A ‘multi-million pound’ project approved by Sunderland City Council leaders

City leaders on Wearside have agreed a multi-million pound programme of “essential repairs and maintenance works” to council-owned industrial units.

Sunderland City Council’s cabinet of senior cllrs, at its most recent meeting in June, 2025, approved plans to “procure and award” building contracts for units 11 and 12 at Mercantile Road in the Rainton Bridge area, Houghton-le-Spring.

Cabinet documents state the council owns the freehold interest in both units and that Lear Corporation, a “global leader in seating and E-systems and a sub supplier of Nissan Manufacturing UK”, occupies both units via two subsidiary companies.

A report presented to cabinet members said Lear had “reported several issues regarding the condition of the properties and the need for repairs and maintenance to preserve the integrity of the building envelopes”, with the “most significant concerns relating to water ingress”.

At a cabinet meeting on 26 June, 2025, at City Hall, a report noted that the council had commissioned a survey of the buildings to “identify the full extent of repairs and maintenance required”.

While current lease agreements see the occupier take some responsibility for the costs of the works, the council as “landlord” is responsible for the majority of works and will have to spend an estimated £4,013,546.

This includes £1,380,366 for unit 11 and £2,633,180 for unit 12, with works classed and scheduled as “urgent” and “non urgent”.

A cabinet report stated that urgent works would be “completed in Spring, 2026” and that non urgent works would be “completed later in 2026 to optimise cash flow and logistics”.

The cabinet report, in a section on “financial implications”, added that the “total estimated cost of the works to be funded and undertaken by the council is £4.014 million, with £1.030 million profiled in 2025/2026 and £2.984 million in 2026/2027”.

It was noted that the “indicative cost of the works is based on estimates provided by consultants” and that “costs are yet to be
validated through a contractor procurement but are based on industry standard rates and include appropriate contingencies”.

The cabinet report added that “if the essential repairs and maintenance works are not completed urgently there remains the risk of further damage and increased long term management and maintenance costs.”

A report on the industrial units was delivered to the cabinet last week by cllr Kevin Johnston, cabinet member for housing, regeneration and business.

Cllr Johnston said the occupier Lear had reported issues with the properties over the last year and that a maintenance survey was commissioned in spring 2025 to “identify the full extent of repairs and maintenance required at the premises”.

“The total estimated cost of the works to be funded and undertaken by the council is £4.014 million and the works will be phased […] and can be funded from available resources within the approved capital programme,” he added.

“As both lease agreements are due to expire in December, 2026, the council would need to complete the works to facilitate the lease renewals, or new leases with alternative tenants, helping to secure an ongoing revenue stream.

“There is therefore no benefit in delaying the completion of the works.

“Should Lear decide to renew the lease agreements the council will seek to renegotiate the lease terms to reduce its future liability for repairs and maintenance.”

The cabinet report is available to view via Sunderland City Council’s website.