Guildhall lease being signed

The Council is apparently on the verge of signing a lease which will see the University of York take over the running of the York Guildhall. It was reported some time ago that they will try to establish a business club on the premises.

The Council has reserved a right to use the Council chamber for their meetings.

The hugely expensive (£21.7 million) renovation project has already run over budget. There are fears that further cost increases may be in the pipeline.

A report to a meeting taking place today, says

“The early project challenges associated with the underpinning, piling, high river levels and archaeology, which extended the contract period and costs were report last November, along with the agreed mitigation measures and budget support. There is ongoing budget pressure in relation to the projected contract out-turn and this will continue to be repeated through future monitoring reports. However, the project is on track to deliver the agreed outcomes and the lease agreement with University of York Science Park Ltd should be concluded in the next quarter, securing the agreed income generation”

The comment about the University lease has prompted some social media comment with conservation groups keen to ensure that public access is maintained at least for the key historic parts of the site (Guildhall, committee room 1, Council chamber).

The original hope had been that more access would be available to access previously “off limits” areas.

These include the historic battlement river frontage and the, now subterranean, “Common Hall Lane”

So far the Council has given no guarantees on this issue.

In turn “York Walls” has now tweeted saying that the Universities record on allowing public access to other historical buildings such as Kings Manor and Heslington Hall gives them cause of concern.

Some work to do here we think!

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.

£20 million contract signed for the conversion of the Guildhall into a business club

Almost comatose leadership has allowed the York Council to slip into a £20.2 million project which will see the Guildhall and neighbouring development site converted into a business club and restaurant.

Weed infested, stonework stained, windows caked with dirt. The neglect of the Guildhall since 2012

Neglect of the Listed building since 2012 means that some of the money will be needed to underpin parts of the old building while an new roof will also be necessary.

On even the most optimistic of income estimates, York Council taxpayers will be left with an annual bill of £574,000. Most of this is interest charges on additional borrowings of £16 million.

One of the city’s most historically significant buildings will begin its first major restoration in over 60 years this September.
Read more here: https://t.co/UfbngtUG4u @NigelCllr @AndrewWaller1 @VINCI @BBCLookNorth @yorkpress @minsterfm @BBCYork pic.twitter.com/JMi6Iq0dxb
— City of York Council (@CityofYork) September 19, 2019

The York Councils PR department has been busy working on a, very awkward looking, video seeking to justify the £20 million scheme. Their time might have been better spent updating residents on what is being done to address failings with the bin emptying service, overgrown paths etc.

There have been numerous occasions over the last 8 years where decisive leadership interventions could have reduced the risk to taxpayers. (click)

So now we move on to managing the contract and subsequently letting the newly created space.

The Council has committed itself to a £20 million cost envelope and an opening date in “spring 2021”.

The Councils record on major capital projects has not been good in recent years. The £42 million Community Stadium costs escalated from an original plan to invest £16 million and, 3 years after its target completion date, it is still not open.

Taxpayers will be monitoring progress on the Guildhall project with anxiety. Even after completion the authority will be faced with the task of renting out the new office space for £595,000 per annum. Failure to do so would mean an increased subsidy from taxpayers.

Ironically the Council may then find that it is in competition with itself as some of he office space being built at the Community Stadium site has still not found an occupier.