15 October 2012

Evergreen – LMC MeetingCheshire West & Chester Council HQ

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Agenda

1. Background

2. Investment Strategy

3. Appraisal Process

4. Current Projects

5. Project Pipeline

6. Experience to Date

7. State Aid

8. Potential Demand

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Background

North West Urban Investment Fund established in Nov 2009

EIB is Holding Fund Manager

Two Urban Development Funds now operational – Evergreen and Chrysalis

Both UDFs target the creation and/or refurbishment of new/redundant floorspace; creation or retention of employment and remediation of brownfield sites

Evergreen - the UDF for GM, Lancashire, Cheshire and Cumbria

16 Local Authorities – Limited Partnership led by GP Board

Independent Fund Manager – FSA Registered – CBRE

Evergreen went live 28th October 2011

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Investment Strategy

Investment Strategy with six priority areas:

1. Create a high-employment region

2. Invest in science, research and innovation

3. Build on the region’s strengths in culture and media

4. Supporting strong and diverse town centres

5. Promoting a wider, stronger and more sustainable industrial base

6. Ensuring sustainable sites are ready for development

Aligned with sub-regional strategies and NWOP Measures 3.2 and 4.3

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Project Appraisal

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Current Projects

PROJECT LOAN AMOUNT

INTEREST RATELOAN

REPAYMENT DATE

ERDF TARGETS – FORECASTED OUTCOMES

NEW & SUSTAINED JOBS CREATED / PERCENTAGE OF ERDF TARGET

BREEAM EXCELLENT FLOOR SPACE CREATED /

PERCENTAGE OF ERDF TARGET

HECTARES OF BROWNFIELD LAND

REMEDIATED / PERCENTAGE OF ERDF

TARGET

Soapworks, Salford

£6m market

36 months from loan agreement date

1,280 Jobs

43.8%

21,880 m2

27.9%3.58 Ha

44.75%

CityLab, Manchester £4.75m market

30 June 2015

306 Jobs10.5%

Space already accounted for within grant funding

0.3 Ha3.75%

Total£10.75m - -

1,586 Jobs

54.3%

21,880 m2

27.9%3.88 Ha

48.5%

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Project Pipeline

PROJECT LOAN AMOUNT

INTEREST RATELOAN

REPAYMENT DATE

ERDF TARGETS – FORECASTED OUTCOMES

NEW & SUSTAINED JOBS CREATED / PERCENTAGE OF ERDF TARGET

BREEAM EXCELLENT FLOOR SPACE CREATED /

PERCENTAGE OF ERDF TARGET

HECTARES OF BROWNFIELD LAND

REMEDIATED / PERCENTAGE OF ERDF

TARGET

101 Embankment Greengate, Salford

£6.95m marketDec 2015 (TBC)

880 Jobs 30.1% 15,329 m2 19.6% 0.2 Ha 2.5%

Chester CBD £6mSub-commercial

36 months from loan agreement date

514 Jobs (TBC)

17.6% (TBC)

6,172 m2 (TBC)

7.87% (TBC)

0.15 Ha (TBC)

1.88% (TBC)

DHL, Manchester Airport

£6m market

36 months from loan agreement date

TBC TBC TBC TBC TBCTBC

I plus, Spinningfields, Manchester £6m market

36 months from loan agreement date

TBC TBC TBC TBC TBC TBC

Port Salford, Salford £6m market

36 months from loan agreement date

TBC TBC TBC TBC TBCTBC

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Progress to Date

Progress to date

Project Pipeline

2 projects final negotiation, further projects being appraised for Stage 1 approval by GP Board

Economic Conditions – reduced demand

Regulation

Match funding at project level (COCOF III)

State aid notification

Raise Profile

Over 12 developer and LA roadshow presentations

Good understanding of the fund and how it works

First ‘club’ deal with bank underway

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Experience to Date

Banks now reducing lending to projects for their own cashflow/coverage reasons, not just viability – Evergreen co-financing role

Developers prepared to invest alongside Evergreen, where development would not otherwise have happened

Completion process challenging with new products

• EU monitoring/audit rights

• Output security

• ‘Match funding’ agreements

Banks more aware and are keen to work with the Fund

Developers restructuring projects to utilise Evergreen

Project pipeline subject to challenge geographically

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State Aid

Implementation needs to be worked through

Enables funding projects with viability gap but alters risk for the Fund (where some measures are concerned)

Independent Expert now to be appointed directly by Fund

Option for LA to assist in project delivery in higher risk areas, to support Evergreen investment.

Developers cautious regarding advice in implementing the scheme

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Potential Demand

Currently c.£11m in final stage of negotiation

Further c.£31m undergoing due diligence/appraisal

Further marketing exercise starting before Christmas

News of loans expected to be completed shortly expected to increase demand.

Further pipeline projects being developed

As LEPs develop their Growing Places investments, they may utilise Evergreen where appropriate