Middlesbrough’s mayor Andy Preston tells ITV News Business and Economics Editor Joel Hills that House of Fraser needs to start paying rent "soon" or leave the town
The department store had been set to close but last summer, Middlesbrough Council stumped up £1 million to buy the building as part of plans to revive the centre’s fortunes.
Until now, the council has allowed Mike Ashley’s Frasers Group to continue to use the 100,000 square feet of retail space rent-free but Middlesbrough’s mayor insists that unless House of Fraser starts paying rent “soon” then the company will be turfed out.
“[Mike Ashley] will have to pay if he wants to stay,” insists the Andy Preston.
“We want House of Fraser to stay but, if they don’t, we have leisure operators queuing up to be in there.”
Mr Preston says the council is doing several things to ensure the survival of the town's high streets
As in many towns and cities across the UK, shoppers in Middlesbrough are returning to the centre to find it much changed.
Topshop, Dorothy Perkins, Miss Selfridge, Clarks, Monsoon and Thorntons have all closed their shops. Debenhams shuts its doors for good next month.
Middlesbrough has four shopping centres. They all look pock-marked by the experience of lockdown. Gaps have appeared in the parades that won’t be easy to fill.
The Cleveland Centre, which covers 411,000 square feet of retail space, first breached its banking covenants in 2019 but muddles on.
The building was bought for £82 million six years ago but isn’t worth anything like that now. The company that owns it, New Frontier Properties, had its shares suspended from the Johannesburg stock exchange in December after the directors failed to file its accounts.
Middlesbrough has a turnaround plan. The government has granted the town £36 million from its Towns Fund and its Future High Streets Fund. The local authority is investing another £15 million. The hope is that public money can attract activity back to the centre.
In addition to the funds used to buy the House of Fraser building, last summer Middlesbrough council paid £8 million for Captain Cook Square, another shopping centre.
The town’s mayor says the council would also consider bidding for the Debenhams building.
“If and when that [it] comes on the market, if it’s a good investment we will buy it at the drop of a hat and, again, leisure operators will want to be in that site,” Preston says.
The plan is to persuade cinemas, bowling alleys and restaurants to open in the town centre and to build thousands of new homes and new office space close by. By doing so, the hope is the hustle and bustle will return.
“Places like Middlebrough have been failed by capitalism,” says Preston.
“The state has stepped in.
"The state is regenerating it and rejuvenating it.
"We have too many shops but we are firing on all cylinders.
"You watch what happens here in the next 12 months.”
High streets were struggling long before coronavirus arrived.
Spending has been moving online for years, lockdown turned gentle decline into sudden death. Communities everywhere will need to reinvent themselves.
Middlesbrough: At a crossroads. (Left to right) Sports Direct (was BHS) - Mike Ashley purchased the site when BHS went bust in 2016; House of Fraser, which Mike Ashley's company uses rent-free, was bought by the council in July 2020 for £1 million; Debenhams, which is set to close for good in May, after the company went into liquidation. The site is owned by International Bank of China; Miss Selfridge, which is up for sale, after Sir Philip Green’s empire collapsed in November 2020.