Guildhall redevelopment deal collapses

Interserve (ICL) taken off contract as costs escalate

York Guildhall

The York Council’s, accident prone, plan to redevelop the Guildhall as a business centre has collapsed.

They have been unable to agree a final cost target with preferred contractor ICL.

ICL were awarded the contract last year, with the overall expenditure on the controversial plan then put at over £12 million.

The Council were criticised for putting so much taxpayers money at risk on what was a speculative venture.

A report published today says that

“In accordance with the contract ICL advised their tender submission would be delayed and made an initial stage 2 tender submission on 16 February 2018. Unfortunately this was significantly in excess of the current project budget and contained a number of outstanding cost items which did not provide sufficient proof that the submission evidenced value for money”

Guildhall project layout plans

The Guildhall has been largely unused since the Council moved its operation to West Offices in 2013. Initially it had been expected that a private sector partnership would lead the redevelopment of the site which is in a Conservation area and which includes two important Listed buildings (Guildhall and Council Chamber).

It is unclear what will now happen although there are growing concerns that the empty buildings will continue to deteriorate with taxpayers facing an increasing annual maintenance burden.

The Council has already spent over £1 million on the aborted project.

Contract for building works at Guildhall to cost £10.8 million

The Council has confirmed that the contract for building works at the Guildhall complex will cost £10.8 million.This varies from the amount indicated in November but is in line with the budget agreed last spring.

The contract was been awarded to Interserve

The work is expected to be completed by November 2019

The Council’s approach to redevelopment of the Guildhall area has been the subject of controversy since it became clear that no private sector firm was prepared to share the risk on the contract. The approved total capital cost for the project is £12.8 million.

To this should be added any shortfall on running costs

Ironically, 4 years ago, the then Leader of the Council, quoted the Guildhall contract when explaining how attendance at the Cannes estate agents jamboree “Le Marché International des Professionnels de l’immobilier (MIPIM)” would generate investment in the Guildhall project.

The next MIPIM event takes place in March in a modest little venue in Cannes (see below). The West Yorkshire Combined Authority (formerly Leeds City Region) – part of the budget for which income from York taxpayers – will be represented there, as they have for each of the last 5 years.

Local companies encouraged to bid for Guildhall refurbishment work

Local companies can get into pole position for contracts on the £9m Guildhall redevelopment at a special event tomorrow Tuesday. (28 November).

City of York Council has appointed main contractor Interserve, who will be working in partnership with York-based M&E contractor SES Engineering Services, to transform the complex into a world-class civic and business venue.

Part of Interserve’s winning bid involved a commitment to using local suppliers. Now they want to meet the local construction companies who can help to deliver the high quality and best value redevelopment of the listed building.

There are opportunities for any construction-based companies and suppliers such as roofing, scaffolding, dryliners, demolition, groundworks, joinery, plastering, steelwork, masonry, heritage specialists, decorators, glazers, floorers, fire safety, lighting, mechanical, electrical wholesalers and more.

You can meet the team and find out more about available contracts and work on the scheme at the ‘Meet the Buyer’ event, which runs from 5:30 to 7:30 pm at West Offices.

Businesses can register their interest here (click): https://www.eventbrite.co.uk/e/york-guildhall-meet-the-buyer-tickets-39832969484

Contractor appointed for £9m Guildhall transformation

City of York Council has appointed Interserve to carry out the £9m transformation of the iconic Guildhall into a world-class civic and business venue.

Under the current plan Council officials will attempt to directly manage the taxpayer funded facility with £12.4 million at risk. Much of the work is being funded by borrowing. At best, the business plan would see a minimal forecast surplus of £1000 a year on the investment. This would be after covering interest charges on the planned £8.7 million of extra borrowing needed to fund the project.

Earlier in the year the Council announced that it had failed to find either public or private sector partners willing to share the financial risks on the project.

Today the Council says, “Interserve demonstrated that it has the expertise to deliver a high quality and best value remodelling of the listed building complex during a highly competitive tendering process. The construction company has worked on other significant listed buildings including Kirkgate Market in Leeds, Durham Castle and the former Co-op store in Newcastle”.

The council’s Executive approved plans to redevelop the Guildhall complex in March 2017. The redevelopment will “make the most” of the listed buildings, allowing riverside access to the complex which will host public and civic events, a restaurant and state-of-the-art business centre.

Interserve’s bid showed strong proposals for creating the river access, and that the company understood how to overcome the significant challenges of carrying out construction on the site.

The appointment means that work should begin in January 2018, after contracts are signed and exploratory works are completed.

City of York Council’s Full Council meetings will be hosted at The Citadel, the former home of York’s Salvation Army now owned by York City Church, during the construction period.

York council meetings seek Salvation Army help

Meetings of the city’s councillors will be held in the Citadel while the Guildhall receives a £12 million refit.

For the next two years the Council will meet at the former premises of the Salvation Army on Gillygate.

The Council says,”The Guildhall officially closes on 30 September to prepare for the construction works.

The Citadel, the former home of York’s Salvation Army now owned by York City Church, is a fully accessible city-centre venue and will continue to be open to the public for full council meetings.

The next full council meeting takes place on 26 October”.

Hopes are high in the City that the Salvation Army influence will improve quality of decision making by the Council.

Guildhall plan – York Council goes it alone.

York Guildhall

The York Council has failed to find a commercial partner to sustain the planned small business club which will occupy a refurbished Guildhall.

It means that Council officials will attempt to directly manage the taxpayer funded facility with £12.4 million at risk.

At best, the business plan being considered by the Council’s Executive next week would see a minimal forecast surplus of £1000 a year on the investment. This would be after covering interest charges on the planned £8.7 million of extra borrowing needed to fund the project.

However, this does not include the need to fund a direct grant of £1.759 million from the Council’s capital programme (part of which is also funded through borrowing) or the need to repay loans to the Councils internal “Venture Fund” which is set to bear revenue losses on the project of over £568,000 during the next 5 years.

Taxpayers will also indirectly fund a £2.5 million contribution from the Leeds City Region “Local Enterprise Partnership” which may also have to be repaid from any surplus.

As recently as July, the Council was saying that it could only recoup around £500,000 from the rent of office space. Now it says that £785,000 a year is possible, at “88%” occupancy levels, plus £25,000 for the rent of café/bar space.

The project is also dependent on leasing a large section of the building for use as a restaurant. This element is expected bring in £180.000 a year in rent income.

The viability of a (separate) bar/café is dependent on securing a licence on what is a site – under the Councils own rules – located within a “cumulative impact zone” where alcohol abuse has become a significant problem for the City.

The project has had a very chequered history.

The Guildhall was effectively abandoned in 2013 by the then Labour controlled Council when they upped desks and moved to West Offices. They opted in 2013 for a £1.4 million conversion into a “Digital and Media Centre” (DMC).

The listed buildings were left empty and their condition rapidly declined to the point where a £2.5 million backlog in maintenance work developed.

The Council went through a time consuming and expensive design competition, but it was late 2014 before they confirmed their intention to use the buildings for a DMC.

By then costs had escalated to £9.2 million.

2016 options

An incoming coalition Council in May 2015 seemed to be transfixed by the problem, but after 12 months they scrapped the media centre plan instead opting for a seemly safer business centre scheme.

They rejected a less risky, and financially more prudent, option which would have seen some residential units provided on the site.

A Heritage Lottery bid was turned down leaving the Council to seek commercial partners.

These have also now failed to materialise.

At no time has the sale of the site been tested on the open market.

The Council has an indifferent track record when trying to directly manage specialist facilities. The Barbican concert hall and pool – which cost taxpayers nearly £1 million a year in subsidies, in addition to a capital construction cost of £12 million – remains fresh in many memories.

The Barbican eventually had to be leased to a professional leisure operator.

The refurbishment of the Mansion House, which is adjacent to the Guildhall, is also running 12 months behind schedule.

& then there is the Community Stadium saga!

So we doubt whether we have heard the last of the Guildhall project.

Guildhall project set to get planning approval

Perhaps not surprisingly, the York Planning Committee is being recommended to approve major changes to the Guildhall complex in York.

The proposals involve alterations to, and the refurbishment of, the Guildhall complex to create conference rooms, meeting rooms and offices.

Guildhall project plans

The existing south range will be refurbished, and part rebuilt, to provide cafe and ancillary accommodation while an extension will be erected on the north side of complex to form a restaurant and office accommodation.

30 objections to the plans – including one from the York Conservation Trust – have been received. Only one letter of support has been lodged.

The proposal is controversial because of the risks to the public purse. The latest estimates suggest that Council taxpayers could be liable for around £12 million if the project flops. It is an investment – and risk – which could have been transferred to the private sector if a more flexible tendering system had been adopted.

York Guildhall

Many of the proposed changes will be welcomed as they open up the river bank and will bring back into use an important historic building which has been largely empty for four years.

One issue to be resolved is the inclusion of units where alcohol will be served.

This – like several other recent proposals for the city centre – is directly in conflict with the cumulative impact policies of the Council and local Police. The policy seeks to limit the number of outlets in the City centre selling alcohol.

guildhall-costsb-july-2016

Taxpayers invited to view how their £12 million will be spent on York Guildhall complex

Residents are being invited to view the latest designs and plans outlining the potential for the Guildhall complex to become a “state of the art venue for business” at an event on Wednesday 3 August.

The Guildhall will open its doors between 11am and 2pm on Wednesday and will welcome views from residents on the latest designs. At the event

77% increase in Guildhall hire cost

residents will also be able to meet the Project Manager who will be on hand to provide more information about the scheme and answer any questions.

The event follows proposals for the riverside complex being approved by Executive last month. The plans look to transform the Guildhall complex and ensure the future viability of one of York’s most significant buildings through the creation of a vibrant business and civic venue, with supporting commercial development on the riverside, maximising its economic use, heritage appeal and public access.

Tory Councillor Chris Steward who has presided over the escalating costs of a project that he inherited from Labour, said:

“The Guildhall complex is one of York’s most iconic buildings and these plans look to transform it from an underused asset to a unique venue for business which will bring significant economic benefit to the city of over £66m in Gross Value Added.

“We welcome the views of residents on this scheme and hope they take the chance to see the proposals, meet the team and comment on detailed proposals outlining the future of York’s historic Guildhall.”

A detailed business case will be taken to Executive and Full Council in February 2017 and if approved the work is expected to start mid 2017 with a completion by autumn 2018. Plans will continue to see the council retaining the use of the council chamber for Full Council meetings and the Guildhall for key civic and public events.

Guildhall project cost shoots up by 21% to £11.9 million

Council will borrow over £10,000,000

York Guildhall

The York Council has now admitted that the project to create a business club and restaurant at the Guildhall will cost £780,000 a year in interest charges.

It says it can only recoup £500,000 a year from rentals, leaving taxpayers to pick up an annual bill for £430,000.

Part of the huge escalation in costs results from the deterioration in the condition of the historic building since it was abandoned by the then Labour led authority nearly four years ago.

They had no idea what to do with the empty building so embarked on an expensive and time consuming international design competition in 2012.

The new coalition run Council had the option to take decisive action over a year ago but dithered. They had been strident, while in opposition, in criticising Labour’s £9.2 million plans for the building .

Originally, it had been intended to put the modern part of the complex on the open market with the intention of using the income to sustain the Listed building. The Council would have continued to use the historic part of the building.

The only justification for the project now seems to be a speculated increase in GVA (Gross Value Add) to the local economy of £66m. However, this would have occurred anyway with a private sector driven alternative.

The Council has already spent £750,000 on the project.

Potential support from regional organisations and the Heritage Lottery Fund has not materialised.

The Council now doesn’t expect the building to open before late 2018.

So why would seemingly intelligent representatives do a U turn on such risky venture?

Well it takes courage – and experience – to challenge Council officials and consultants. They have a vested interest in projects appearing to be a “success”. They will provide elected members with information which suits their version of events. They will not volunteer other choices (like testing the market with other use options).

A similar situation has occurred with the Stadium project.

We doubt if the Council’s Executive will step back from the brink at this stage

If they do so, they will be accused of wasting £750k of taxpayer’s money.

If they don’t, then costs will continue to escalate and taxpayers – and other public service standards – will suffer.

Shock as Guildhall repair bill tops £2.5 million

As we forecast over three years ago the empty Guildhall is decaying and needs prompt repairs and an early start on renovation works.

York Guildhall

The then Labour controlled Council had abandoned the buildings when they moved to West Offices. Incredibly no thought had been given to the future of the Grade 1 Listed building. The original intention – discussed in 2009 – had been for the Council to continue to occupy the historic part of the building (Guildhall, Council Chamber and some offices) while deriving an income from selling or leasing the modern annexes – which might have been redeveloped as residential accommodation.

This income would have paid for the upkeep of the historic buildings.

After much prevarication, the Council opted in 2013 for a £9 million scheme to provide a “digital media centre” at the complex.

The newly elected administration in 2015 had the opportunity 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” complex. …..And this at a time when workshops were vacant at suburban locations while all over the City commercial and office space was being converted into residential units (because of lack of demand)

Now a report to a Council meeting says that more money will be needed.

Part of the problem is that the empty buildings have deteriorated. The report says,

the existing condition of the Guildhall complex is poor. Historic England have advised that the complex could soon be considered at risk were no future use to be identified. The 2013 condition survey identified £2m (exclusive of fees) of necessary works to bring the complex up to a satisfactory standard – of which £1m were priority urgent works. With fees and inflation factors this equates to approx. £2.5m of works necessary to sustain the complex

In addition, the report says,

additional repair and remedial works are likely to be necessary to bring the complex back into use specifically relating to the structural movement in several locations across the complex, almost certainly linked to the ground conditions at this riverside location. …. On-going structural monitoring will also be used to gather further evidence of the movement occurring at various locations across the building complex (south range / Guildhall south wall / Victorian offices / north annex tower).

The latest design involves the provision of a larger restaurant. How many more restaurants the City Centre can accommodate may be an interesting question.

No provision is made for residential use despite continuing evidence of burgeoning demand.

The Council’s Executive will have to decide in July whether this expensive and out of control plan goes the way of the Community Stadium with more and more taxpayer’s money being thrown at a poorly specified and “ever changing” project

What seems increasingly clear is that York’s taxpayers cannot afford such a risky project which still looks to be three years away from completion.

Time for an urgent re-think.

Revised Guildhall project layout plans