Heart transplant

Construction is already motoring along nicely in Britain's second city after a wave of leisure developments was granted planning permission. The first, Richardson Developments' £75m Star City entertainment mecca at Spaghetti Junction, is under way, and more multimillion-pound projects are due to start on site in April. These include Millennium Point, a lottery-funded interactive science centre, and the Mailbox, a scheme to turn a former Royal Mail sorting depot into one of Britain's largest mixed-use developments. No wonder Birmingham folk are upbeat about the city's prospects.

But there is one black cloud on the horizon. If the BMW factory in Longbridge closes, developers could find it hard to fill the shopping malls and multiscreen cinemas with punters keen to spend their money. An estimated 50 000-60 000 people could be affected, many of them employed by small firms that depend on orders from the plant. The uncertainty over Longbridge means the whole region is holding its breath, says Neil Beech, Currie & Brown's Birmingham office partner. But, as he points out: "No one's quite worked out what it means for us in construction yet."

Urban regeneration, however, backed by the city's planning department, has helped confidence and stimulated further development. In the meantime, Beech says: "We are extremely busy and enquiries are probably slightly up on this time last year." The firm is working on a scheme at Birmingham Airport, where a £260m expansion programme is one of the region's biggest projects.

The city council's economic development department estimates that £1bn of city-centre development work is due to start in Birmingham this year. Figures from research group Glenigan are equally positive. Birmingham's 118 projects at detailed planning stage amount to £974.6m of work. In the West Midlands as a whole, the figure rises to £1.4bn. The Birmingham Alliance, as the Hammerson, Henderson and Land Securities joint city centre venture is known, predicts that the Martineau and Bull Ring schemes will create 3000 construction jobs.

With this amount of work forecast, local contractors and consultants are beginning to talk about skills shortages. Bucknall Austin managing director Tony Bevan says the severity of the problem will depend on how many schemes are on site at the same time. He says there is no reason to worry about tender-price inflation now but adds that it is likely to be a concern in the coming year: "There will undoubtedly be a staggered start on many of the major schemes, but any contractor working on one of them would be wise to be very wary about any fixed-price elements in contracts."

Steve Jennings, Galliford's sales and marketing director for the Midlands, is also concerned about skills shortages. "There could be localised problems," he admits. Thomas Vale director Tony Hyde anticipates problems in the next two years.

Thomas Vale is one of the few local contractors, other than Tarmac, winning any sizeable work in Birmingham. Enquiry levels are up 10-15% on last year and the firm has won work with Railtrack, local office developer St Modwin and the lottery-funded Dream Factory theatre in Warwick. Tarmac has been appointed on Richardson Developments' leisure complexes, Star City and Five Ways, as well as the £50m Mailbox scheme.

Local architects, too, have largely missed out on major projects – there seems to be a dearth of local firms that can take on big commissions. The exception is Associated Architects, which has produced an innovative design for the mixed-use Mailbox development and designs for the Hippodrome theatre.

With so many major schemes about to take off, Les Sparkes, the city's director of architecture and planning, says it is an exciting time to be working in Birmingham, particularly now the Bull Ring redevelopment has been secured.

"It's a great weight off our minds," he says. "The Bull Ring scheme had been cast in some doubt as a consequence of the competition it faced from the Martineau development. I'm thrilled to bits." Developer Hammerson is confident about the city's retail potential, and assistant development director Charles Elliott dismisses any suggestion that the closure of Longbridge could affect the viability of the Bull Ring or Martineau schemes.

"We're aiming at a catchment area of seven million customers, so it would only cause us a minor blip," he says. He confirms that no contractor has been appointed for either scheme yet, but says York-based Shepherd Construction is in a good position to win work on the new indoor markets at the Bull Ring.

  Another hot spot is Brindleyplace, Birmingham's fifth public square, which opened in 1995. Gary Taylor, director of developer Argent, says that buildings four, six and nine are due for completion this year and maintains that demand for office and leisure space is back with a vengeance, after a rather flat pre-Christmas period.

"Everyone was talking about a downturn towards the end of last year," says Taylor. "A couple of restaurant operators put projects on hold last autumn, then released them in the new year, which is always a good indication of the market."

Local developers the Richardson brothers obviously have faith in Birmingham and the leisure sector, and they are putting their money where their mouth is with the £75m Star City and the £25m Five Ways leisure developments, both of which are already on site. "We've got the scope. The capacity is there," says Lee Richardson confidently.

Birmingham residents take it as a good sign that the Richardsons, and now the Birmingham Alliance, are willing to invest in their town. The city feels its star is rising, despite question marks such as the one hanging over the towering, HOK-designed £300m Arena Central scheme. The project was dealt a blow when John Prescott announced it would be subject to a public inquiry.

Fiona Mottershead of local architect D5, which is working with Laing's architect on designs for the Birmingham Airport extension, sums up the situation in Birmingham: "We're increasingly and consistently busy. And contractors I've been in touch with seem quite happy – which is unusual."