Preston Guild Hall deal revealed: Why it went for £1, the Preston City Council clawback option and no sex shops allowed

Posted on - 21st November, 2014 - 7:00am | Author - | Posted in - Business, Preston City Centre, Preston Council, Preston News
New frontage of the Guild Hall put up on the day Simon Rigby took over

New frontage of the Guild Hall put up on the day Simon Rigby took over

The full details of the sale of Preston Guild Hall into private ownership have been revealed.

A Freedom of Information request by Blog Preston shows what Simon Rigby and Preston City Council signed on the dotted line over.

It confirms the building and land was sold for £1 but shows the city council maintains a clawback option.

This trigger means if Mr Rigby did try to sell the building or land off then he would have to pay the city council back any money made from a sale of the building in the first year.

This amount would decrease by 5 per cent for each year of operation over the course of 20 years. So if it was sold in 10 years time the city council would receive 50 per cent of any sale price.

A clause in the contract also gives the city council first right of refusal if the building was to be sold.

It states: “The purchase must serve a formal notice including an indicative price. Upon receipt of the formal notice the Council will have one month to respond.

“If the Council is interested in exercising its right, three weeks will be allowed for the Council to value the Guild Hall and for negotiations.

“If the Council’s offer is accepted by the purchaser a further five weeks will be allowed for the Council to otain relevant formal approvals.”

A previously restricted letter from the Rigby group defends the £1 purchase price for the 999 year lease.

The letter states: “The £1 purchase price is because I will be inheriting a £2 million annual deficit. I will need to invest substantial amounts annual and if and when the building can be turned into profit is not possible to predict.

“I am conscious however that you need the comfort of knowing I will not lose interest and sell on the property soon after the acquisition. In that respect I am prepared to agree to a claw back payable to the council of 100% of any sale price in the first year of ownership by me to 0% in the twentieth year of ownership by me reducing on a straight line basis after my costs have been deducted.”

Simon Rigby (right) receives the keys to the Guild Hall

Simon Rigby (right) receives the keys to the Guild Hall

City council leader councillor Peter Rankin has previously defended the sale.

He told Blog Preston: “The Guild Hall was costing the council over one million pounds a year to run.

“This was unsustainable and couldn’t continue in a situation where, because of cuts in our government grant of over 50 per cent since 2010, we have had to look at all our spending, including options for the Guild Hall.

“I and my cabinet colleagues have wanted to do everything possible to keep the Guild Hall operating in Preston. But make no mistake, without Simon’s intervention the Guild Hall would have closed in March 2015, which would have been a tremendous loss to the city.”

The contract also states Mr Rigby is not allowed to open a sex shop, private cinema, tattoo parlour or pay day loan company within the Guild Hall Arcade.

25 or more days of the year must be made available to the community of Preston and priced on a reduced rate structure agreed annually between the city council and the Rigby group.

Preston Tourist Information Centre’s future at the front of the building is guaranteed until at least February, with the Rigby group charging no rent.

A £250,000 arts trust fund to support community arts events in the city is detailed to be administered by a new charity called The Guild Foundation.

Architect drawing showing inside the new restaurant

Architect drawing showing inside the new tapas restaurant

Mr Rigby has vowed to invest up to £1 million initially in the building, and has planning permission for a new Italian restaurant. Work has also started on a new tapas restaurant in the Arcade.

What do you think of the deal? A good deal? A bad deal? Let us know in the comments below

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