NORTH Ayrshire Council is in talks to buy Irvine’s Rivergate Mall for £55million, it has been revealed.

In secret documents obtained by our sister paper The Irvine Times, the council’s plans to buy the shopping centre are laid bare.

The centre is currently owned by US investment firm Kennedy Wilson, who purchased it back in 2013 as part of a £250million portfolio of eight shopping centres, including the Bootle Strand centre in Merseyside - which has since been bought by Bootle Council.

But leaked documents state that senior council officers met with owners Kennedy Wilson earlier this year where, “the potential for the centre to be sold through an off-market deal was raised”.

The mall is 320,000 sq ft of retail space, comprising of high street big names such as New Look, Boots, Primark, Greggs and Costa Coffee and sees around 140,000 people come through its doors every week.

Council chiefs say that buying the mall would support the economic regeneration of the town centre.

The documents state: “The case for purchase of the Rivergate Centre rests on the regeneration potential afforded by ownership, combined with the financial feasibility of the proposal.

“The purchase of the Rivergate would represent a unique purchase to support the economic regeneration of Irvine.”

It is not yet known how the council would finance the purchase, however the Irvine Times has been told from two sources funding would come from a loan.

Other councils before them, such as Bootle Council and Stockport Council, have relied on loans from the Public Works Loan Board, (PWLB) to fund similar purchases.

However NAC’s own policy on borrowing in advance of need, states: “The council will not borrow more than, or in advance of, its needs purely to profit from the investment of the extra sum borrowed.”

According to the leaked files, the agreement of purchase of the Rivergate mall by the council is in the hands of Chief Executive, Elma Murray.

It states: “It is proposed that the agreement of Heads of Terms for the purchase of the Rivergate Centre, Irvine is delegated to the Chief Executive on the basis of the information contained within the report and for a price in the region of £55million.”

A spokesman for North Ayrshire Council said: “The Rivergate is a huge part of Irvine town centre and is very important to the council and to Irvine.

“The mall has changed hands a number of times between investment companies and we have regularly discussed its future with successive owners. The current owners don’t have it on the open market and we have no further comment to make at this time.”

But we understand North Ayrshire councillors have been briefed on the executive’s plans – which are to go before cabinet and full council.

The document states the proposal supports the Council Plan core priority 1 of ‘Growing our economy, increasing, employment and regenerating towns’.

However, it also adds: “There are no direct community benefits arising from this project.”

Documents state that the potential purchase would be ‘unique’ in scale and incomparable with other large scale financial commitments in North Ayrshire, such as the Garnock or Largs school campuses, although points out that other local authorities in England have made similar purchases.

Should the purchase go ahead, council chiefs envisage that management would be carried out by an appointed managing agent with responsibility for securing managing tenants, undertaking promotional activity, and instructing maintenance, with a council officer managing the process.

The regeneration case for the £55million purchase mentions potential for improving the centre in the short and long term.

“The retail environment continues to experience significant change in terms of shopping behaviour, a move to online and changes to format of centres.

“While it is difficult to predict what the requirements within central Irvine in 20 plus years time it is considered likely that in the long term more fundamental change to the town centre environment will be required.

“Outright ownership of the centre would place the council in a position of control to influence change for the positive.”

The Public Works Loan Board is a statutory body that issues loans to local authorities and other specified bodies, from the National Loans Fund.

It is an arm of the Treasury that has been helping finance capital spending by local government since 1793.

Local councils are able to borrow at rates much lower than private sector borrowers can obtain in order to invest in property, that shows a much higher yield.

Money borrowed at 2.5percent or so is typically going into property yielding six to eight percent or more.