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”.
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”.
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.
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.