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.
Letter from local businessman
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).
Contrary to the claims made in a Council report published yesterday, it appears that the owners of the SPARK Container village on Piccadilly HAVE NOT signed a new lease.
The revelation comes in a response to a Freedom of Information published today.
SPARK were controversially offered a new lease at a meeting which took place on 14th February. They had been due to vacate the site in June.
Following complaints from neighbours and against a background of non compliance with planning conditions, the Council sought to place new restrictions on how SPARK could operate the business. (see below).
It has now emerged that SPARK has settled outstanding 2020 Council debts to the value of £23,333
The development was granted a 2 year extension to its planning permission earlier in the summer.
Spark has been operating on a “tenancy at will” basis since June.
The Council says, “The Council are in discussions with Spark over the provision of the new lease following the grant of a Tenancy at Will earlier in the year, which is still in force”.
The long term future of the 17/21 Piccadilly remains unclear as the health crisis and economic recession makes early redevelopment unlikely.
It has been suggested that the site could be used as a terminus for a disabled friendly zero emission transport system which would ferry less ambulant visitors around the City centre.
This use – which might also offer residential or workshop opportunities at first floor level – could help to ease pressure on the nearby Castle car park.
A report on the Castle Gateway regeneration project published today says that the scheme should go ahead but it says, “there are no plans to close Castle Car Park until suitable replacement parking is available”.
Castle car park has been very busy in rent months
However, the construction of a multi-story alternative on the St George site will be shelved.
The Council’s Executive are being recommended to agree to the “recommencement of the paused procurement of a construction contractor to undertake the design and subsequent construction of the proposed apartments, pedestrian/cycle bridge and riverside park at Castle Mills”
They’re also being asked to approve the design and submission of planning applications for a “high quality public realm scheme on Castle Car Park and Eye of York” while a decision on the future of the site at 17-21 Piccadilly – currently the home of the Spark container village – will be delayed until next summer.
“Spark York who have resolved their outstanding planning issues and have a lease until early 2022″.
York Council report 24th Sept 2020
The immediate additional financial commitment for the Council will be £1.5 million. In total the project cost – which was to be funded by borrowing – was £46 million. This would generate additional interest payments of around £1 million per year which would have to come out of what is now an overcommitted revenue budget.
In effect, there will be further cuts in public service standards across the City.
It was hoped that the borrowing would be paid off through the sale of flats which would be built on the former Castle Mills car park site. However, there was still a funding deficit of £4.7 million and no resources were allocated for turning the Castle car park into “a world class open space”.
The Castle car park provides over £1 million a year in income for the Council.
The Council has already spent £2.2 million on consultation and design activities for the project.
In a separate report the Council has been warned about the risks to local public services
The report fails to put the scheme costs into the context of the overall Council capital and revenue budget position.
An oddly detached from reality section of the report claims that the “Castle Gateway masterplan is a “significant opportunity to drive the city’s response to Covid-19 due to the:
Focus on sustainable transport to create new key pedestrian and cycle routes
Reduction of vehicle journeys inside the inner ring road through the closure of Castle car park
Creation of significant new public realm
Enhanced cultural and heritage offer and the creation of a new major event space – building on the city’s unique selling points and expanding the capacity to attract responsible tourism to support the city’s economy
Regeneration and investment in rundown parts of the city Development of new city centre homes, including new affordable and council housing
Capacity to reinvigorate the economy by supporting jobs in the construction sector”
So we have the Benito Mussolini solution to unemployment emerging. Borrowing to fund massive public works contracts which – in the case of the bridge and park – will have no short-term economic benefits (other than perhaps for a handful of the green socialist, city centre dwelling, elite).
Businesses dependent on those who choose to use, because of the health crisis, personal transport when they visit the City, will lose out.
Spark queue & Peel Street car park full
We need to be careful with our commentary.
“El Duce” gained a reputation for having errant stationmasters shot if trains didn’t run on time.
The lowest risk part of the scheme maybe the construction of the blocks of flats. Maybe that could continue, even though rising unemployment, and reducing business rate income, could compromise the Council’s ability to service the planned borrowing.
On balance, the Council really should decide to pause the project for 18 months and review it when the health crisis is over.
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 requestwas 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
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 14th 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.
The controversial Spark container development in Piccadilly has applied for a two year extension of their planning permission.
The move was expected following the decision of the York Council recently to grant an extension of the site lease. However, the organisation must fulfil several other lease conditions before any extension is implemented.
Quite how the current Coronavirus restrictions will affect this and other business development plans remains to be seen.
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.
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.
Party time at Spark in 2018
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.
The Council has confirmed that the promised “profit share” on the Spark container village development on Piccadilly has still not materialised.
Spark York
Payments should have been made at the end of the last financial
year.
Only one single “rent” payment of £13,333.33 has been received
by the Council.
In their original pitch to the Council in 2016, the operators promised a share of the profits on the project which were expected to more than cover the £40,000 costs of the Council providing mains services to the site.
No explanation for the failure to make a payment has been published nor is there any item on the Council forward decision-making programme which would suggest when an explanation may be forthcoming.
It is estimated that, had the site simply been used for car parking, the Council would have received around £200,000 in income over the last 3 years.
The containers are due to be removed in June 2020 although the
Council has been very slow to market the availability of the site for permanent
redevelopment.
There have been ongoing problems on the site with several planning conditions not being observed.
Over £4000 in Business Rate payments are also owed to the Council.
Business rates at Spark FOI Reef IGF/13909
NB. Under EU regulations, which are still expected to apply after 31st January 2020, government bodies are specifically prohibited from subsidising private companies.
Latest figures published by the York Council suggest that anyone who has a planning application rejected by the local authority has a 30% chance of having the decision reversed on appeal. Appeals are considered by independent inspectors.
The figures reveal that inspectors rejected two appeals against decisions that the planing committee had made and which were in conflict with the recommendations of local planning officers.
One of the these concerned the controversial Spark Container Village who tried to avoid providing cladding on the public frontage of the shipping containers.
Some 18 months after the containers were occupied, the cladding has still not been provided. With the Council still not having advertised the Piccadilly site for sale, there is growing concern that the situation will drift on.
The planning permission for the containers does expire in June 2020 so the matter must come to a head within the next few months.
