first phase. This would leave Sheffield with the nightmare situation of having an unwanted half renovated block of flats which have cost the taxpayer £35m.

Cllr Paul Scriven, Leader of the Sheffield Liberal Democrat Group, said: -

"It has now become clear that the this project will not deliver huge investment that has been promised, but any investment from private developers will depend on sales on a phase by phase basis. This obviously presents Sheffield with a huge risk that the whole project could go belly up very easily"

"If Urban Splash cannot find enough people willing to spend £200K to live in a flat at Park Hill then their will be no future investment. We could be left with the nightmare situation were taxpayers pay £35m for an unfinished, unwanted complex of flats"

"The more the whole project unravels, the more we can see that Labour are about to waste millions of taxpayers money on the project. These revelations show that the private developer will only face minimal risk, yet Labour are taking a huge gamble with the future of this site. We still believe that demolition is the best option, and this news supports our view"