Plans for development of the Harold Place site where the toilets once stood is an example of “local government at its worst” according to Rob Lee who leads the opposition Conservative group on Hastings Borough Council (HBC).
Tonight councillors are set to approve a plan that would see HBC borrow the cash required to convert the site into a restaurant, it’s an outcome that’s not proved popular on social media but in defence of the plan Labour’s Councillor Andy Batsford says: “This is a really exciting development opportunity for town centre.”
For Mr Lee, however, he sees the debt the council is accruing as it continues to invest heavily in commercial property, using borrowed money, as “risky and irresponsible”.
“It is farcical that only days after the nation has rejected the borrow to spend policies of the Labour Party that Hastings Labour see fit to continue with their policy of huge borrowing over many decades,” he told Hastings In Focus.
Mr Batsford, HBC’s lead member for Housing, Leisure and Community Engagement says of the plan: “HBC retain the freehold and develop the site on behalf of a long term tenant guaranteeing a long term rent which covers the loan payments and produces a modest but useful much needed profit to plough back into services such as our massive homelessness budget…”
“The old toilet block – one of more than six within waking distance of town centre – was costing over £62,000 per year and needed a further £150,000 for immediate repairs. So closing this one toilet – even with demolition costs – has saved money already.
“We have a long term tenant, making profit for the town and a space that was a policing nightmare… transformed into a modern cafe restaurant.”
Local resident Rachael Pickles asks: “I don’t get it, surely if it’s for private use they build the restaurant rather than the council? What’s the council doing involved restaurants?”
Writing on social media Emma Ridout says: “Is leveraged borrowing by local authorities the next economic crisis on the horizon?
“All it takes is a deep recession for it to go pear shaped. Hard Brexit may well be that catalyst.
“HBC is not as leveraged as other local authorities, but they just don’t know when to stop. All their eggs are in one basket.
“Leveraging is a high risk strategy. It’s how hedge funds operate. High risk/ high return, but you’ve got to be smart. Commercial property isn’t liquid, and HBC have a portfolio full of it.
“Even large restaurant chains don’t want to risk, or tie up capital, to own their own freehold property. What does that tell you?”
Chris Laverick describes the what HBC is doing as; “Entreprenuearial socialism.” While Patricia Fisher says: “Please stop this lunacy now!”
The recommendation coming forward to tonight’s cabinet meeting is: “Cabinet agree to redevelop the site for a restaurant operation (excluding fit out) for a cost of up to £1.2m, subject to planning permission and an agreement to take the finished property on a long lease, from the preferred bidder… on the terms outlined.”
Hastings Borough Council (HBC) would need to borrow that money adding to the more than £50million the council has already borrowed to invest in other commercial property projects around the town. While the council looks set to borrow the monies for this project over a 40 year term the long term lease the restaurant company would be asked to sign would be just 15 years.
And tonight’s cabinet meeting will discuss, in private session, further potential commercial property purchases.
The meeting will be told that HBC has marketed the Harold Place site and has received acceptable heads of terms for a long lease from a, “relatively well known and quality restaurant” if the Council builds out the site to provide a building with a minimum of 2,200 square feet of accommodation.
“The Council has previously looked at options for straight disposal of the site for numerous uses ranging from a restaurant, offices to a small hotel. The creation of a restaurant type offering would appear to be most financially viable proposal received and one which can provide further employment opportunities within the town as well as regenerating the area concerned.
“The retention of the ownership of the site and development by the Council would help ensure that the building would be built to a high quality and design and that there is a greater input on the future use of the site.”
The proposals being discussed, if approved, would see HBC borrow £1.2m, at an interest rate of 3.2 per cent (annuity loan) over 40 years.
The cabinet meeting, which is open to the public, is due to be held at 6pm tomorrow night in Muriel Matter House.
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