Taxpayers bear multi-million pound losses on Harrogate’s vacant Royal Baths

The long-term vacancy of two prime retail units in Harrogate’s Royal Baths has cost the taxpayer almost £1 million in lost rent and service charges, the Stray Ferret can reveal.

North Yorkshire County Council paid £9.5 million for the Grade II listed building in 2018. A current council report has valued it at £7 million and forecasts it to generate an investment return of just 1.64%.

But in addition to the £2.5 million decline in property value, the long-term vacancy of both buildings is haemorrhaging lost rental income each month.

A year ago today (December 9, 2022) the council evicted the owners of the Viper Rooms nightclub — one of four commercial units it lets in the Royal Baths.

The venue has stood empty since, despite repeated claims by the council of “significant interest”.

The former Potting Shed bar, which along with the JD Wetherspoon pub and Royal Baths Chinese Restaurant make up the other commercial units, has been empty since the council acquired the historic complex five years ago.

The Stray Ferret asked North Yorkshire Council, which succeeded North Yorkshire County Council in April this year, about the cost of the ongoing vacancies.

A council statement said rent for the Viper Rooms premises “would have been in the region of £90,000 since December last year”.

It added maintenance for the building is covered by a service charge which is approximately £75,000.

The council added no business rates are payable due to an exemption for the premises as a listed asset.

As for the Potting Shed space, the council said the original rent was £125,000 a year when the county council acquired the vacant unit in 2018. That figure represents a loss of £625,000 over five years.

The vacant former Potting Shed unit.

It did not give a figure for the loss of service charge income at the Potting Shed but said no business rates were payable on either premises due to an exemption for them being a listed asset.

The council said “no agent’s fees have been paid at this time” to Savils, which has been marketing the Viper Rooms, adding any fee “will be made when the unit has been let”.

Asked why it was taking so long to find a Viper Rooms tenant, despite the apparent interest, the council said:

“The leisure market continues to be highly variable. Savills has conducted a significant number of viewings, and we do now have offers for both vacant units.

“An offer for the Viper Rooms unit has been accepted while the offer for the Potting Shed is due to be considered shortly.

“The situation of having vacant units is by no means unique and is a widespread issue nationally following the impact of the covid pandemic and the cost of living situation.

“Harrogate’s Royal Baths do, however, cover their costs and the council has not had to use funds from alternative budgets to support the asset.”

Council urged to “get their act together”

Former Conservative councillor Richard Musgrave branded the Royal Baths an “under-performing trophy asset” in 2021 because of the sum paid and returns generated.

The continued loss of rental income since, the depreciation of the value of the asset and its low investment returns has again raised questions about the council’s business acumen.

The Royal Baths forecasted return of 1.64% is by far the lowest in the council’s portfolio.

Cllr Stuart Parsons, leader of the Independent group on Conservative-controlled North Yorkshire Council, said the situation was “extremely concerning”. He said:

“The council really ought to get their act together and get it sorted immediately.

“A 1.64% return on investment is very low. They could have put the money in the bank and got just under 5%.”

Cllr Parsons said the newly formed council was still going through its investment portfolio to decide which assets to keep.

The Royal Baths complex

Tom Gordon, the Liberal Democrat candidate for Harrogate and Knaresborough at the next general election, said:

“North Yorkshire Council’s approach to business and investment in Harrogate is disappointing, and we deserve better.

“The continued cuts to local government from the Conservative government have left local authorities scrambling to buy up investment properties as new revenue streams. Often they do not have the skills of expertise to make a success of such investments, and we can see how that plays out first hand with the Royal Baths as one example.

“Their approach has been shortsighted, resulted in the loss of local businesses, and decreased the value of the assets they purchased. Someone should be accountable for this decision.”

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Asked to respond to claims that it lacks the commercial acumen to run businesses, the council said:

“North Yorkshire Council has a wide range of skills among its own staff, but also recognises that external support is necessary for assets that are more complex. A number of external professionals assist the council in managing this asset is the best interests of local residents and taxpayers.”

Paul Kinsey, who owned the Viper Rooms, has been locked in protracted negotiations with the council over the fixtures and fittings, declined to comment.

 

Harrogate council putting up homeless people in town centre hotels at undisclosed cost

Harrogate Borough Council is paying some of Harrogate’s larger town centre hotels to provide accommodation to homeless people.

The Stray Ferret approached the council a month ago after a well-placed source revealed the names of some of the town’s best-known hotels that are being paid to put up homeless people. We asked the council how many homeless people it was helping, why it was having to use town centre hotels and how much it was paying the hotels.

The council, which has duties to prevent and relieve homelessness, confirmed it used hotels “as a last resort” but declined to reveal costs.

A council spokesperson said:

“Should someone become homeless we have a number of options available to help them find somewhere safe to stay on a temporary basis. As well as helping them plan for the long term and secure permanent accommodation.

“We have hostels in Harrogate, Ripon and Knaresborough as well as Fern House in Starbeck, our purpose-built temporary accommodation with 19 self-contained bedrooms.

“Should someone be placed in a B&B or hotel, they are only ever done so on a temporary basis and as a last resort when no other suitable accommodation is available.

“Currently, 16 people are being temporarily accommodated in B&Bs and hotels, and 82 in hostels, until we find a more permanent solution.”

The spokesperson added the council worked with partners “to find more secure accommodation” while it provided temporary relief.

Fern House, which cost £2.3 million to build, opened 18 months ago to help provide more accommodation for homeless people.

We once again asked the council to provide details of how much taxpayers’ money it was paying the hotels. But despite subsequent requests, it has not revealed how much it spends on hotels.

The spokesman initially said he “didn’t have the costs to hand” and it “wasn’t a straightforward answer”.

Three weeks ago he said he had asked a colleague in finance to collate the information and they would “pull it together as soon as they can”.

But no further details have been provided.

The Stray Ferret has submitted a Freedom of information request.

 

Harrogate council to move ‘eyesore’ £4,350 smart bins

Two new smart bins branded an ‘eyesore’ outside Harrogate’s Valley Gardens are to be moved.

Harrogate Borough Council said today it would “find a more suitable location for the bins”, which it revealed cost £4,350 each.

The bins use sensors to identify different types of waste, as well as how full the receptacles are and whether they have been damaged.

Harrogate Civic Society and the Friends of Valley Gardens both called for the bins to be relocated this week because of their visual impact on the conservation area.

The council has installed six smart bins, costing a total of £26,1000, in Valley Gardens. But it is the two outside the main entrance that have attracted criticism.

Stuart Holland, co-chair of the civic society, said it welcomed receptacles to collect waste and recycling but described the smart bins as ‘eyesores’.

Ann Beeby, secretary of the Friends of Valley Gardens charity, said it has aesthetic concerns and had asked the council to consider moving them inside the entrance.

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A council spokesman said today:

“The location of the bins was chosen in areas where footfall is high and where in peak season bins require emptying multiple times a day.

“We’d like to thank Harrogate district residents and Harrogate Civic Society for sharing their comments on the bins. And following feedback from the civic society, we will work with them to find a more suitable location for the bins outside Valley Gardens to preserve the heritage of the town while maintaining a high footfall area.”

Smart bins ‘improve efficiency and increase recycling’

Smart bins at Valley Gardens

Two bins have also been installed in the children’s play area.

The council spokesperson said the new solar-powered compacting public bins would “improve efficiency and increase recycling”.

They added:

“Each self-contained 240l bin, that prevents birds and vermin from entering, can compact the volume of up to 10 standard bins.

“Resulting in each pair accommodating a total of up to 4,800 litres of waste and recycling and a reduction in the time and cost of emptying bins, as well as a reduction in fuel costs and carbon emissions.

“Meaning we can spend more time litter picking and keeping the district clean and looking its best.

“The allowance for recycling glass, plastic and cans means that these items can be removed from general waste and increase the district’s recycling rates.

“Much like the standard bins that have recently been retrofitted with a sensor, we are also able to monitor fill levels and are alerted if there are issues with the bin, or the bin becomes full before its next collection, ensuring litter is kept to a minimum and we can ensure the district is kept clean and tidy.”