Cash-strapped Walsall Council to spend more than £13 million buying Saddlers Shopping Centre

The Labour-run authority, which needs to save £86m by 2020, agreed during a closed door meeting to buy the centre – for £13.8m.

Council bosses hope the purchase will help turn around its financial woes and net it more than £10m in just five years.

The council has recently closed nine libraries and cut hundreds of jobs across the borough.

Critics have said the move makes ‘no sense politically’, with leader of the opposition Mike Bird adding: “They tell people they cannot afford to cut the grass and collect bins regularly but they have the money spare to buy a shopping centre.”

Councillor Sean Coughlan, leader of the council, said: “I do appreciate that residents may question why we are seeking to make this significant purchase at a time when council services they value are reducing or ceasing.

“This purchase would be capital expenditure, whereas savings are being made to our revenue expenditure.

“Capital expenditure is used for investments and improvements to the council’s assets whereas revenue expenditure is the council’s day-to-day spend on running costs of services and facilities.

“This is very positive for Walsall. This acquisition will provide the council with an opportunity to add to its existing investment portfolio whilst the rental income generated will meet the aims and requirements of the council’s four year financial plan.

“The Saddlers Shopping Centre makes a significant contribution to the retail offer in the town centre and provides a gateway from Walsall train station.

“Owning the centre will give us a real point of control in proactively supporting regeneration in Walsall town centre, whilst also achieving significant income back to the council.”

The site, managed by Cushman and Wakefield, is currently owned by the Topland Group.

The purchase was provisionally agreed in private on July 27, before being rubber stamped at a meeting on Monday night.

The final stages of the deal were being completed today.

The centre is expected to cost the council around £13.8m in total, with an extra £1.3m on top of the £12.5m purchase price being made up of stamp duty, professional fees and investment in the centre in the first year.

A report prepared for Monday’s meeting stated: “The acquisition of the Saddlers

Shopping Centre for £12.5m provides the council with an opportunity to add to its existing investment portfolio and to achieve one of the aims of the four-year medium term financial plan in terms of the generation of increased rental income.”

The council’s estimated £10m return on its investment is based largely around being able to fill all of the units, something it admits in its own papers it might not be able to do ‘due to market conditions’.

One of those against the purchase is former mayor and councillor, Pete Smith.

He said: “It is outrageous that it seems that this has been rushed through council behind closed doors without any prior public knowledge or consultation, now committing the so called cash-strapped council to finding £13.8m of extra borrowing to finance this project.”

Darlaston South councillor Doug James said: “Full marks for the idea of council intervention into modern regeneration work.

“Walsall needs business, jobs and investment opportunities.

“However, is this the best deal in town? Walsall shoppers are fickle, we share a testing relationship with our town centre shops.

“We want better shops and the best value for our cash. In short there are far better offers and choices not to far away.

“Something that has been sadly lacking for many years in Walsall.”

Topland was contacted but declined to comment.