Update on the Asset Transfer – November 2017

Introduction

In June 2017 CCT was informed that Lambeth Council had selected the Trust as the ‘Preferred Bidder’ for the asset transfer of the Carnegie building to become a Community Hub. Discussions have continued since. We have been very disappointed by the slow progress, at being excluded from the technical decisions affecting building works and the planning applications now approved, and by the Council’s lack of attention to detail and intransigence on a number of issues critical for the success of our plans.

In September we published a Statement of Requirements, which we regard as essential to our plans as developed over the years since 2012 and submitted to Lambeth in October 2016.
Since September we have received some responses to our requirements, which we have now been able to assess. We set out below our 6 requirements, together with the current offer from the Council in italics, followed by our comments.

Response to our requirements

1.‘The structure of the lease arrangements for the Asset Transfer must be acceptable to CCT as advised by its solicitor. The Community Hub project, to be viable, requires transfer of the whole building and grounds apart from the residential flats’.

We have been offered a lease (as an asset transfer) of the ground and first floors except the flats section. The interior of the basement to be separately leased to GLL at a peppercorn rent until 2022 with an option to renew for a further 20 years. If GLL do not renew in 2022, the basement lease to be offered to CCT at a peppercorn rent on the same terms as the current Asset Transfer. Lambeth remains responsible for the basement’s exterior up to 2022.

CCT comment – This is not the full Asset Transfer we had been invited to bid for, planned and applied for. Having decided to impose GLL on the building, Lambeth now proposes to remove the basement from the Asset Transfer for the duration of GLL’s occupation of it.
(Note: The Cabinet Decision of October 2015 gave Carnegie Library, and two other library buildings, to GLL for 25 years at a peppercorn rent).

2. ‘It is essential that the Trust as a charity receives rent for the use of the basement as a gym at an agreed market rate, to ensure both that the Community gets compensation for the occupation of the basement by a commercial organisation and that capital funding grant applications might succeed. An independent valuation which supports the rental figures included in our Business Plan has been completed and is now with our solicitor’.

We have been offered, as compensation for the basement being excluded from the Asset Transfer while GLL is in occupation, a sum of £40k per year for the Community Hub until 2022, and thereafter £40k (indexed to RPI) plus a gym profit share. This annual compensation would not be paid by Lambeth Council but would be obtained by Lambeth from the London Community Fund.

CCT comment – this sum falls short of our original budgeted rent of £87k (£15 per sq.ft.) from the basement. Moreover whilst we can be reasonably confident of the £40k grant in the first year, it is not clear whether it can be guaranteed going forward. It is also frustrating that Lambeth’s deal with GLL, still not fully clear to us, means that they do not pay rent for 25 years.

3. ‘CCT is strongly advised that unless the occupier of the basement (GLL) can pay a market rent to the Trust, the legal structure should ensure that Lambeth Council makes good this deficit. The suggested structure is for Lambeth Council to have an intermediate lease from the Trust whereby CCT is paid this rent by Lambeth Council, and Lambeth enters into a sub-lease with GLL. This income will be invested in the Carnegie Community Hub to secure its future on a sustainable basis.’

Lambeth will not consider this ‘sandwich’ structure proposed by CCT’s lawyer, which requires the Council to pay rent to the Trust, with GLL as their sub-tenant. Instead, they propose to remove the basement from the Asset Transfer altogether, with compensation as in 2 above.

CCT comment – as 2 above.  It should be recalled that the Trust first proposed creating additional space in the basement because work on its Business Plan indicated that if it was to support a free library and other community activities it would need a solid income-stream from the income-producing space this excavation would create.

4. ‘Supported by our Conservation Accredited advisers, Butler Hegarty Architects, CCT will work to mitigate and improve the negative impact on the ground and first floors created by the design that has already been given Planning Consent. If necessary, new Consents will need to be sought.’

Lambeth was shown strong advice from architects Butler Hegarty that the new building proposals and other interventions the Council wanted in order to support GLL, which had been approved by the Planning Committee, should be reviewed, particularly with regard to the air and heating ventilation plant proposed in the garden, where they will take about 35% of the space. Lambeth decided to continue the work as planned, for cost reasons and would make no changes to the building proposals now underway. A large metal terrace over the ventilation plant has been offered to partly hide the equipment in the garden and to create a new external space outside the main building.

CCT comment – this is particularly disappointing as Lambeth’s design agents are not conservation specialists. Our view is that whilst Lambeth’s building proposals evidently met Lambeth’s planning requirements for a Grade 2 Listed building, more appropriate proposals that reflected the building’s architectural importance could have been secured if Lambeth had taken more time and consulted us and our architects, who are conservation experts, before going ahead. They say that they could not consult with us when this planning took place as we were in a competitive bidding situation. However we can see no reason why Lambeth could not have consulted both bidding organisations while developing its proposals for works in order to take account of any impact these might have on the proposals of the two bodies seeking to take ownership of the building. A big opportunity was rejected later in September also, when our architects’ offer to revise the plans for Stage 2 of the building work to find a more sympathetic approach to the ventilation plant was rejected. A metal terrace as proposed by Lambeth will not hide the ventilation plant, nor reduce the persistent and high noise levels affecting the garden. The alterations now being implemented have a significant negative effect on our proposals for Community use of the building

5. ‘The existing Planning Consent does not allow for the self-employed business use which is the other key income stream in our Business Plan so this will need to be re-instated’.

CCT will need to apply for additional planning consent for commercial purposes (that is, anything which generates income). Lambeth will support us in this.

CCT comment – this could have been avoided as our Business Plan made clear 13 months ago that we would be carrying out commercial activity.

6. ‘The capital funding which Lambeth has allocated to the excavation of the basement and associated works on the other floors will need to be capable of being specified as Match Funding for the Heritage Lottery Application which will be made by CCT’.

Lambeth has offered a joint application to the Heritage Lottery Fund. They are still seeking confirmation that the HLF would accept such an application.

CCT comment – we need to be clear about this and no-one seems able to establish the position.  

Further Issues to Resolve

Some further issues remain to be resolved in the current round of alterations including

  • the very important location of toilets. Disabled toilets on the ground floor without compromising the building, and agreement for Community Hub users to have shared use of the suite of toilets in the basement
  • the location of the kitchen/café

The Library

The Library itself will be run by Lambeth Library Service in space hosted by CCT. Lambeth intend to open the Library in February ‘partnered’ by GLL. The pledge is to open 7 days a week with staffing by Lambeth and GLL.

Conclusions

It is clear that the offer from Lambeth is now considerably different from the Asset Transfer originally proposed by the Council, to pass the building to the Community. This is very disappointing for the Trustees who have worked hard over five years giving large amounts of time to planning and negotiation. In giving Carnegie to GLL for a gym Lambeth has greatly reduced the space available for Community use, including in the garden. In doing so they have ended the life of this fine building as a fully public asset, donated over 100 years ago for the education and lifelong learning of the community of Herne Hill.

The revised offer may not fully invalidate our Business Plan to develop an active and successful Community Hub, although this will have to be revised to reflect the reduced income stream.

As we move forward with the new offer there are some changes to the Board of CCT. In view of the actions and behaviour of the Council, its failure to deal with the Trust in a professional and competent manner, and its reversal of the Asset Transfer Policy as proposed to us in 2012, Carol Boucher, as Chair of the Board, and Fred Taggart, as Secretary, both feel unable to continue.  Carnegie Community Trust will continue working hard to make a revised Community Hub viable. There will now be an interim chair pending wider and more open discussions with the Community.

The immediate priorities of the Trust are:

  1. Agree the Heads of Terms with Lambeth Council
  2. Establish the position of the Heritage Lottery Fund about a joint bid
  3. Invite new Trustees
  4. Appoint a new Chair and Secretary
  5. Hold an Open Meeting

Please contact getinvolved@carnegiehernehill.org.uk if you would like to know more or offer your help.

Carnegie Community Trust CIO