Agenda item

Report attached.

Councillor Loraine Cox, Portfolio Holder Housing and Regeneration, provided a report seeking approval, taking into account amended financial implications, to accept the surrender of the existing lease of St James Old School Building, Cannon Street, Accrington from Hyndburn Voluntary & Community Resource Centre Ltd (HVCRC) and grant them a new 25 year lease.

The Leader confirmed that the current voluntary and community sector usage of this building was very successful and that the building itself contributed to the overall quality appearance of St James Square.  Councillor Munsif Dad added that the management team at the Resource Centre was very effective and that the success of the Centre was a credit to them.

Approval of the report was not deemed a key decision.

Reasons for Decision

HVCRC currently hold a lease of St James Old School Building, Cannon Street, Accrington which is due to expire on 18^th September 2024.  HVCRC have requested a new 25 year lease on similar terms to the existing lease to satisfy conditions required in relation to a grant of £165,708 from the Reaching Communities - Buildings Big Lottery Fund (BLF).  This lease will assist HVCRC to satisfy conditions of the grant offer from BLF by enabling BLF to be provided with a satisfactory certificate of title from their solicitor, together with a completed deed of dedication and evidence that a restriction on the title of the land and buildings has been registered in favour of BLF.

The offer of the grant of £165,708 from BLF has been made to the HVCRC in an offer letter dated 24^th April 2018.  HVCRC will be expected to deliver building works comprising new, modern and accessible facilities, including new kitchens and toilets, redecoration and replacement of internal doors throughout, in addition to an automated door entry system at the main entrance of the building.  This work aims to increase the number of activities and services, and number of people attending them, who are elderly, disabled and indeed all members of the community, thus improving community cohesion, health and wellbeing and reducing social exclusion.

The original lease of the building was granted for a term of 7 years less one day from 20^th September 2004.  The replacement lease was for a term of 3 years to 19^th September 2014.  The current lease is for a period of 10 years from 19^th September 2014.  All previous leases including the current one were granted, subject to the tenant paying a nominal peppercorn rental.

The lease will include a user clause which stipulates that the building should be used as a community resource centre in accordance with the tenant company’s charitable objectives.

The building is currently used by a range of organisations delivering key services to a diverse range of groups and clients with over 300 people visiting the site weekly.  A range of social activities take place including yoga, dance and fitness classes available to young and old, both during the day and in the evenings.  The centre also hosts the Red Rose Recovery and Smart Recovery Circle.  Both groups work with vulnerable members of the community in helping them deal with addictions, behavioural issues, encourage self-development and rebuild self-esteem and confidence.  They provide help and support through activities and training and the groups work with multi-agencies to aid recovery and reduce dependency on drugs and alcohol.

The grant offer is conditional on BLF approving a Capital Delivery Plan and Business Plan (which is currently a work in progress by HVCRC) and entering into a lease with the Council and this has been suggested by the BLF to be for a term of 25 years.

The lease will include a full repair and maintenance clause and, as such, it is expected that income derived from the activities will be reinvested into the building for maintenance and repairs, including those identified in a recent condition survey of the building, and are not dependant on HVCRC receiving the grant from BLF.  In 2017 HVCRC reported to BLF a surplus of £29,018.

The tenant will, in accordance with the lease, be expected to ensure they comply will all relevant legislation whilst in occupation and provide the Council as landlord with evidence of that compliance.

Alternative Options considered and Reasons for Rejection

The building could be used as offices with a potential annual rental income of £25,000.  However, there is currently a surplus of office accommodation in the Borough and therefore this income is not guaranteed.

If an alternative use were to be supported, the Council would need to bring the current lease to an end by serving the appropriate notice.  It would then need to advertise the building available to let or for sale.  There is already a surplus of vacant buildings in the town centre and the current proposal supports the Council’s policy to transfer under-used assets to suitable community groups where this is possible.

The building could be opened up to other community groups, but the Council has not been approached by others to manage this building.  In addition, the current tenant has a good track record of providing community based activities and services from this building.  Another group may not have the same success rate.

The new 25 year lease is a prerequisite of the BLF providing £165,708 to HVCRC, which will be used to upgrade the building and facilities.  Not providing the lease will jeopardise this funding opportunity and HVCRC would then be unlikely to be able to afford to carry out these improvements.  This does not negate their liabilities under the terms of the lease to carry repairs and maintenance of the site.

To charge market rent for the building could mean the tenant does not enter a new lease, the BLF funding opportunity would be lost and vital services could cease.

Resolved                          -    That Cabinet agrees to accept the surrender of the current 10 year lease of St James Old School Building, Cannon Street, Accrington, by Hyndburn Voluntary & Community Resource Centre Ltd and agrees to grant a new 25 year lease to Hyndburn Voluntary and Community Centre Ltd for nil consideration on the basis that, having considered part 3 of this report and the amended financial implications in part 6 of this report, Cabinet is satisfied that the grant of the lease and the proposed usage of the building will continue to promote the social, economic and environmental wellbeing of the Borough.

With the agreement of the meeting the next three Items were taken ahead of Agenda Item 12.