Issue - meetings

Cabinet Member with Special Responsibility Councillor Evelyn Archer)

Report of the Corporate Director (Finance and Performance).  

(Cabinet Member with Special Responsibility Councillor Evelyn Archer)

The Corporate Director (Finance and Performance) submitted a report that advised Members of the current situation at Lancaster Market and provided options for the Council to consider in terms of the future of the Market. 

The options, options analysis, including risk assessment, were set out in the report as follows: 

Option 1 – No Change. The Council would continue to operate the market and this would result in a continued deficit being incurred at the market in excess of £400,000. However, a recent announcement has been made which has indicated that the freehold of the market is to be sold which may result in some changes to the form of the landlord’s management. At the time of writing, this is most likely to be a sale of the whole Marketgate Shopping Centre rather than just the Market Hall building. It may be that from the sale, there could be some reductions in the level of service charge payable by the Council. Alternatively, charges could increase, though this would have to be agreed with the City Council. Until the new landlord is in place, no estimate can be given, but a substantial deficit will remain for the Council. 

Option 2 – The Council to acquire the freehold of the market. This option has arisen as a result of the recent inclusion of the freehold of the market building in a public auction. Had the auction proceeded, this option would have been a possibility in that the Council could consider the cost of borrowing against the cost of renting the building. However, the freehold of the market was withdrawn from the auction and at this time, this option is not available to the Council as the existing landlord is understood to be including it in a sale of the whole Marketgate Shopping Centre. Should such a sale fail, or if a new landlord wished to rationalise the property holding, this option may become possible at sometime in the future. 

Option 3 – Increase Income. This has been the policy of the Council for the last 2.5 years. It is clear that the demand for stalls in the market is limited and whilst new traders arrive, existing traders leave. This gives limited opportunity for increased income. Rental levels are at a point where there is little scope for an increase without the real potential for traders leaving the market resulting in a worse position for the Council. Option 3 is directly linked to options 4 and 5 below. 

Option 4 – Reduced expenditure. A complete look at the expenditure has been undertaken which has shown that there is limited scope for further reductions. A high proportion of expenditure is taken up by the rent and service charges payable to the Council’s landlord which amount to approximately £506,200 per annum with a rent review outstanding which could lead to an increase in this amount. As an alternative, the Council has considered a proposal by the Landlord  ...  view the full minutes text for item 108