Another restaurant deal flops leaving York taxpayers £1.375 million out of pocket

Community Stadium commercial block

The York Council is set to admit that a deal to underwrite the construction of 3 restaurant units at the York Community Stadium, branded in 2017 as “highly risky”, has flopped.

A meeting next week will be told that the Authority must either lease the empty units itself or face an increase of £1.375 million in its contribution to the Community Stadium budget

The news comes one week after the authority was forced to admit that another restaurant, which it constructed as part of the Guildhall renovation project, will also remain empty. That restaurant was supposed to provide £150,000 a year in rental income which would have been used to offset the costs of the Council’s new Guildhall “business centre”.

2017 budget

The Council agreed in October 2017 to accept liability if the developers were unable to lease the Community Stadium restaurant units.

Now with “practical completion” only apparently a few weeks away, and the units still not leased,  the Council must decide whether to reduce the sale price for the commercial block or to lease the units itself for 25 years.

Another option, offered by land investment company L&G, would be for the Council to, effectively, buy out their interest in the units.

A Council report says, “Accepting a lease of these 3 units would also enable the Council to facilitate subletting’s for the units to a wider market as the Council could review offers from local and smaller businesses that would not be considered under L&G’s corporate benchmark although subletting’s are subject to L&G’s approval”.

Maybe so.

But the hospitality industry has changed beyond recognition recently. Even before COVID struck, two of the adjacent existing restaurant units (not owned by the Council) had become empty.

Existing Monks Cross restaurants are struggling

It is likely to be some years before Monks Cross becomes a destination location with a high footfall.

The Council could also find itself competing against itself to let restaurant units at both Monks Cross and the Guildhall

The Council has not published a business plan which would guide its next set of decisions.

There should be no more ill considered adventures using taxpayers money.

The City already faces cuts to basic public service standards as a result of COVID. Taxpayers should not be expected to subsidise empty floorspace.

Lessons must be learned for the future.

What & when at Monks Cross?

It isn’t just the Community Stadium (see story below) that is lying unused at Monks Cross.

The £12 million gym, swimming pool and outdoor all-weather sports pitches are also still under wraps.

Coming to Monks Cross – but when?

Around £14 million of taxpayers money has been used to subsidise the complex on top of which were “developer” contributions of over £15 million  (click).

The expectation was that the site would provide several hundred additional jobs for York – opportunities which look to be even more important as the post COVID-19 recession hits employment levels in the City.

Other sports and swimming facilities in the City reopened on 10th August (click).

IMAX cinema has reopended

The IMAX cinema recently reopened and two adjacent units have been taken up by a bowling alley/café (Hollywood Bowl) and an indoor putting green (Putstars). Opening dates haven’t been confirmed.

Both had been scheduled to open in April. Together they will create about 60 jobs.

Bowling alley and indoor putting ready to open?

Elsewhere the Council hasn’t issued any update on the progress made in letting the floor-space in the building that they have underwritten.

Frankie and Benny’s closed

Three of the 4 nearby café units are now vacant following the demise of Frankie and Benny’s.  

Costa Coffee remains open.

Costa Coffee is popular

The has similarly been no word on the plans for a library and the NHS outpatient unit.

Cycle racks at the Park and Ride site are not overused

Empty Monks Cross restaurants could cost taxpayers £1.4 million

The Community Stadium saga has taken a new turn, with the Council admitting that it may not get the full £3.8 million which the developer has promised to pay for land allocated for three restaurants.

The units are unlet and if they remain so on the opening date, then the Council could receive £1.4 million less for its interest.

June 2019 Council report

The Council says that discussions are ongoing with several potential tenants.

A report the Councils Executive confirms that building work on the stadium should be completed in September. The buildings would then be handed over to the operators who will be responsible for obtaining a safety certificate. The Council claims that it still opens the stadium will be operational in October but that seems optimistic to many observers.

In the meantime, the Knights Rugby team continue to play their matches at Bootham Crescent. The Council plans to increase their subsidy to the club from £30,000 to £45,000 to compensate for the delays in moving to Monks Cross.

The stadium project cost £22.6 million during the 2018/19 financial year