Burton Bradstock Parish Council

Post Office & Village Shop

Progress report

Liaison with the Tenants

Following the last meeting of the Parish Council Councillor Dixon made a further attempt to set up a meeting with the Tenants[1] but without success.

Following the Tenants being sent draft copies of the timescale developed for resolving matters and possible rent setting criteria, the Chairman received the email at Appendix 1 to this report. His reply is also shown at Appendix 2.

While the Tenants have so far rejected discussions between them and the Parish Council as a basis for moving forward, they have commented on the proposed rent setting criteria (see later).

Rent setting criteria

The note on draft rent setting sent to the Tenants is shown at Appendix 3. The Village Society Trustees have also been asked for their comments, which will be reported orally at the meeting.

As far as the comments in the Tenant’s email are concerned, the note could draw attention to the Notice terms and indeed the compensation for Tenant investment referred to in the Chairman’s reply, both of which are included in the lease. Concerning the Tenant’s comment that lease changes will be rejected, as the Chairman notes, factors taken into account in setting the rent which are not matters of fact, should be built into the lease. While the Tenants’ reply on this issue is awaited, we think that valuation advice on a “with” and “without” the new factors should be sought.

The Council is requested to bring forward any other factors that it believes should be taken into account in setting the rent.

As the Council knows, the intention is to seek quotations and appoint a professional Valuer to advise on the market rent (per Government guidance) and a “sustainable” rent that takes into account the nature of the business that the Parish wishes to promote. Finalising the brief for quotations will now follow the PC meeting on 1 December, with a view to making an appointment before Christmas. The valuation advice should be available for reporting to the Council at its February meeting.

The Tenants’ legal costs

The Chairman’s email at Appendix 2 covers this matter. We cannot recommend meeting the Tenants’ costs other than on the basis of the original proposal put to them. If the Tenants are prepared to work with the Council as originally envisaged, then we would recommend that the Tenants’ reasonable legal costs incurred towards the end of the process of resolving matters and connected with any proposed changes to the lease terms are met.

Recommendations:

1.    That rent valuation advice is sought on the basis of “with” and “without” the potential new lease terms;

2.    That, subject to the Tenants working with the Council to progress matters, the Council meets the Tenants’ reasonable legal costs incurred towards the end of the process of resolving matters and connected with any proposed changes to the lease terms are met.

Councillors Graham Moody & Dave Dixon

Burton Bradstock Parish Council

24 November 2010

16^th November 2010                                                                                                                                      Appendix 1

Archie Mackie

Chairman

Parish Council

Dear Archie,

Ref: BBPO Rent Review

I find it necessary to write to you in relation to the ongoing saga of the rent review for the Post Office and Shop. Frankly Simon and myself are both bemused, angry and stressed by the events of the last few months.

I therefore need to make it clear to you our position on the matter.

1. We met with Graham Moody and Dave Dixon shortly after the September PC meeting (at which verbally they said that they wish to withdraw the proposed rent increase) but we were informed that under the current lease that it was most likely that the PC would be forced to impose a rent increase. We asked why this situation had suddenly arisen as we understand our lease was largely the same as all previous tenants. We were told at this meeting that the PC were awaiting further legal advice which would take approx 3 weeks. We agreed to wait for that definitive advice in order for us to have a clearer picture of our position and options as tenants. We did not agree to enter into a new lease at this meeting. We agreed to look at the possibility of a new lease but said that we would need our legal fees paid as we had already a legal lease in place.

We have had 2 subsequent telephone calls with GM. Both times we reiterated that we would need to see the definitive legal advice and if so necessary a copy of the proposed new lease. Again we made is very clear that we needed these in order to take our own legal advice and to be in a position to review our options. GM was keen to arrange a meeting but we said that until we had seen this advice there was little point. Indeed the last time we heard any mention of this definitive legal advise was in GM’s email of 11^th October. “At the time of drafting this further advice has yet to be received, and I shall report orally on any developments at the meeting.”

What has finally prompted this letter are the 2 recent emails from GM which discuss a “timeline” and “sustainable lease”. In both of which GM seems to be ploughing ahead without our agreement whatsoever, indeed nor has he even addressed any of our verbal and written questions and concerns.

With regard to GM’s latest email reference the valuation of the Post Office. The valuation should also take into account that there is a 6 month break clause. Not many fools would want to take on a business, invest capital and build up a business when your landlord can effectively take your business with 6 months notice. You never know it could be that the rent might be valued below its current level! Also the PC should be looking for a similar village Post Office and shop, of similar square footage, in similar sized village carrying out community deeds in rural West Dorset to have a comparable rentable value.

We therefore are asking you for the following:

Please can we have access to this definitive legal advice that GM seems to working from. As yet we have not been shown any evidence that a new lease is required.

Preferably let us have the name and contact details of the solicitor who is advising the PC so that our solicitors can engage directly. We would take this opportunity to reiterate that we have a current valid lease and that should we agree to explore a different lease we would categorically NOT agree to any of the additions that GM is suggesting in his email regarding the valuations. I made this clear to GM in my email of 22^nd October 2010.

SPAR

We are horrified in relation to the comment in GM’s report suggesting the possibility of SPAR taking on the Post Office “…the position is not one of preserving the Post Office, as SPAR would probably take it on” GM’s email 11^th October

This indicates a complete lack of understanding of the services provided and only available at a Post Office for the elderly, disabled and unemployed. My email 22^nd October to GM “I would have thought that it was vital for the elderly villagers in Burton Bradstock to have a local shop, Post Office and community asset within easy walking distance as we are in the center of the village.    This should be looked at as a possibility of satisfying condition A ii.”
We could take GM’s comment as an indication of the possibility that you are planning to close the Post Office? Perhaps this is the time to re open the public debate for parishoners and surrounding villages. I do not think that they would be impressed by this as we are most definitely are not.

Furthermore we would ask again for a comprehensive explanation as to why we were not informed as part of our application and lease negotiations that, as you have recently disclosed, the rent at the Post Office is effectively subsidised and if such subsidy were to end that the rent would have to increase dramatically. Surely this should have been disclosed at the time of application and lease negotiations and would have made us think twice about taking the business on and most certainly we would not have invested a substantial amount of our capital into the fabric of your building.

We await your response to the above.

Kind regards

Gwen & Simon Holdcroft

Cc: The Village Society by hard copy

From: Archie Mackie                                                                                      Appendix 2

To: Gwen Holdcroft

22 November 2010

I am sorry to hear that both of you are bemused, angry and stressed by the events of the last few months. It is a matter of public knowledge that the Parish Council is committed to preserving the nature of the village shop and Post Office operation. To this end the Parish Council has stood back from progressing the proposed rent increase.

When Councillors Dixon and Moody met with you and Simon in September I had understood that you agreed to the package agreement proposed by the Parish Council. This was that, subject to legal advice, the proposed rent increase would be withdrawn and you would work with the Parish Council to seek to develop a new lease that will enable the Post Office and village shop to continue to thrive. 

On 11 October Councillor Moody emailed you the “addendum” report to the October Parish Council meeting, which sets out the legal advice received by the Parish Council. This is in the form of a Legal Topic Note prepared by the National Association of Local Councils. In tells the Parish Council how the Post Office and village shop can be let at less than a market rent. From this advice it follows that the current lease needs changing at least in respect of the rent clauses, which require a market rent to be set.

Given this legal advice, Councillors Moody and Dixon have been trying to discuss with you and Simon how the Parish Council can work with you to develop new lease terms, but which so far you have declined to discuss.

The Parish Council’s offer to withdraw the rent increase included working together in this way.

From your e-mail I have to ask whether you are willing to start and participate in this process as previously agreed? Or are you saying that you have changed your minds and do not wish to work with the Parish Council to develop new rent terms?

The Parish Council’s proposal to work with you on a new lease was aimed at agreeing with you any new “business terms”, including how the rent would be set, before involving legal advisers. Legal advice would be taken on the new lease terms towards once the principles had been agreed. Councillor Moody’s offer to recommend to the Parish Council to meet your reasonable legal costs was in this context.

The Parish Council has not yet appointed a solicitor on this matter and does not intend to do so until draft new terms have been developed.

You refer to the two documents that Councillor Moody has emailed you. This has been in an effort to keep you informed of what the Parish Council intends to do and to seek your views, particularly on a new “sustainable” basis of setting the rent.

We shall build your points about rent setting into the criteria developed so far and let you have a revised copy of the document. In revising the current draft, your email says that you would categorically not agree to include in the lease a number of the proposed rent setting criteria, e.g. providing a range of groceries and provisions including locally produced foodstuffs. If a particular factor is to be taken into account in setting the rent, it is only right that it should also be included in the lease. So are you saying that we should not have these factors taken into account when setting the rent?

Both the market rent valuation and the new “sustainable” rent valuation the Parish Council is seeking will be handled by a professional Valuer with all the appropriate information at hand.

In relation to the SPAR, you have clearly taken Councillor Moody’s comments out of context. They are concerned with how within the law we might justify a lease of the Post Office and village shop in excess of 7 years. There are no plans to close the Post Office and village shop whatsoever nor to relocate it to the SPAR or anywhere else.

You also refer to your having invested in the premises and appear concerned that you might not be compensated for it. There are two points I wish to make here:

1.      Your investment would be ignored in setting the rent; and

2.      The current lease provides for you to get value out of your investment on its termination (Schedule 3 The Landlord’s Covenants clause 4).

The original reason for the Village buying the Post Office and village shop was to preserve its operation and to prevent the building being sold and transferred to residential use, this being worth more than the business operated. From the outset it was recognised that the rent would not meet outgoings, particularly when considering the extent of works required. Moreover the Parish Council is not contemplating an end to that subsidy, but wants to set a rent that sustains the current operations.

 

Archie H Mackie

Copy to Village Society Trustees

Burton Bradstock Post Office & Village Shop              Appendix 3

Valuation Factors

The Table below lists a range of factors which should be taken into account in determining the appropriate rent for the Post Office and Village Shop, so that the nature of the business operation there is sustained.

We would expect the first 6 items to be taken into account automatically, with the further items being factors that contribute to the overall community nature of the shop that we wish to sustain. As these further items would be taken into account in determining the appropriate rent, they should also be incorporated into the Lease terms as indicated in the second column of the Table.

Item	Include in Lease
Size and arrangement of premises	No
Location of premises	No
Competition from local SPAR	No
Ease of access to Bridport	No
Local demographic factors (see web page from 2001 Census at http://www.dorsetforyou.com/325307	No
Holiday season increase in the population	No
Current lease terms excepting rent and related clauses but including non-residential, tax, repairing and insuring responsibilities between Landlord & Tenant	Yes (already there)
Inclusion of a Post Office (and corresponding income)	Yes (already there)
Restrictions re alcohol and tobacco (NB possible update ref request to lift the alcohol restriction to allow a range of local wines etc).	Yes (already there)
Need to assist with advertising and ticket sales of local events	Yes (already there)
Need to provide a range of groceries and provisions including locally produced foodstuffs	Yes
Need to provide a range of goods and services, including opening hours, typical of a village store	Yes
Tenant’s improvements to be identified and discounted	Yes (already there)
Retain 3 yearly rent review but have RPI indexation in the interim (softens the triennial increase)	Yes