Middlesbrough's House of Fraser store to be sold off

At a meeting of the Executive on Wednesday, members agreed to dispose of the former department store, as well as the Zetland multi-storey car park in the town. Deals on both sites are yet to be concluded but councillors were told the Middlesbrough Development Corporation (MDC)  had met valuations for both properties.

The MDC made a bid for the two sites late last year. Following the publication of a report to the Executive which revealed the potential buyer, the MDC confirmed its ambitions for House of Fraser to become an asset.

A spokesperson said: “The plan for the building will see investment as part of the region’s emerging investment zone. The Development Corporation and Middlesbrough Council have both agreed a mechanism to agree a valuation for the building, but agreement on a valuation itself has not yet been reached by either party.”

House of Fraser (Image: LDR)

The valuation has not been revealed. However a business case for the disposal, presented in a report to the council’s Executive, said the sale would generate “a significant capital receipt” for the cash-strapped local authority.

It also said the building requires major investment to be brought back into use – “beyond what Middlesbrough Council can alone provide”. Last month, the council revealed they had been awarded £2m of Levelling Up funding to pour new life back into the landmark building as part of a £20m investment programme to revitalise the town.

The council’s Executive was subsequently asked to approve the plans to approve a cultural and music site at the site. It is now understood, when the building is sold, the council could apply to use the funding earmarked for the building elsewhere in the town.

A Middlesbrough Council spokesman said: “The potential sale of House of Fraser is not linked to the Levelling Up Partnership funding award. It is possible however, that the prospective new owner of the building will include the culture offering as part of their plans.

“We will discuss this with them. If necessary, the council has the option of investing the money allocated for cultural uses in an alternative venue, subject to Department for Levelling Up, Housing and Communities approval.”

Middlesbrough Council bought the building for £1m in 2020. The House of Fraser store closed in 2022 and has stood empty since, incurring “significant holding costs” for the local authority – around £100,000 a year.

The report to the Executive said the “mooted” disposal of the building would deliver “substantial capital investment in Middlesbrough” while “facilitating the regeneration of an unutilised and prominent town centre building.” It added: “This transition is a step in the right direction towards revitalising the town and achieving its transformation goals.

“As well as the above regeneration benefits, given that the TVCA [MDC] have met the independent market valuation for the property, it is considered appropriate for the Council to proceed with a disposal via private treaty on this occasion.”

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Regarding the Zetland car park, the council said the running costs exceed income by almost £19,000 a year, although this is mitigated by the £26,500 income achieved through the solar panels on the roof of the building. The report said: “The sale would therefore represent a small loss of income, although any repairs required each year would clearly negate that income if the property was retained.”

Following the Executive agreement to dispose of the sites, responsibility for the negotiation of the final sales value of each property will be delegated to the council’s director of finance and the director of regeneration.

The Zetland car park and House of Fraser building were included in council plans to sell-off a raft of assets in an effort to avoid a section 114 notice and generate capital receipts of an estimated £33m. The Executive approved the proposals in November.

Cllr Theo Furness, Executive member for regeneration, said: “These sales will represent best value for Middlesbrough and remove ongoing costs for the Council. The sale of House of Fraser will bring new investment into a really important town centre site.”