A developer has spoken out about the crisis facing Birmingham – suggesting the council could negotiate sale and leaseback deals to manage its debts and gentrify areas.
Ravi Pankhania, managing director of the property developer Nacropolis Group, urged Birmingham City Council to build closer ties with developers as a means of paying off its debts.
Birmingham City Council has gotten into a financial mess due to £760 million of equal pay claims, after it emerged that women at the council were underpaid for years compared their male counterparts.
Pankhania reckoned a good solution is for the council to sell some property to developers on the condition that they improve the quality of the stock and/or manage it to a high standard. The buildings could then be repurchased at a future date once the council’s coffers are back to health.
He urged the council: “Make the land attractive to developers to come and rebuild.
“The council could provide sale and leaseback opportunities. That could work for now, but potentially later the council could buy that back.
“If they say to developers ‘you have to adhere to a new set of rules by looking after it’, there are developers that would say ‘from an investment point of view that works for us’ – everyone’s happy then.
“You should be trying to assist Birmingham citizens. This situation isn’t the residents’ fault – it’s the people in power.”
Pankhania arued that working with developers could serve to improve the quality of life in the city by improving the quality of stock. Therefore more people and businesses would be attracted to the region.
Arts groups have raised concerns that Birmingham could sell off its heritage sites, for example the Library of Birmingham, alongside the city’s main museum and art gallery – but Pankhania said these should not be sold off under any circumstances.
Instead the council could sell disused buildings or residential buildings it struggles to manage.
Michael Gove, housing secretary, has announced a five-year intervention in Birmingham to deal with its problems.
The group, led by led by Max Caller, will have powers relating to governance, finance and recruitment.