Decision details

The Executive Shareholder and Trustee Committee agreed:

(1)       That negotiations be concluded with Matrix for a new 20-year lease, to include rights for Matrix to undertake proposed works to the Pavilion and open a community café, without the need to advertise the lease on the open market.

(2)       That a four-week public consultation be undertaken in respect of the proposed new lease and proposed use.

(3)       That a Tenancy at Will be granted to Matrix allowing continued occupation of the building from 22 December 2019 until a new lease is completed.

(4)       That the Trust authorises the procurement of a contractor to replace the roof of the Pavilion at a cost of up to £50,000 in spring 2020.

Reasons for Recommendation:

The lease to Matrix is due to expire on 22 December 2019.  The new lease will generate more rental income for the Trust, allow Matrix to improve the building and open a community café.  This will make Matrix more financially sustainable and allow it to expand its youth work.

Options considered:

1.    The Trust could renew the lease to Matrix for a further five years.  It would still be necessary to undertake a public consultation and seek the ESTC’s approval before undertaking the consultation and finalising terms with Matrix.  This would not provide Matrix with a long enough term to obtain funding for the proposed works to the building.  Consequently, the building would not be improved, and the change of use would not be implemented, meaning that Matrix would not be able to create an income stream to invest into the charity. 

2.    The Trust could advertise the opportunity to lease the building on the open market and seek best offers.  Given that the 2014 Deed of Variation restricts leases granted in respect of the Pavilion to charitable uses and projects, the demand for the building is likely to be extremely limited.  A report has also been obtained from an external surveyor on the market rent and the surveyor commented that there would be no advantage to the Trust in formally advertising the proposed 20-year lease term on the open market.

3.    The Trust could renew the lease to Matrix for a 20-year term.  This would generate more rental income for the Trust and enable Matrix to obtain grant funding and make improvements to the Pavilion.  Income generated from the café use will make Matrix more financially sustainable and allow the expansion of their youth work.

Conflicts of interest:

None.