HMRC pulls out of £45m Portsmouth office development leaving questions over the future of the prime city centre site
HMRC have dropped out of their £45m office building development on the site of the former Matalan in the town centre.
A decision to build a HM Revenue and Customs (HMRC) regional office near Portsmouth and Southsea railway station has been abandoned by the government’s tax authority.
The ‘No 1 The Goodsyard’ was supposed to be built on the former Matalan car park, and would have employed 1,250 full-time HMRC employees which is 350 more than currently work in the Lynx House in North End.
The £45m development would have provided a four-storey building, boasting 5,400 sqm of internal space, 38 parking spaces and 59 cycle spaces.
HMRC planned to own the freehold of the building and, together with the Marine Management Organisation, occupy most of the office space.
Welbeck CP and CoPlan Estates have progressed the scheme to date, with construction “weeks away" from being commenced.
However, the companies were served a legal notice by government lawyers to terminate the development agreement - this was around the same time the government set the date for the Autumn budget.
This unexpected decision risks the entire project being abandoned. Developers, however, are now exploring alternatives in consultation with Portsmouth City Council.
Edward Flach, director at Welbeck CP says: “Welbeck CP and CoPlan Estates are immensely frustrated and confused by the Government’s decision to walk away from its commitment to a new HMRC office in Portsmouth city centre.
“The decision to terminate the development agreement having so publicly and confidently expressed commitment to the scheme recently is a hard one to fathom.
“It looks like short-term cost cutting rather than strategic thinking about jobs, investment, operating efficiencies and what’s in the best interests of HMRC staff and everyone who uses HMRC services.
“Disappointed and let down as we are, we will move on and work hard to find a new way to bring much-needed regeneration to the site. We will find a way and we look forward to making it happen.”
A HMRC spokesperson said: “After extensive negotiations with the developer it became clear they were unable to deliver the development in line with the terms agreed last year and provide value for money for the taxpayer.
“We’ve therefore terminated the agreement, meaning our staff will remain in Lynx House for the foreseeable future while we consider our next steps.”