Agenda item

(CSP: SLE, HQL and HQL1)

Purpose: To consider the transfer of the freehold of the Corn Exchange premises to the Corn Exchange (Newbury) Trust (CET) in order to strengthen the sustainability of the trust in the long term.

Resolved that:

·         The Head of Public Protection and Culture shall, in consultation with the Head of Finance and Property and Head of Legal Services, transfer the freehold of the Corn Exhange building to the CET for the sum of £5 subject to satisfaction of statutory provision in relation to disposal, and negotiation and completion of appropriate legal documentation.

·         The Head of Public Protection and Culture agree with the CET a list of any outstanding minor works that it is necessary for the Council to carry out under the terms of the current lease with reference to the 2015 condition survey.

·         A six week period of public engagement be conducted in January/February 2018 to assess whether the proposal has any negative impacts for the public and the arts in West Berkshire.

This decision is not subject to call in as:

·      a delay in implementing the decision could cause the Council serious financial implications.

therefore it will be implemented immediately.

The Executive considered a report (Agenda Item 7) concerning the proposed transfer of the freehold of the Corn Exchange premises to the Corn Exchange (Newbury) Trust (CET) in order to strengthen the sustainability of the CET in the long term.

Councillor Dominic Boeck introduced the report. The Corn Exchange, which was built in 1862, was a well loved building enjoyed by residents of Newbury and surrounding areas. In 1993 it opened as an arts centre and on 1 June 2000 the Council transferred the operation of the building to the CET who leased the building for 99 years. The CET paid no rent.

A five year Service Level Agreement (SLA) was in place with the CET and this was due to expire on 31 March 2019. By that date, the Council would have invested a total of £1.25m over the period of the SLA, despite the reductions to the grant paid in recent years as a result of the reducing Revenue Support Grant. However, no contributions were planned by the Council from April 2019.

Councillor Boeck had been involved in discussions between Officers and the CET to explore how best to enable the CET to continue to operate. The potential to transfer the freehold had been discussed and this had been formally requested by the CET, hence this report and its recommendations. Subject to the approval of the recommendations and a positive outcome from the six week period of public engagement, the freehold would be transferred. This would include the fabric of the building remaining with the Council, but the responsibility for building maintenance/repairs sitting with the CET.

Councillor Boeck proposed acceptance of the recommendations. Approval of this approach would help to sustain the CET and the use of the Corn Exchange to the benefit of West Berkshire residents.

Councillor Hilary Cole seconded the proposal. This work commenced when she was the Portfolio Holder for Culture and she was pleased to see that the efforts of all involved had reached this proposed positive conclusion under the stewardship of Councillor Boeck. Councillor Cole continued by commenting that this constituted a win-win for the two parties, the CET would have greater control of the operation of the Corn Exchange and the Council’s responsibilities and costs would be reduced.

Councillor Graham Jones added his endorsement to the proposed approach.

Councillor Keith Chopping explained that while the grants paid to the Corn Exchange had reduced in recent years as described, the Corn Exchange had been the recipient of substantial grants from the Council over a number of years. He too welcomed the recommendations and wished every success to the CET for the future.

Councillor James Fredrickson queried proposed changes to the governance arrangements for the Corn Exchange between the Council and the CET. Councillor Boeck explained that the transfer of the freehold was subject to a number of covenants. These included the inability for the CET to sell the building without the consent of the Council and continued use of the building for education and cultural purposes. The details of the transfer were still to be finalised, but the CET had indicated continued education/cultural use.

Councillor Alan Macro noted that public engagement of six weeks was planned over January and February 2018, but he queried what action would be taken if a particularly negative impact was highlighted from the consultation and whether the decision could be reversed if this proved to be the case. Councillor Macro felt that it would have been preferable to consult prior to proposing a way forward.

Councillor Boeck stated that the outcome of the consultation would be awaited and should a particularly negative response be forthcoming then plans could be reconsidered. He did however feel that any concerns in relation to the transfer of the freehold could be addressed within final plans.

In terms of the timing of the consultation, Councillor Boeck explained that this was influenced by time pressures. The CET was seeking an early resolution to enable them to proceed with obtaining Arts Council funds before the current deadline for this closed. The proposals were considered to represent the most expedient way forward.

Councillor Macro queried whether it was prudent to transfer the freehold of the building for a sum below its market value. He did however note from the report that this could be acceptable subject to certain conditions, including if the difference between the market value and the consideration did not exceed £2m. Councillor Macro also asked whether the building had been valued.

Councillor Boeck explained that a sum in the region of £2k to £3k would be spent to obtain a commercial valuation of the building. Councillor Macro queried if consent for the transfer for the sum indicated in the report would need to be obtained from the Secretary of State if the value was higher than anticipated. Councillor Boeck gave the view that this was unlikely to prove necessary.

RESOLVED that

·         The Head of Public Protection and Culture shall, in consultation with the Head of Finance and Property and Head of Legal Services, transfer the freehold of the Corn Exchange building to the CET for the sum of £5 subject to satisfaction of statutory provision in relation to disposal, and negotiation and completion of appropriate legal documentation.

·         The Head of Public Protection and Culture agree with the CET a list of any outstanding minor works that it is necessary for the Council to carry out under the terms of the current lease with reference to the 2015 condition survey.

·         A six week period of public engagement be conducted in January/February 2018 to assess whether the proposal has any negative impacts for the public and the arts in West Berkshire.

Other options considered:

·         Continue with the current 99 year lease with the CET under which the Council is responsible for major capital maintenance costs throughout the term of the lease.

·         Disposal of the asset at a commercial value. This could only be achieved if there was no leaseholder in possession of the premises and change of use was to be granted.