Agenda item

Report attached.

Members considered a report of Councillor Clare Pritchard, Portfolio Holder for Transformation and Town Centres, updating Cabinet on the outcome of the negotiations with the preferred operator to agree a fit-out specification and lease for Accrington Market Hall.  The report sought approval to waive the Council’s Contract Procedure Rules to engage the retail space and rental consultants specialising in markets, Barker Proudlove.  In addition, the report made Cabinet aware of the need to create a suitable budget for an ‘in-house’ Market Hall management team and revenue operational budget as well as seeking approval to finalise operational days/hours, agreeing trader fees and charges, lease terms and conditions etc. and signing of relevant leases and any licences.

In the absence of Councillor Pritchard, the Leader of the Council gave a brief introduction to the report and explained the changes in circumstances leading to the approach now presented.  Councillors Whitehead and Brerton spoke in favour of the proposals which they believed would allow the flexibilities of a traditional market, support local traders by setting affordable rents and protect the building for the community as an inclusive public space.

Councillor Khan expressed disappointment at the proposals, which he considered lacked innovation and relied on old ways of working.  He raised the following queries:

• What were the reasons for the preferred operator parting ways and was this due to the Council’s actions?
• Whether specialist markets consultants were needed, given that an in-house model of operation was to be established?
• Whether the bid for Levelling Up funding had specified the use of an external operator?

Councillors Breton and Whitehead replied stating that the proposed approach would help to protect local businesses and provide a community benefit.  Councillor Dad indicated that there had been many Government constraints applied to the Levelling Up funding, although not around the selection of an operator.  This contrasted with the approach taken in relation to the Neighbourhoods funding of £20m, which was being delivered following engagement with the community.  The proposed consultants were the firm previously engaged by the Council on an earlier Phase of this project, so were familiar with its progress.  The reasons for the changes were to ensure that the Council obtained the right model for the future operation of the Market Hall.

Steve Riley, Executive Director (Environment) reported that he had recently attended a consultation event with the market traders, who had welcomed the proposals.  They were looking forward to working with the consultants to identify stall locations inside the building.  It was anticipated that this meeting would take place early in the New Year.

Approval of the report was not deemed a key decision.

Reasons for Decision

The Levelling Up Fund had been announced at the 2020 Government Spending Review, to focus on capital investment in local infrastructure projects that required up to £20m of funding and built on prior programmes such as the ‘Local Growth Fund’ and ‘Towns Fund’.

In January 2022, Cabinet had given its formal approval in support of the Town Centre Stakeholder Board’s recommendations that the Council’s LUF submission should focus around the following three principal interventions, noting that at the time 2 and 3 were not in the Council’s ownership.

1.    Redevelopment within the Indoor Market Hall and removal of the outdoor pavilions along Peel Street to provide traditional market stalls alongside an enhanced food and beverage offering and potential leisure offering – the intervention known as Market Hall.

2.    Acquisition and external façade improvements/roof repairs to the properties of 43-59 Blackburn Road / 2-4 Church Street – the intervention known as Market Chambers.

3.    Acquisition and redevelopment to the block 61-69 Blackburn Road to provide for a shared workspace offering – the intervention known as Burtons Chambers.

Cabinet had agreed that the Burtons Chambers and the Market Hall interventions would be managed by external operators through a Management Agreement and Lease respectively.

Operator Procurement

Consultant Barker Proudlove, who were retail space and rental consultants specialising in markets, had been engaged to identify a preferred operator for the Market Hall.  The process had commenced in October 2023 and by May 2024 a preferred operator had been identified.  There had been a lengthy period of negotiations to develop a fit-out specification for the food and beverage areas, potential leisure offering and legal agreement on the Market Hall lease’s terms and conditions.

The Council had not been able to agree a suitable fit-out specification or the terms and conditions for a lease with the preferred operator and as such the preferred operator had formally withdrawn.  The Council had acknowledged and accepted their withdrawal.  It must be stressed that both parties had parted amicably as market conditions had changed since the process started in 2023.  High inflation, increases in the minimum wage and NI, steep rises in utility costs, plus other external factors, had contributed to a reduced appetite for risk.  This had resulted in neither the preferred operator nor Council being willing or able to cover the cost of the operator’s fit-out specification and leisure offering and agree the final terms of the lease.

At the time of the Levelling Up funding submission in 2022, the decision of Cabinet had been to lease the Market Hall offering to an external operator.  Following a review of the previous submissions and available options, given the time remaining before the construction works were completed, it was proposed that the day-to-day operations of the Market Hall should be managed by the Council by an ‘in-house’ team.

Regular Cabinet updates had highlighted the appointment of lead consultant CBRE, specialising in commercial real estate services, to assist the Council in identifying a preferred operator for Burtons Chambers and who engaged Barker Proudlove to identify a preferred operator for the Market Hall.  CBRE’s appointment had been through the CCS RM6168 Framework under a call off.  This framework had now expired so the project team could not instruct any further works through it.

Waiving the Council’s Contract Procedure Rules would enable the Council to appoint Barker Proudlove directly.  Given their involvement in the Market Hall project in promoting the initial opportunity to operators and experience in this field, continuing with their engagement meant they could commence work at pace and reach out to food and beverage operators from their local contacts and commence discussion with existing and potential new traders.  The scope of their work was to:

• bring forward examples of property operational management structures at other similar offerings for the Council to consider.
• engage with the existing traders and liaise on leases, locations, layout wishes etc.
• promote the offering to identify food and beverage traders, including a lead bar operator (promoting the opportunity to local traders where possible).
• promote the offering to other potential traditional style and different traders to add/fill in any gaps to the market hall offering, (promoting the opportunity to local traders where possible).
• advise the Council on matters such as trader application forms, minimum trader requirements, scoring criteria and market regulations / rules.
• advise on potential leisure offerings and/or multi-use zones/stalls.

Had agreement been reached with the preferred operator, the trader fees and charges and granting of leases to traders would have been the operator’s responsibility.  Changing to a Council managed model, would now require the Council to set the level of fees and charges, decide the terms of the leases offered to traders and agree a process and criteria for selecting traditional market traders, food and beverage traders or other traders to be offered a lease.

Similar successful locations offering traditional market stalls, food and beverage and potential leisure offerings, operated on both Saturdays and Sundays, many of the Bank Holidays and extended opening hours into the evenings.  The Council would need to ensure sole traders and management staff were not pressured to work 7-days a week or break the Working Time Regulations 1998.  At other locations, this was mitigated in part by not opening at the start of the week.  The Council would therefore need to carefully consider the opening days and opening times and understand how it would manage traders who did not observe the agreed opening days/hours given the Council’s wish to provide a thriving vibrant market hall offering.

There were other ancillary operational costs which the Council would need to consider and how they were funded.  These included:

• Security/door staff where the opening days/times and/or licensing conditions necessitated their requirement, clearing and cleaning of the crockery across the communal seating areas and how utility costs for communal areas were allocated;
• Point of sale/payment systems and even if there should be a move towards a cashless payment system, to reduce risk of dealing with cash;
• Parking management/enforcement and trader access arrangements of the service yard; and
• The need to consider funding promotions/advertisement, leisure/entertainment offerings and regular events, so as to provide the best opportunity for success.

Whilst there should be little call for capital maintenance following the LUF funded redevelopment works within the initial years of reopening, the Council needed to recognise its repair and maintenance responsibilities and how such future maintenance and estate management/staffing costs were to be financed within the future annual budget setting process.

Alternative Options considered and Reasons for Rejection

The Council could choose to consider approaching other operators who submitted proposals during the procurement exercise or the Council could readvertise the opportunity.  However, neither option was recommended given the remaining timescales and wish to manage the day-to-day operation of the Market Hall offering through a Council management/operational staff team.

Resolved                                 (1)   That Cabinet acknowledges the outcome of the negotiations between the Council and the preferred operator for the Accrington Market Hall lease as highlighted in Paragraphs 4.1 and 4.2 of the report.

(2)   That following a review of the available options, Cabinet agrees that the day-to-day operations of the new Market Hall offering is managed by the Council.

(3)   That Cabinet agrees to waive the Contract Procedure Rules and grant delegated authority to the Executive Director (Environment) and/or such senior officer as shall be appointed to manage Accrington Market Hall, to appoint Barker Proudlove, retail space and rental consultants specialising in markets, to work with the Council on developing a potential management structure for operating the new Market Hall offering and to identify and secure existing and new traders, (local where possible), who meet the vision for the redeveloped Market Hall as highlighted in Paragraphs 4.3 and 4.4 of the report.

(4)   That Cabinet notes and agrees that in principal and subject to the Council’s approval as part of the Council’s 2026/27 budget setting process, to allocate sufficient funding for the new Market Hall staffing structure and an appropriate annual revenue operational budget.

(5)   That Cabinet delegates authority to the Executive Director (Environment) and/or such senior officer as shall be appointed to manage Accrington Market Hall, in consultation with the relevant Portfolio Holder and following advice from the consultant Barker Proudlove, to agree opening days and hours for the Market Hall and agree the process and criteria for selecting traders to be offered a lease.

(6)   That Cabinet delegates authority to the Executive Director (Resources) and/or such senior officer as shall be appointed to manage Accrington Market Hall, in consultation with the Executive Director (Legal and Democratic Services) and the relevant Portfolio Holder, to agree and implement all necessary regulation for the operation and management of Accrington Market Hall, all trader fees and charges, (including utilities, communal areas, service yard fees or other service charges), discounts, rent deposits, lease terms and conditions and the signing of such leases.

With the agreement of the meeting, the Chair took Agenda Item 10 next.