Decision details

8.1

The Executive Director, Place submitted a report in relation to the Exchange Place Studios at Castlegate.

8.2

RESOLVED: That:-

(a)

Cabinet approves the proposals to enter into the agreement to grant a lease of property at Exchange Place to Yorkshire Artspace Society (YAS) Ltd on the terms set out in this report;

(b)

Cabinet delegates authority to the Executive Director, Place, in consultation with the Director of Capital and Major Projects and the Director of Legal and Governance, to agree the terms of the documentation required to effect this transaction; and

(c)

the Director of Legal and Governance be authorised  to complete such legal documentation as she considers necessary or appropriate in connection with this transaction on such terms as  she may agree to give effect to the proposals set out in this report and generally to protect the Council’s interests.   

8.3

Reasons for Decision

8.3.1

The proposed refurbishment of the Exchange Place Studios will be a major boost for the cultural attraction of the City Centre and the Castlegate area in particular. This has wider economic benefits in terms of making the city an exciting place to locate and attract talented staff for businesses in the creative and digital industries which is a key growth area.  

8.3.2

It is important to ensure that the closure and demolition of the former markets building does not result in a decline at Castlegate and that investment is secured into new projects that will help to transform the area.

8.3.3

The proposal to grant a lease for 100 years at a premium of less than the full open market value will potentially unlock a grant from the Arts Council of £500,000. The refurbishment of the property will benefit a Council owned asset which is currently in a poor state of repair.

8.3.4

The proposed option to repurchase the property at the original price also gives the Council additional opportunity to generate a much higher value in the future.

8.4

Alternatives Considered and Rejected

8.4.1

The Council could continue to hold the property for the next few years before seeking to dispose on the open market and may achieve a higher value if it did so. However future values cannot be guaranteed and potential uses may not have the same vibrancy and economic benefits for the regeneration of Castlegate as the proposed disposal to YAS.

8.4.2

The property was empty for several years after South Yorkshire Passenger Transport Executive (SYPTE) vacated, as it proved difficult to find a purchaser or tenants prepared to take the property on in its poor condition. If the proposal to grant a long lease to YAS is not approved, then YAS would be likely to stay in on a temporary basis, but without a long term interest they may take a less proactive approach to maximising the studio use and wider events in Castlegate. There is a limited risk that YAS may decide to vacate, in which case the Council would incur management costs until such time as the property could be sold.

8.4.3

As a further alternative, the Council could consider using its own capital resources to carry out the refurbishment works rather than an Arts Council grant and charge YAS a higher rent to recover those costs. However, the Council’s capital programme has limited capacity and this may not be seen as a high priority for the use of limited funds. As stated at paragraph 1.1 of the report the YAS business model for all of their properties is based on the rent from the studio holders covering the running and management costs, with any surplus used for artists’ development, public events and community engagement. It is therefore unlikely that YAS would be able to pay more than a nominal rent to the Council.

8.5

Any Interest Declared or Dispensation Granted

None

8.6

Reason for Exemption if Public/Press Excluded During Consideration

None

8.7

Respective Director Responsible for Implementation

Simon Green, Executive Director, Place

8.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

Economic and Environmental Wellbeing