New tax law delays work on distribution centre (From The Northern Echo)

New tax law delays work on distribution centre

9:36am Tuesday 23rd September 2008 in Search By Deborah Johnson

DEVELOPERS behind a new County Durham distribution park, which could create at least 1,000 jobs, are so fearful of being hit by a new tax on empty properties they are postponing construction until tenants have been secured, The Northern Echo has learned.

Amazon Park, in Newton Aycliffe, near Darlington, will include 1.4 million sq ft of space and offer the largest distribution building in the North-East at one million sq ft. Plans for the development have been hailed by business groups as a reflection of the massive ambition of the area.

However, developers have said that due to the introduction of the widely-condemned Empty Property Rates (EPR) – which forces businesses to pay tax on unoccupied buildings, even if they have only recently been completed – they will not start work on the ecofriendly development until pre-lets have been secured.

Geoff Hunton, director of Merchant Place Developments, the developer of the site, said: “At Amazon Park, we are actively looking for pre-lets, as we wouldn’t want to build buildings at the minute which we hadn’t already found tenants for. That is definitely due to the EPR.”

An event is being held at the site next week to officially launch the site, which is being backed by letting agent Cushman and Wakefield and the County Durham Development Company (CDDC).

Mr Hunton said the scheme is very exciting for the region, and he is confident interest will be high.

“There are sound commercial reasons for including such a large building on this site,” he said. “Despite the present economic uncertainties, interest remains strongest for the larger facilities, mainly from retailers and logistics firms.”

Stewart Watkins, managing director of CDDC, said the project will help draw national and international attention to the region.

“Its potential to house a one million sq ft building gives it national and international appeal and CDDC will be working closely with Merchant Place Developments to find suitable tenants,” he said.

“Amazon Park is symbolic of the wider awareness of County Durham as an ideal location for a company to site its operations.”

James Polson, from Cushman and Wakefield, said the North-East’s market has grown significantly over the past few years.

“The prime factors driving this are access to markets, transit points and customers’ requirements, as well as occupational costs and congestion on main transport routes,” he said. “In terms of Amazon Park, we are offering the potential to develop the most flexible and cost-effective system for obtaining and delivering goods within a specific time period.”