Sparks fanned as Council lets down taxpayers

The controversial Spark container village on Piccadilly will not have to provide a rent bond or guarantor for their new lease.

The requirements were agreed in February by Executive Councillor Nigel Ayre as part of a package aimed at securing taxpayers interests.

The Spark owners had promised a share of profits on the scheme when, in 2016, they first promoted the idea of moving second hand shipping containers onto the Piccadilly site.

The profits never materialised and there were delays in making rent payments and in fulfilling planning conditions.

Other causes of concern related to the appearance of the site – which is located in a Conservation Area – and the effect on nearby residential properties.

Yesterday Cllr Ayre caved into pressure and ditched the conditions which had been aimed at securing the councils financial interests.

He was warned by lawyers that, under current government COVID regulations, the Council might be unable to take back possession of the site even if rent arrears built up.

Currently the site is occupied on a “tenancy at will” basis.

The decision has drawn criticism from other traders and professionals one of whom has called for an inquiry into the whole affair (left).

No rent paid for 5 years on Container Village

According to a local community blog published in Brixton, London, the local version of the “container village” hasn’t paid any rent to the Lambeth Council for 5 years.

“Pop Brixton” was used as a paradigm when the York Spark owners were trying to persuade the York Council and its planning committee that siting shipping containers in a conservation area was a good idea.

Like Brixton, the operators offered to rent the Piccadilly site from the Council and to share in the ventures profits.

An FOI response to the “Brixton Buzz“ has revealed that a similar deal there produced no income for the local authority.

Now, like in York, monthly rental payments are being sought by Lambeth Council.

A Freedom of Information request was submitted to the York Council on 25th August asking the authority to confirm that the terms of a new lease – agreed in February – have been fulfilled by the site occupiers.

Spark operated on a “tenancy at will” basis earlier in the summer following its closure during the health crisis. Its original lease expired on 1st July 2020

Sparks set to fly over Spark decision

There has been an angry response to the planning committees decision to extend the planning permission for the Spark container village on Piccadilly. They agreed to a 2 year extension although the government was only suggesting a 12 month, post COVID-19, relaxation.

A prominent local architect Matthew Laverack has now written to the media to criticise the decision (right).

It has been claimed that some members did not declare an interest in the application despite close contacts with the applicants. Several are believed to be customers of the establishment. Some had made representations in favour of an extension of the lease on the site while others were executive members covered by the code of collective responsibility.

This has prompted allegations of cronyism and a complaint has been lodged under the Councillors “code of conduct.” It is likely that the investigation into any such complaints would take months to resolve. Spark will be able to continue to trade in the interim, provided that they adhere to the terms of the planning consent and fulfil the requirements of the proposed lease extension.

Spark have yet to make any net rent or profit share payments. When last published, some business rates payments were also outstanding. The businesses modest contribution had not even covered the costs to the taxpayer of providing services to the site.

In 2016 Spark had forecast a surplus of £213,000 on operations over a 3 year period.

Cllr Nigel Ayre agreed at a meeting which took place on 14^th February to renew the Spark lease for 2 years. However, in the light of the large number of complaints from residents and the failure of Spark to make payments to the Council, several conditions were imposed (see left) .

The current lease has ended so the business is operating on a “tenancy at will”.

Taxpayers will be looking very closely over the next few weeks to see whether all the lease conditions have been fulfilled.

If not then the site will need to be cleared.

Even if only used for car parking, it would at least bring in an income for the Council. It could provide, in what are difficult times, accessible spaces which could benefit other City centre small traders not least those operating in the Shambles market. .

Sadly the impending recession means that the opportunity to permanently redevelop the Piccadilly site for the benefit of the City may have passed the Council by for now at least.

Trebles all round

Eleven hundred years ago had Eric Bloodaxe sailed up the Ouse and been greeted by the Anglo-Saxon Witan offering rent free accommodation, 24/7 feasting/pillaging and no restrictions on behaviour, he would have been pleasantly surprised.

In his case he might have chosen to take those options anyway, whatever the views of the local population.

Today residents wake up to find that they may have to endure another sea born invasion, as the SPARK container “village” will carry on for another 2 years, courtesy of a compliant York Councillor who yesterday authorised an extension to the lease of land in Piccadilly.

The business will have to gain an extension to its planning permission (and operating license) but this looks like another behind closed doors “done deal”.

So far, the business has failed to implement the planning conditions imposed some 2 years ago which were intended to reduce the visual impact of the sea containers.

Quite simply the development is an ugly carbuncle blotting a neighbourhood which is long overdue for regeneration.

The containers were also sited too close to existing residential accommodation. Metal boxes are inherently noisy and, of course, lack the insulation credentials that a City, which recently declared a “climate emergency”, might expect.

Containers arrived in Sept 2017

We don’t know which officials, members and reporters have so far enjoyed the hospitality of Spark.

Whatever that number may be, its “trebles all round” for a business that boasts a £3 million turnover but can find no profit to share with local taxpayers who will be expected to continue to subsidise the operation.

Spark – Questions that need to be answered

In November 2016 we first heard of a plan to site shipping containers on Piccadilly and use them as vending units.

It was the start of “Containergate” with an outfit called Spark York persuading naive Councillors to give them the use of a prime site at 17/21 Piccadilly for a minimal rent.

As well as £13,333 a year in rent the Council was promised a 30% share of the profits which were forecast to total £213,085 over 3 years.

Business plan considered by York Council Executive Nov 2016

On that assurance, the Council spent £40,000 on installing new utility services to the site

The developers made a series of claims about what their (visually hideous) development would bring to the City. The small business growth figures strained everyone’s credulity but Councillors bought the line.

It subsequently transpired that the firm were unable to raise the £220,000 set up costs and had to resort to the commercial loans market. Although they had beneficial use of the site from September 2017, it was to be the following summer before Spark opened for business.

Further controversy followed the granting of planning permission. Quite simply the owners chose to ignore a series of conditions – including the need for a disabled access – and even now have failed to cover with cladding the garish street art which dominates the Piccadilly frontage.

The original business model failed, and the scheme concentrated on alcohol sales as its main form of income. It enjoyed a good summer in 2018 but the high noise levels proved to be a major irritant for the occupiers of nearby flats.

Thankfully the nightmare lease was due to come to an end in June. We would be rid of the containers and a start could be made on building something that would be a credit to the city.

But now York Councillor Nigel Ayre is apparently considering extending the Spark lease (The original decision was taken by the Councils Executive). He is being promised footfall and “economic vibrance” on Piccadilly, although the rest of the street is likely to be a building site for much of the next two years.

Spark are good at some things. PR is one. They held a party when they opened which was attended by the media and several Councillors and officials. It appears to have been an insurance policy judging by the report being considered next week.

The report fails to examine the performance of the company against the claims that they made in 2016.

Where is the list of small businesses Spark claim to have “incubated” at the premises?
The operators claim to have had a turnover of £3 million across the whole site yet the Council has had a zero share of any “profit”. (The original plan was for an annual turnover of £272,000 a year yielding a profit of £64,620). Where is the updated business plan?
Who at the Council agreed that the repayment of loans should take precedence over the Council being recompensed for its investment?
Where can a full set of accounts be viewed? (there is little information at Company House)
Why are no other options considered? Parking revenue alone could be worth around £100,000 a year even if a start on the permanent redevelopment of the site is delayed for 2 years
Is the Council still the preferred creditor if the business goes bust? It was told in 2016 that it could sell the containers to fund any outstanding infrastructure costs.
Why is no independent up to date valuation of the site assets provided?
How much have the Directors received in remuneration from Spark (and any subsidiaries) since September 2017
How much has been paid in Business Rates and how much is outstanding?
Who at the Council has received hospitality from Spark? Has it all been properly registered?
Where can financial details of the container occupants’ businesses be found?
Are any of the Spark Directors potential beneficiaries of any of these businesses?

Until these, and other, questions are answered it would be irresponsible for the Council to consider any extension of the lease.

In the meantime, the planning department should take enforcement action on outstanding breaches of the planning permission.

Other businesses in York deserve to be competing on a level playing field. They, and taxpayers, seem to be the losers in the current arrangement.

Developers try to overturn Moor Lane planning ruling

……..as Spark finally submit proposals for cladding their shipping container village

City of York Council has received notification from the Planning Inspectorate that the applicant for the Moor Lane planning application (18/02687/OUTM) has appealed the Council’s decision to refuse the outline permission for up to 516 residential units.

The Planning Inspectorate has notified the Council that the Inquiry will start on 12th November 2019 and it is anticipated that the Inquiry will sit for 12 days.

The Council will send notification of the appeal to any person who was notified or consulted about the application and any other interested persons who made representations.

If however the representation was part of a petition, each individual on the petition will not be notified by the Council.

Spark

Separately the Spark container village people have finally submitted details of their plans to provide cladding on the development frontage.

They say, “We propose to attach to this frame a secondary timber structural frame which will be over clad with treated softwood or Siberian Larch battens of 50mm width running vertically with a 50mm gap forming a continuous wrap and palisade along the external boundary. The timber cladding will be overplanted with Clematis growing from planters situated at first floor level”.

The development reaches the end of its 3 year lease next June. We doubt very much whether even fast growing clematis will make much difference to its appearance during the intervening months.

NB. The Council has so far failed to say how much “profit share” they enjoyed from the Spark lease last year.

Spark still to submit planning appeal on cladding

Freedom of Information response confirms no rent or rates paid

Spark was closed yesterday

Despite receiving a decision notice which required the company to implement the original planning condition which included providing cladding on the outside of the containers on Piccadilly, Spark still haven’t started work.

The decision notice was issued on 21^st August, over 2 months ago.

Spark were publicly quoted as saying that they would “appeal” to the Secretary of State against the Councils decision. They haven’t done so yet and indeed it could be another 4 months before they have to register an appeal. Even then Planning Inspectors could take several months to determine the case. That might be close to the May 2020 end of their lease for the site.

The Council says, “It is the view of planning officers that it would be inappropriate and unreasonable for the planning authority to attempt to take planning enforcement action whilst they exercise their right to challenge the Council’s decision”.

Their position ignores the fact that the developers have been in breach of the planning conditions for over 6 months now and that they have failed to record an appeal against the August planning refusal.

With containers having been in place since September 2017, that would mean that the ugly frontage would potentially have been on public view for over 2 years.

A Freedom of Information response (ref: IGF/10492) has confirmed that Spark have not yet paid any rent or rates on their development. The rates issue is blamed on delays in the Valuation Office who have yet to respond to a valuation request issued to them in May 2018.

Developers call “foul”

It appears that the Council issued a contract to Spark which didn’t require any rent payments to be made until March 2019. It is unclear whether the council collects rent 12 months in arrears on the other properties that it rents in the City (Council house tenants pay rent fortnightly).

The FOI does confirm that building control agreement hasn’t been issued

“The original building regulation application was approved at the site, however this has subsequently been amended to incorporate roof cover which is currently being assessed. As soon as this is complete a Completion Certificate will be issued for the site”.

Perhaps not surprisingly other developers in the City are now crying “foul” and are claiming that there is no longer a level playing field.

Containergate rumbles on – planning appeal lodged

Spark, the operator of the shipping container “village” on Piccadilly, are to appeal against the Councils decision to require them to clad the front of the containers. Spark offered the cladding when they originally sought planning permission but later changed their minds and painted “street art” on some of the containers on the Piccadilly frontage.

In May they sought retrospective planning permission for the change, but this was turned down by the Planning Committee in August. They have now appealed against that decision with the Planning Inspectorate likely to take several months to take a view. It is understood that the Council has decided not to take enforcement action in the interim

The Piccadilly site is owned by the Council, which has spent around £60,000 installing services and subsiding improvements.

The company had originally claimed they could not afford the cladding, but they have now written to prominent Councillors saying that their tenants have taken “£1.2 million” since opening, “more than twice the original forecast”.

That may be good news for taxpayers, as the Council is set to get a share of the “profits” …..but there will be no share out before April 2019 at the earliest.

It has emerged that Sparks have not yet paid any rent. They have had beneficial occupation of the site since the beginning of September 2017.

The Council have been asked to confirm that Business Rate payments are up to date.

Spark have applied for planning permission to fit a “roof” on the site.

At the same time, they have announced that they will open for only 5 days a week (closing on Tuesday and Wednesday from later this month).

There are conflicting reports about the number of small businesses which are being sustained on the site. Some have not been able to make a go of the site, with one blaming the drink culture for scaring away family customers. 3 complaints about external noise levels have been received by the Council.

Spark however claims that, of the 21 letting units, all but two are taken: 9 food, 4 drink and 6 retail outlets.

Depends whether you believe the spin, but clearly the alcohol-based units businesses got a summer boost from the World Cup and hot weather.

The lift, which will allow the village to meet disabled accessibility standards, will be operational this week according to Spark. They have, however, been unable to secure insurance which would indemnify the Council in the event of a business failure.

Council officials are content to rely on the resale value of the containers to secure taxpayers’ interests. Many of the containers have been refashioned to meet the specific needs of the Piccadilly site.

The approach taken by York Councillors, to the claims made before agreeing to lease the land to Spark, can still be viewed “on line”. The meeting which took place in November 2016 can be seen by clicking here Agenda Item 73

Sparks container village – deadline for disabled access lift passes

Street “art” still dominates Piccadilly

Anyone expecting to see the disabled lift installed at the Sparks site on Piccadilly may be disappointed. Users say that it is still missing despite public promises made to the planning committee in August that it would be available for use by the end of September.

The same meeting was told that the project was highly successful. Others have,however, claimed that many of the original tenants have now quit the site, with only alcohol sales thriving.

Anyone expecting to see the street art graffiti removed from the Piccadilly frontage will also be disappointed. There is no sign of the cladding which should have been provided before the site opened in April.

Sparks have enjoyed beneficial occupation of the site since September 2017

Responses by Council officials to a series of Freedom of Information requests by local architect Matthew Laverack may give rise to even more concern.

The requests probe the role of the York Council as the landlord for the site. They agreed that the shipping containers could be put on the land despite pressure to advertise the site for permanent development. Many regarded the terms of the deal as generous with the Council pitching around £60,000 into the project.

Insurance requirements in the lease have apparently not been met and the Council’s building control section haven’t signed off the site as complete.

The mainstream media have been very quiet about these planning and lease breaches, while the Councils planning enforcement team has so far been wholly ineffective.

The contract allows for the Council to take back the site if, after 21 days, the tenants have failed to pay the rent or complied with their obligations under the Lease.

The Council will likely face an Ombudsman referral unless it gets its act together

NB Empty properties nearby are being offered free of charge on a short-term lease to voluntary organisations. There have been no takers.