Credit crunch hits £500m Birmingham Arena Central

Developers overseeing the construction of the first phase of the £500m Birmingham Arena Central  have refused to set a start date "in the current climate", raising fears the scheme could stall.

In the same week cash flow problems for the scheme’s lead developer Arena Central Developments (ACD), a joint venture between Miller Developments and Bridgehouse Capital, were revealed in a city council report.

In a bid to keep the scheme on track, Birmingham City council has agreed to let ACD stagger a £5m payment towards transport improvements, rather than pay the whole sum upfront at the start of preliminary works. In addition ACD’s first staged payment of £1.5m will be paid at the start of the first phase, rather than at the start of preliminary works.

Councillors voted for the staged payments after the report warned that the lump sum payment would “have a significant impact on (ACD’s) cash flow arrangements” and be “a strong disincentive” to ACD.

The £5m fee will go towards funding the refurbishment of  Birmingham’s New Street station. However the council could wait some time for the first instalment. It will be triggered by the construction start on the scheme’s iconic 53 storey V- Building.

But the scheme’s developer Dandara is refusing to name a start date. Director Steve Evans told CJ: “You would be a fool to put any set start date on any scheme in the current climate.”

Miller Developments director Jonathan Wallis said ACD was affected “like any other developer in the current economic climate” but added that site clearance work had begun on site. “The announcement of further works is imminent," he said.