Bring back JESSICA – and soon

Dec 10 2008 by Kevan Carrick, The Journal

I READ with interest One North East’s recent announcement on the new £125m JEREMIE super fund that will come into fruition in 2010 (Journal, November 22). It did, however, raise the question whatever happened to its sister fund JESSICA?

JESSICA – or Joint European Support for Sustainable Investment in City Areas – is another initiative of the European Commission in co-operation with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB).

Its aim is to promote sustainable investment, growth and jobs in Europe’s urban areas.

It was designed to replace the ERDF gap-funding that ended in 2006 which allowed developers to apply for a one-off payment from the regional development agency (RDA) to help fund projects where the overall costs were higher than the end value of the final scheme.

It’s now more than two years since gap-funding ended and we all should be asking the question – when is JESSICA going to make an appearance?

The real beauty of JESSICA is that funding takes the form of equity (unlike the former one-off payment gap-funding), meaning that public money is invested at an early stage and remains at the very heart of a project until its successful completion.

From the initial outset of buying land, carrying out remediation, to construction and developing surrounding infrastructure, RDAs will now have an equity stake in urban developments and work jointly with private developers to regenerate whole sites.

By leveraging public resources through private sector collaboration, JESSICA will bring not just money, but complementary skills and resources and a partnership approach that will require a strategic, long-term vision and technical management competences from both local authorities and the private sector.

Crucially, it will remove a great deal of risk on the part of investors.

News from the RICS is that JESSICA is still alive and kicking but having a very slow start. My view is that UK Government and RDAs need to take action now to get JESSICA rolling as soon as possible to help those many projects that have stalled because of the economic downturn.

Now is the time to plan and prepare and for the North East JESSICA will be vital to help fuel economic growth, create new jobs and future sustainable regeneration. Bring back JESSICA, and soon.

Kevan Carrick is partner in JK Property Consultants and policy spokesman for RICS North East