Nottingham Review
Few issues have caused as much debate among the East Midlands' political and business elite in recent years than last year's renaming of the region's airport with the simple prefix "Nottingham". One word it might be, but it has fed thousands of lines of newsprint since.
Yes, we all know that the airport isn't strictly in Nottinghamshire but that isn't the point. As Nottingham Forest chief executive Mark Arthur recently said during an interview with this magazine, it is difficult to brand the entire region when it is essentially based on three cities. Arthur went on to ask whether people from further afield see the East Midlands as a destination? "No, but they see Nottingham as a destination," he added.
And there's the point. The East Midlands' key airport may straddle three counties, but that's not much use when it comes to brand recognition to the overseas businessman, inward investor or tourist alike.
On a wider front the decision to add Nottingham to the airport's brand merely underlines the city's status nowadays and its achievement in reinventing itself over approximately the past decade.
The city's achievements are all the more impressive given the series of body blows it has suffered in recent years from its major private sector employers such as BASF, Raleigh, Royal Ordnance and the city's long-time flagship Boots, which as we speak is in the midst of a major restructuring that is seeing the loss of head office jobs.
Achievements too that have been gained against a backdrop of continued social inequality and deprivation in the city and ever-rising concerns over crime, factors that could easily have damaged its investment credentials.
Those factors are still prevalent today and Insider makes no attempt to downplay them during this analysis. Yet the more good news stories that come out of Nottingham, the more one must hope that its social problems can begin to be lightened.
For instance, if we return to the corporate front, Experian's decision to stay in the city of its birth more than 20 years ago - even though three-quarters of its business is in the United States - has been critical. The company is now Nottingham's second-biggest private sector employer, behind only Boots, and is also responsible for a considerable number of cranes on its skyline too.
The later arrival and subsequent remarkable growth of Capital One has also helped transform Nottingham's financial services sector. And on the wider corporate front, in their very different industries both Siemens and Gala have also helped underpin the growth of the city's buoyant economy. The former's profile may have dipped, but it still occupies 850,000 sq ft of manufacturing and office space at its Beeston home. The latter, through an aggressive acquisition drive, has become the UK's fastest-growing retail gaming specialist.
The presence of two progressive and popular universities - both in the UK's top ten for graduate employment - also continues to enhance the city's appeal. Their partnership with the East Midlands Development Agency has been the catalyst for developments such as BioCity, an imposing healthcare and medical science innovation centre on the redundant BASF site in the heart of the city.
Nottingham's Lace Market quarter - once little more than a derelict home to down-and-outs - is now one of the city's des-res addresses, and a series of major regeneration projects is planned elsewhere.
And when it comes to shopping the Broadmarsh Centre is set to double in size to more than 1.3m sq ft, transforming the city's retail offer.
Even getting around the city is getting easier with the transport infrastructure problems that have handicapped Nottingham's growth for so long now also finally being tackled in a meaningful fashion.
We explore each of these factors in more depth on these pages, and also explore the extent to which they each complement each other and what lessons other parts of our region can learn from Nottingham's revival.
Our analysis may ruffle a few feathers elsewhere in the East Midlands. But we make no apologies.
A strong Nottingham means a strong East Midlands region. The sooner everyone in the region accepts that, the sooner the East Midlands can reach its self-appointed goal of becoming a top 20 region in Europe against a string of economic and social indicators
A Tram system fit for the 21st century
After a gestation period of some 15 years and investment of around £3200m, Nottingham Express Transport's (NET) first line finally opened in March.
In common with all the UK's light rail schemes, the project was inevitably somewhat delayed by protests, construction problems, planning arguments, funding setbacks and the like.
Carillion, the Black Country-based construction company that was part of the Arrow consortium that built the line, swore not to touch another light rail project "with a bargepole" after its experience in Nottingham where cost over-runs forced it to take a £310m asset write-off.
But that dent was the only one on view as the sleek new trams began running along the 14km route from Hucknall in the north into the city centre. The early signs are positive, with an average 20,000 journeys being made each weekday in the first month. "We were determined that they should look as appealing as possible, and that the platforms and associated structures would have very low visual impact," says NET spokesman Stephan Richeux. "We learned from other light rail schemes in the UK and overseas that one of the keys to attracting passengers was to make the trams welcoming and easy to use."
The Nottingham project is being widely held up as an example of how light rail promoters are beginning to learn the lessons of previous troubled projects such as the West Midlands Metro and Sheffield Supertram. For instance, the 14km line links areas that already produce large amounts of bus traffic, unlike Sheffield.
A second crucial element to the Nottingham scheme has been the provision of five sophisticated park and ride facilities to ease Nottingham's notorious traffic congestion. Such sites are already becoming the focus for other developments, notably at Hucknall where several new-build housing schemes are underway and a Tesco superstore is planned.
Similar park and ride centres are proposed for lines two and three, which will run alongside the A453 and A452 respectively.
"Both roads are congestion blackspots. Once all the lines are operational, we will then position another park and ride by the M1 to serve all three junctions," says Richeux.
He hopes formal submissions for Transport Works Act orders for the next two lines will be made this summer, as the intention is to build both simultaneously. One of the lines will also run alongside the giant NG2 business park on the site of the former Royal Ordnance factory.
If the developments proceed smoothly, work on the £3250m project would then start in 2006 or 2007, with construction estimated at three years.
shopping of depth and character
For up-to-date proof of Nottingham's retail draw, its shops recently won high praise in a survey of the UK's top 30 retail destinations.
Property consultancy Gerald Eve says its PrimeRetail study is the most comprehensive focus ever on the nation's high streets. Some 6,000 questionnaires were sent to retail managers, while other researchers assessed yields, take-up rates, vacancies, customer levels and other critical issues.
Chris Kershaw, the partner who heads Gerald Eve's Birmingham office, says Nottingham achieved a UK ranking of fifth, behind only Glasgow, Birmingham, Manchester and Newcastle.
The city was comfortably ahead of such high-profile regional shopping centres as Leeds, Edinburgh, Liverpool, Oxford and Cardiff. "Nottingham was felt to have a large and varied retail offer that could appeal to all cross-sections of society," says Kershaw.
"The major roadworks associated with line one of the NET had been a problem, but it is also seen as a potentially effective solution to the city's accessibility issues."
Gerald Eve's retailers identified the eclectic retail centre developing to the east of Victoria Street, as well as Exchange Arcade, Flying Horse Walk and Bridlesmith Gate, as adding depth and character to Nottingham's retail provision.
Its fifth place could have been even higher but for the low rating it achieved for functionality. "It's not an especially shopper-friendly city as there is a considerable and generally up-hill journey between the Broadmarsh Centre in the south and House of Fraser in the north," says Kershaw.
Westfield's proposals to redevelop the Broadmarsh will inevitably lead to significant disruption of accessibility and parking, the survey says. But once built, the scheme can only add further weight to the city's retail pulling power. Westfield and partner Hermes Property Asset Management plan to more than double the centre's existing size with a 120,000 sq m development. It will include two new department stores, over 100 other stores, a food court, restaurants and a new transport interchange including a new bus station and new tram stop.
Public-private partnerships
When public-private partnerships work successfully they can change the face of a region. Sadly though, too often there is a gulf between theory and reality.
However the success of the Greater Nottingham Partnership (GNP) has made it an exemplar to all such bodies. The organisation was formed a decade ago by Nottingham City Council and Nottinghamshire County Council to attract more of the government's regeneration budget into the area.
Two years ago the East Midlands Development Agency asked the partnership to carry out the new role of delivering a regeneration agenda across Greater Nottingham.
Executive director Martin Gawith says the first full year saw the GNP invest more than £31m into the local economy and bring in more than £38m of European funding. He believes the central reason for the partnership's continued success has been its inclusive approach. "If we want Nottingham to succeed as a city, our activities can't just focus on one sector," says Gawith. "From the start, we included the business, public, voluntary and community sectors to ensure that everyone's views were heard because our agreements and decisions had to be collective."
The forthcoming ten-year project to transform the Waterside is typical of the GNP's approach.
"The housing element will be a mix of social housing and city centre apartments, not just living space for young professionals," says Gawith. "We've got to be mindful of balancing the differing needs of the various groups in our community."
The partnership has established a series of action teams on physical regeneration, employment, the environment, learning and competitiveness. Gawith claims these bodies are far from the usual talking shop, where delegates do little more than tick the box for their attendance allowances.
"We've used public sector intervention to make a considerable impact on Nottingham's regeneration," says Gawith. "The Canalside development was initiated by us when we put a major new magistrates' court there as a flagship scheme to attract private sector developers."
The GNP played an equally pivotal role in transforming the Lace Market area by persuading four local FE colleges that had merged to create New College Nottingham to site a major campus there. Gawith says the partnership is also working hard to develop closer ties with the University of Nottingham, and Nottingham Trent University.
"The links with our academic communities may not yet be as strong as we would like, but we're getting there and the results can be seen in the number of spin-off companies coming from those two institutions."
Nottingham regeneration
The government sees urban regeneration companies as the flagship vehicles to transform the UK's towns and cities. Their progress has been patchy though, notably because of the enormous complexities involved in creating and agreeing long-term development strategies and frameworks.
The success of Nottingham Regeneration in delivering physical improvements in the city has been widely noted though.
Chief executive Alan Swales was awarded an MBE in the Queen's Birthday Honours' list of 2002 and last autumn was praised for "making it all happen" by the sector's bible, Regeneration and Renewal.
Despite such accolades, Swales is refreshingly down-to-earth, eschewing the much-vaunted blue-skies thinking for a philosophy firmly grounded in common sense. "We don't want to be another London or another Barcelona. We want the best Nottingham that we can possibly achieve," he says.
"You need to have a vision, to be brave, and to have the determination to carry it through, but you also need to avoid the temptation of going for quick fixes."
Swales has an equally pragmatic economic strategy, which he believes fits with Nottingham's traditions. "We've never been a city to become too dependent on one industry, so if something goes wrong, it isn't disastrous. We didn't go chasing micro-chip companies when they were trendy, so we didn't suffer when that sector collapsed."
In common with other regional centres, Nottingham hopes to benefit from the relocation of civil servants following the report by Sir Michael Lyons.
"It would be nice if it came off, but our real strength is in growing our indigenous businesses," says Swales.
He's particularly pleased that Experian, which was founded in Nottingham in 1980, has chosen to stay and evolved into a major employer. Attracting Capital One to the city against European-wide competition was equally significant.
"When you're dealing with such a footloose business, it can be hard to persuade them to even consider you," recalls Swales. "We were competing with many of the leading cities in Europe. Cork, for example, offered them far more money than we could, but they came here because they liked Nottingham, and because we had the workforce they needed."
A rapidly maturing office market
Experian's decision to take a 170,000 sq ft pre-let at Nottingham's ng2 business park not only justified the expensive redevelopment of Royal Ordnance's sprawling former site on the southern approach to the city but also sent a strong signal to the wider world that Nottingham's commercial property market is alive with opportunity.
Back in the city centre this trend has only been given further weight by the decision of professional services big-hitters Royal Bank of Scotland and lawyers Freethcartwright to move into the new Cumberland Place development (pictured above) off Maid Marion Way, again an ambitious speculative scheme, this time by Wilson Bowden.
The city's buoyant professional services sector continues to be the main driver of its office market. The city's more established office zones also remain in demand, as evidenced by the arrival of two of Europe's biggest corporate finance houses, Sweden's Handelsbanken and Benelux-based Fortis Bank.
The former has been in the UK for more than 20 years and has gradually expanded its regional network but the latter is a much more recent addition to the scene.
Fortis originally ran its East Midlands operation from its Birmingham office but decided in 2000 that the strength of the local market needed a dedicated centre. Area director Jon Howe admits the bank had "mixed results" with its initial strategy. "We had acquired several major clients in the East Midlands and the perception was that we needed to be on the ground out here to really build genuine relationships."
Nottingham was swiftly identified as the bank's only realistic option. "For corporate finance in the Midlands, outside Birmingham, here is the pre-eminent location," says Howe.
Fortis took space in the city's traditional banking quarter, Park Row, and Howe reports significant success. During 2003 the Fortis team worked with more than 100 clients, lent around £3100m and generated £32.3m profit.
The office's best-known client is Triumph Motorcycles and its saviour, multi-millionaire tycoon John Bloor. The legendary Hinckley-based company is now back in profit and exporting worldwide, even to Japan.
"Effectively, we are Triumph's bankers in Europe. We manage the company from Nottingham with the help of colleagues in Belgium, France, Germany, Italy and the Netherlands," says Howe.
It's a story that could be repeated across the city's financial services sector by its big corporate advisory players. Namely serving clients from across the East Midlands out of Nottingham. And as long as the trend continues, Nottingham has an office market that can only continue to grow.
Come fly with me
Nottingham's de facto position as the capital of the East Midlands was recently recognised in controversial fashion by the region's airport.
In January, after more than 30 years under its original name, it was rebranded as Nottingham East Midlands Airport (NEMA). The move followed several months of research, particularly focusing on the overseas tourism market. Many potential visitors apparently knew of Nottingham - not least because of the Hollywood factor - but couldn't locate the East Midlands.
Airlines operating from the airport also considered that the rebranding would help them promote their flights overseas. Managing director Graham Keddie attempted to reassure aggrieved parties by stressing that the decision had been taken on "purely commercial imperatives." He said: "Nottingham had the most instant recognition and understanding overseas. The new name will help airlines promote their services, and provide travellers with a much clearer picture of what the region has to offer."
Understandably, those words of counsel weren't appreciated in Leicester and Derby, and officers from both local authorities met with Keddie in February to discuss the issue. He was then asked to visit Westminster to explain both the rebranding and the airport's strategy to the region's MPs.
"We felt it was important to dispel any concerns that our decision would split, rather than unite the region," says Keddie.
"Much of the negative comment we received was emotional and not based on a clear understanding of the importance to the whole region of opening up a gateway to continental Europe."
The little local difficulty shouldn't obscure the airport's continued success. Passenger totals hit a new high of 265,546 in February, and Keddie forecasts that 2004 will see the five million mark achieved. NEMA has now overtaken Gatwick to become the UK's second-largest cargo operator, thanks to the presence of DHL's £335m logistics hub and other major bases run by TNT, UPS and the Royal Mail. The first quarter saw cargo totals up 10 per cent year-on-year, and a new five-times-weekly service to Hong Kong has just been launched by DHL and Lufthansa Cargo.
Sowing the seeds for tomorrow
Ten of the companies highlighted in Deloitte's latest survey of the 50 fastest growing technology companies in the Midlands came from the city. Even the hi-tech hotspot around Warwick couldn't match Nottingham's performance, and Birmingham was left well behind.
Equally worthy of note, two of the three city firms in Deloitte's top eight were in healthcare, rather than the expected IT and software sectors.
The success of the exciting BioCity incubator and innovation centre should certainly lead to a healthy representation in future surveys.
The story of how BioCity came to be has strong resonance in the city. The initial news that pharmaceutical giant BASF was quitting the city was inevitably greeted with gloom. But the departure of the German company has paradoxically been the catalyst for a bioscience and innovation complex to rival anything in Europe.
BASF donated its huge site in the heart of the city, including offices, fully-equipped research laboratories and pharmaceutical manufacturing facilities, to Nottingham Trent University. Observers calculate that creating the 120,000-plus sq ft centre from scratch would have cost in the region of £325m.
Nottingham Trent then established a consortium with Nottingham University and East Midlands Development Agency (EMDA) to form BioCity Nottingham, giving scientists and entrepreneurs the space to research and develop products.
The consortium hopes to develop a genuine business community on the site by attracting venture capitalists, solicitors, patent lawyers, accountants and other service providers. It has already had success too. Catapult, which manages the East Midlands Regional Venture Capital Fund, recently chose BioCity as the home of its new premises.
BioCity's chief executive, Dr Glenn Crocker, is particularly well placed to drive through BioCity's strategy, being a former head of Ernst & Young's UK biotechnology practice.
The slowdown in venture capital (VC) activity over the last 18 months has made life tough for almost all early-stage and start-up companies. But Crocker, who joined BioCity last summer, sees signs that the economic climate is changing.
"The stock market is rising, the bioscience indices are up sharply over the last six months, and there are signs of a recovery in the IPO market, all of which helps raise our profile, but the challenge is still to get investors in."
Four of Nottingham's bioscience companies, Future Health, ScanCell, Oncimmune, and Psionix, were in Birmingham's Botanical Gardens last November at the Connect Midlands investment event, looking to attract VC backing.
Crocker says one has since closed its funding round and two others are in the late stages of such activity. Three of those companies were spin-offs from Nottingham University, and such ventures represent around half of BioCity's current clients.
Crocker is pleased that the university hasn't attempted to force scientists and researchers into setting up commercial vehicles.
"They're taking a very sensible approach, because none of us want to get into a numbers game. It does no one any good to see a large number of spin-offs established if most then collapse in their first few months."
He is also enthused by the arrival of Catapult. "We obviously need research-based businesses but it's also important that we provide them with access to funders and other services so we can build the whole supply chain here."
Two other VCs are in discussions about taking space in BioCity and Crocker is setting up a series of monthly clinics enabling scientists and researchers to meet business advice and support organisations. "We're also promoting ourselves as a venue for conferences and networking events, because the more mass we can get, the closer we will come to establishing a real cluster."
A key part of the strategy was the appointment of Dr Huw Edwards as director of business services. He returns to his home city after being awarded a PhD at Cambridge, then lecturing in cell biology and physiology at Oxford, before working across Europe for life science companies.
Despite its initial success that has seen one of the site's four buildings almost full, Edwards and Crocker well understand that BioCity is one for the long term. "I'm confident that this will succeed but it will probably be five years before we have anything substantial and perhaps ten years before we have something really to shout about," says Crocker.
"We are not really pushing ourselves at this stage to attract overseas attention. It would be great to get one or even two of the major US bioscience companies into the region but we leave that in the hands of EMDA."
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