Crunch time for Council as officials recommend borrowing £7 million to spend on Guildhall project

Heritage Lottery Fund refuses financial help

Senior York Councillors are being recommended to let York taxpayers bear the bulk of the risk in a  new Guildhall office project.

click to enlarge

click to enlarge

Although the redevelopment has shed its pretentious “media centre” label – attached by the last Labour administration as they adopted a £9 million development scheme – the new project seems to be a case of the “Mayors new clothes”.

Little has changed as the rookie administration is asked to plunge the City further into debt. Each York residents already owes £1326 each  following previous Council decisions.

The Council have clearly failed to find a public sector partner who was willing to bear the financial risks involved in converting the complex into a “serviced office venue with virtual office and business club facilities”.

There is welcome news that the Councils traditional civic headquarters – the Guildhall itself and adjacent Council chamber – will continue to be publicly accessible.  Officials project income of £80,000 a year from these facilities although this is likely to be dwarfed by ongoing maintenance, energy and caretaking costs.

The project also incorporates a restaurant and café/bar.

The main criticism, of the new Council approach is likely to be that it has failed to test the market for the site. While for many,  retaining the historic building in public ownership was a “given”, the so called review process undertaken in the summer turned out to be little more than a cosmetic exercise. Despite the obvious access difficulties for commercial use, alternatives such as hotels or residential were neglected.

York Guildhall

York Guildhall

Apartments in the City centre are fetching astronomical prices and the offer of a river view would be irresistible for many. In Clifton Moor the owners of offices have found it impossible to let them. Ironically, many are now being converted into flats.

If the Council has to borrow £7 million to fund the scheme, then debt repayment costs of around £600k a year – for 30 years – will have to be paid. The recommended scheme generates only an estimated £362k in annual rental income and that assumes a high occupancy level.

The Heritage Lottery Fund has now formally turned down a request for a grant so that is one source of funding which has disappeared.

So York residents will be hoping that subsidies from the LEP and similar bodies will offset the burden.

Without them – and a lot of luck – the project could be a burden on generations of York taxpayers for decades to come.

2 thoughts on “Crunch time for Council as officials recommend borrowing £7 million to spend on Guildhall project

  1. […]  Taxpayers therefore still face a potential bill of up to £7 million. […]

  2. […] to test the market at a time when residential land prices in the City centre were rocketing.  Inexplicably they chose to add £7 million to the Council debt burden as they opted to build a “serviced offices” […]

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