Newcastle City Council today approved McAleer & Rushe’s £100m plans for a mixed-use scheme in the Newgate Street area of the city which will create almost 400 construction jobs.

The proposals include a 269-bedrooms hotel, student housing and 2,000 sq m of commercial space for retail, leisure or professional services use.

McAleer & Rushe also announced that the 575-bedrooms student housing element of the scheme will be operated by the UK’s leading provider of purpose built student accommodation, Unite Students.

The creation of 575 new student rooms will deliver £2m of net additional expenditure into the local economy. Unite already provides a home for over 46,000 students in 133 properties across 28 of the UK’s strongest university cities.

Nick Hayes Development Director at Unite said:

“We are delighted that planning consent for this exciting new development has been granted. The project forms an important part of Unite Students‘ ongoing regional development plans.

“Our core purpose at Unite Students is providing our students with a ‘Home for Success’. This means helping them achieve more from their time at university, whether that is academic success, personal growth or employability.

“Newcastle is an exciting university city attracting students from across the UK and internationally. As well as easing pressure on private residential housing in the area this new development will provide an important contribution to the local economy.”

McAleer & Rushe’s has delivered in excess of 20,000 hotel bedrooms and is on target to deliver 7,500 student bedrooms within five years of entering the student accommodation sector. The Northern Irish developer and contractor’s previous schemes in the locality include a major hotel, office and residential scheme at St James’s Gate and the 204-bedroom Jurys Inn NewcastleGateshead Quays.

Plans for a previous scheme for the Newgate Street shopping centre site were enhanced following extensive consultation with a myriad of stakeholders including Newcastle City Council and Historic England.

The scheme will be finished in natural stone to further complement the rich heritage of the surrounding buildings of Grainger Town. The overall size of the student and commercial elements were reduced and the hotel size increased, which has enabled McAleer & Rushe to enhance the public realm with the creation of new landscaped courtyards and a roof terrace. There will be a car parking and bike storage at lower ground level.

McAleer & Rushe Project Director Graham Mitchell said:

“This scheme has evolved through extensive consultation with many stakeholders. Today’s announcement is the culmination of a lot of hard work, engagement and collaboration to deliver the best possible scheme. We hope to start on site in 2016 and to deliver the student element by summer 2018. However this is a very challenging site and there are still a number of complexities across the 1.75 acre site, particularly in terms of the prominent city centre location, that we have to resolve.

“This £100m scheme signals McAleer & Rushe’s commitment to, and confidence in the City of Newcastle and we look forward to bringing forward further schemes. We are currently in discussions with a number of potential hotel partners for the hospitality element of this project.

“The addition of high quality student accommodation operated by Unite will ensure that Newcastle remains an attractive city to prospective students who will have the opportunity to live in modern and safe accommodation within close proximity to their university, city centre amenities and transport links. This in turn offers an opportunity for other areas within the city to be regenerated, as houses previously in multiple student occupation can be returned to family homes”.

Mitchell believes the demolition of the existing down at heel shopping centre will improve the aesthetics of the wider area, creating a more pleasant environment for pedestrians and improve the experience for all, particularly in the context of continuing re-positioning by the Crown Estate of The Gate, the Eldon Square Shopping Centre and the NE1 Bigg Market enhancement proposals.

Ian Kettlewell, Planning Director at the Newcastle office of Nathaniel Lichfield & Partners who advised on planning also highlighted the economic benefits the scheme would bring to this area of the City.

“Today’s news will deliver a £9.1m per year boost to the local economy over the two year build period. Not only will it support 390 direct construction jobs throughout the duration of the build but it will create a further 590 spin-off jobs supporting the supply chain and related services.”

“Once complete, the development will create up to 100 additional permanent jobs and up to the equivalent of 50 permanent jobs involved in the local supply chain”.

It has also been calculated the scheme will generate £3.4m of new homes bonus payments for Newcastle City Council and £450,000 of additional Business Rates receipts per year.