Risks, delays & cost increases as York Council struggles to manage its commercial portfolio

York Guildhall

Yesterday’s announcement that more than £15 million of infrastructure schemes had been secured in North Yorkshire over the next 18 months – with £300,000 of funding going towards the York Guildhall offices project – will have been welcomed by many.

The money comes from the Government’s “Getting Building Fund” which “aims to boost economic recovery from Covid-19”.

According to a Council spokesman, the funding will now be used “for internal fit-out works” on the business club which will occupy much of the building.

That will come as a surprise to those who thought that the agreed £20.18 million budget included all costs. Indeed, the option approved by the Council in February 2019, specifically identified £300,000 for “fixtures, fittings and furniture”.

Council report 2019. Option 1 was agreed

It seems that the only change is that this expenditure will now be funded from general taxation.

Even with this subsidy, and assuming that all offices and the on site restaurant, are all occupied, York Council taxpayers still face an annual bill of over £500,000.

An Executive meeting which took place last week was told in an update on the Guildhall project that “additional delays have meant that it is presently considered that these additional costs cannot be contained within the agreed contingency”.

The scale of the over expenditure was not revealed.

The Guildhall is not the only commercial portfolio project to come under scrutiny.

Some independent commentators are sceptical about the timing of the Councils £2.8 million acquisition of 25/27 Coney Street. Rent levels are now dropping and with them property valuations in some high streets. Coney Street is struggling more than most.

Meanwhile large numbers of Council owned properties remain empty and unused.

These include Ashbank (empty for 8 years), 29 Castlegate (3 years), Oakhaven (4 years) and Willow House (4 years 6 months).

Willow House stands abandoned with no sign of redevelopment work starting.

We now understand that Willow House – which was advertised for sale with Sanderson Weatherall – has been withdrawn from the market. The Council turned down a £3 million offer for the prime site shortly after it became available.

None of these properties are accommodating anyone.

All are incurring maintenance and security costs for taxpayers, while at the same time attracting no Business Rates or rent income.

At a time when local authorities are on their knees financially, poor resource management is a matter of concern.

York Council’s longest empty property Ashbank set to be sold.

Council report on empty property avoids any comment on its own poor performance

The planning committee yesterday approved plans which would see the former Council offices at Ashbank on Shipton Road converted into apartments.

Ashbank has been empty since 2013.

The news comes a few days before a report on empty property in the City is due to be discussed by the Council’s Executive.

It follows claims in 2018 that the City had a relatively large number of empty properties. At the time that seemed – given local land and property prices – unlikely but the Council agreed to review the issue. The review wasn’t aimed at bringing unused space (e.g. floors above shops) into use but rather focused on those properties where empty property tax relief was being claimed.

Last September the Council increased the Council Tax liability on long term empty homes to 300%.

National statistics confirm that York has the second lowest level of empty homes in the country (after Oxford).

The Council claims that it has helped to bring back in to use 45 long term empty properties, through advice and assistance, since April 2017.

An audit of properties shown as empty on the Council tax database found that 43% of those visited so far are either occupied or about to be occupied.

Only 150 (27%) of properties visited were found to be empty. Nearly half of these empty homes were undergoing refurbishment, currently up for sale or let or awaiting site redevelopment.

In only 10% of the cases (15 properties) the owner appeared to have no immediate plans to bring the property back in to use.

One unintended consequence of the audit may be that some owners, who have been claiming empty property tax relief, may find that they now receive a substantial bill.

The report pointedly fails to mention the Councils own housing stock. Leaving aside delays in re-letting Council houses, the list of empty properties owned by the Council – which includes some residential homes – clearly merits further investigation.

Whether the Council’s Executive will order a probe into their own performance will become clear at next Thursday’s meeting

Shocking list of empty Council owned properties in York

Thursday can’t come soon enough for York taxpayers. On that day the City’s planning committee will decide whether to allow the Ashbank former social services building on Shipton Road to be converted into residential accommodation.

Ashbank has now been empty for a shocking 7 years.

Together with the Guildhall, it is the Councils most underused asset.

The above list was produced in response to a Freedom of Information request. The rates column indicates what the Council might have received if the properties had been let. To this must be added either the proceeds of a sale or lease income.

Several other valuable properties including Oakhaven in Acomb and the prime Willow House site next to the bar walls have also now been unused for over 3 years.

There are ongoing maintenance and security costs at each site.

The list does not include several brownfield sites which are suitable for development. These include the land to the rear of Acomb Library which was purchased 12 years ago but remains unused (currently it is a building compound).

Many years ago the Council used to have a Policy and Resources committee. One of its tasks was to challenge and optimise the use of the Councils portfolio. Sadly it was replaced by a “scrutiny” committee which rarely expresses any interest in the efficiency of the Councils processes.

Six monthly capital programme reports to the Councils Executive often fail to provide an update on long term unused assets. When they do get a mention it is restricted to a couple of anodyne sentences.

It is not just commercial properties that are a cause for concern.

The Councils housing department still often has a 10% vacancy rate on its garage blocks. There are waiting lists for garages in most parts of the City. Some of the garages are located in the City Centre where demand is high.

The housing department has been told to advertise all vacancies in order to maximise income. They have failed to do so.

They don’t even make full use of free social media channels.

The result is that the Council loses thousands of pounds of income each month while on street parking spaces becomes unnecessarily congested.

Major housing plans in York set to get go ahead next week

Proposals to develop two long term empty sites in York will be before the planning committee next week. Together the development of the sites could provide nearly 700 new homes in the City.

Gas works site, Heworth Green

The proposal is for the erection of a maximum of 625 residential apartments, 130 sqm of retail or community use floorspace.

Two gas governor compounds will be retained, and the site will be remediated with the old gasholder removed and gas pipes relocated underground.

The plans cover associated access, car parking, amenity space and landscaping after demolition of existing pipework, structures and telephone mast.

The brownfield site is allocated for housing in the revised York Local Plan. The site is no longer classified as contaminated.

The plans would see 370 one bed, 194 two bed and 61 three bed apartments built.

The report suggests that 20 social rent houses will be provided (off site) as part of the plans. In addition around 130 of the on-site apartments will be available for private rent, discounted by 30%.

There have been concerns registered about inadequate car parking arrangements and the York Civic Trust has said that the plans are an “overdevelopment”.

The development will cost £154 million. It is recommended for approval by Council officials.

Ashbank Shipton Road

Ashbank – scheduled to be converted into flats since 2013

Another long term empty property badly in need of redevelopment are the former Council offices at Ashbank. The building has been empty for over 8 years and is still owned by the York Council.

The application involves the demolition of Barleyfields and erection of 54 assisted living apartments and communal facilities. The modern extensions to Ashbank would be demolished and the building converted into 4 assisted living apartments. There would be changes to parking and landscaping arrangements.

Planning permission was previously granted for four 2½ storey dwellings to the rear of Ashbank with conversion of the villa to 5 apartments. This permission has not been implemented.

12 of the new units will be “affordable”

There have been 12 objections registered some connected with the loss of tree cover (although replacement planting is proposed) and building height

The site is classified as “brownfield”

Officials are recommending approval of the plans

York Councils empty property list revealed

Freedom of Information response confirms that buyer has pulled out of deal to buy 29 Castlegate

List of long term empty properties in York owned by the Council

The York Council has confirmed that it owns 12 substantial properties in the City which have been empty for over 6 months.

Two of the properties, Ashbank and the Guildhall, have been unused for over 6 YEARS.

Ashbank was reported as being sold for £1.3 million a year ago. The Council now just says it is “sold subject to contract”.

The new Executive is expected to review the affordability of a £20 million scheme at the Guildhall which would see the creation of a “business club” there. If the project goes ahead, work will start in the autumn with reoccupation expected in 2021.

The estimated total value of the assets is put at between £30/40 million.

Little attempt has been made to secure short term lets for the properties which include prime sites like 29 Castlegate, the former youth advisory HQ.

Most of the properties have been exempt from paying business rates. Had they been occupied then Council taxpayers would have benefited from an additional £200,000 a year in income.

To this would be added rental income of around £400,000 a year or a substantial capital receipt.

The Castlegate property was to have been purchased by the York Conservation Trust with the York Civic Trust hoping to subsequently lease the building as part of its expansion plans for the adjacent Fairfax House.

The agreed purchase price of £430,000 was criticised at the time as being “too low” for a building in such a prime site.

Now the Council says that it was notified on 21^st May that the Conservation Trust would not be purchasing the building. However, the York Civic Trust had been told the same at their AGM last year. The Council say that they are now “reviewing” the position.

No public reports have been made on asset utilisation issues at the York Council this year.

The Council is spending around £80,000 a year on maintaining and securing the properties.

Only one of the properties has a temporary occupant (20 Piccadilly)

The table does not include underused assets like 19/21 Piccadilly (Spark) or land with a development potential. The latter includes land purchased in 2008 to accommodate an extension to Acomb Explore Library and which has been unused ever since.

The Council says that it has only one Council house, at Glen Lodge, which has been empty for longer than 6 months.

The Council Housing department has been criticised in the past for allowing some of its estate garages to remain empty for extended periods of time.

The revelations have led to calls for a more proactive approach by the Council in the use of its assets. The new Council leadership has been advised to reintroduce a 6 monthly public report on empty property issues.

It may be that the time has come for the York Council to seek outside help in managing its huge commercial building portfolio

Ashbank sale set to net Council £1.35 million

Ashbank – scheduled to be converted into flats since 2013

The former Council offices at Ashbank on Shipton Road are set to be sold to Anchor Housing. They own the adjacent “Barleyfields” site.

The building has been empty for over 7 years.

The current offer is for £1.3 million.

Anchor hope to build 51 leasehold apartments on the site. The apartments are aimed at retired people.