NEWPORT City Council is planning to borrow £90 million and lend it to the developers behind the Friars Walk shopping centre to ensure it is open within two years.

A special full council meeting on Tuesday 26th will be asked to agree a funding package for developers Queensberry that would cover the full cost of building and fitting out the shopping and leisure complex.

Read the full Newport council funding report at the foot of the story:

Senior council officer Sheila Davies, strategic director for regeneration and environment, says the “unprecedented move” will help the scheme meet anchor store Debenhams’ aim to be open by Christmas 2015, saying it was just too risky to delay.

Major names Nandos, Cosmo, Frankie & Benny’s, Prezzo, Chiquittos, Next, Topshop and Cineworld have also committed to the development.

Under the plans, approved by cabinet in a special closed meeting on Monday, the council will borrow up to £90 million from the Public Works Loan Board and lend it to Queensberry.

The developers will have to pay the money back to the council at market rate of interest within a year of the scheme’s completion.

This would allow for construction to start around March next year with Friars Walk open for business in November 2015.

Ms Davies said it was the “biggest decision this council is ever going to make” and was an unprecedented move for a UK council – it had originally been planned for the scheme to be funded by the private sector.

Although such finance would eventually be available from investors and commercial lenders, the Argus was told by Ms Davies that it would be more expensive for Queensberry to pay back and further delays would put the entire scheme in jeopardy.

Newport council couldn’t wait until 60 per cent of the scheme was pre-let – the level that investors usually lend to such projects. Currently Friars Walk has pre-let 40 per cent of how much the scheme is worth in rents.

“We’ve got to hit that opening deadline for Debenhams. If we lose it again it’s gone forever,” said Ms Davies.

Debenhams has specified that it wants to be open at Friars Walk by Christmas 2015, or Spring 2016 at the latest.

It is planned that no council money will be used for the loan, which would be borrowed from the Public Works Loan Board.

Estimates put building the complex at £65 million, with other items including fit out costs bringing the total to around £85 million. The remainder of the loan could cover potential contingencies.

Under the agreement if Queensberry collapsed – and there is no suggestion that it will – Newport council would take over the scheme.

The council already owns the ground and is giving Queensberry a long lease on a peppercorn rent.

‘Back Newport and back our plan’ - Leader’s call to councillors

NEWPORT council Labour leader Bob Bright said he is asking for all councillors to back the city and the development when the proposal comes to them next Tuesday.

Next week’s special meeting, originally called to discuss the Chartist Mural demolition, will now also discuss whether to approve the plan to fund the complex’ completion.

Cllr Bright said: “Major names such as Debenhams, Next and Topshop have already shown their confidence in Newport, and we are now asking all councillors to back our city as well.

“While other funders are also prepared to support the building of this scheme, and may come on board at a later stage, we believe this is the best option at this crucial stage.”

“I am sure that members of the full council will give their support to the proposal as it will mean that Friars Walk – which residents and businesses have been eagerly waiting for – can become a reality sooner rather than later.”

The decision to loan £90 million for Friars Walk has to be put to full council because of the amount of money involved.

Read the full Newport council funding report here: