Scheme depends on council’s cut of business rates to break even
Here are the first images of how the new publicly funded restaurant to be built in Harold Place might look.
Hastings Borough Council’s (HBC) cabinet recommended on Monday night that full council be given the chance to discuss the plan for HBC to borrow £1.7m to build premises that will be occupied by a ‘mid-market’ national restaurant chain. The council’s finance boss said it could even be possible for the council to stretch the borrowing period to 50 years.
With no dissenting voice in the room the plan was approved unanimously as the meeting discussed the creation of what they say will be “an iconic building.”
There will be little profit in the project for the council though and it would need only a 0.6 per cent increase in interest rates for the project to become loss making.
Councillors were told: “The cost of borrowing £1.7m at the current interest rate of 1.9 per cent… over 40 years would result in a net cost to the Council of some £868 per annum, this excludes the revenue that would be receivable in respect of business rates – estimated to be in excess of £10k each year – and this would make the project financially viable.
“If the scheme were to be financed over 50 years, it would generate a surplus of £7,180 per annum at current interest rates, before consideration of business rate income.”
However, finance boss Peter Grace warned: “In terms of sensitivity analysis if interest rates were to increase to 2.5 per cent in respect of a 40-year loan there would be a funding deficit of £7,478 a year.”
Keen that the council should push ahead with the project Councillor Peter Chowney told the meeting: “This is an important building on a significant site.”
He said it was important to get a good quality building and the council had already rejected what he called “value engineering” which would reduce costs by using materials of a lesser quality than those planned. He was confident the new restaurant would be a ‘valuable asset’ to the town.
Councillor Judy Rogers said she would say more when the matter was discussed at full council but told colleagues she was glad to see something being done with the site that would a ‘bonus’ not just for the town centre but for the town as a whole.
“We do need to see something happening on that site,” she said.
Following the meeting Council Deputy Leader Paul Barnett issued a statement saying: “I am delighted that we are close to securing this important new regeneration project for our town centre. We will continue to look for grant funding opportunities to support the project to reduce the cost to the council.
“As a significant project in a key part of the town it is vital that the building is of the highest quality. We do not believe that lowering the quality of the build is the correct thing to do. The development will also provide job opportunities both during the build and in the running of the restaurant when the building work is complete.”