Spa deal complete – full transcript of SCDC press release:
May 15, 2015 - Local News - Tagged: 2015, business, Felixstowe, gardens, news, NRG Theatres, planning,Spa, Spa Pavilion, Suffolk Coastal, Suffolk Coastal District Council - no comments
Here’s a full reprint of Suffolk Coastal District Council’s press release about the completion of their deal with NRG Theatres Ltd:
Felixstowe’s Spa Pavilion now officially has a new owner – NRG Theatres Ltd.
Suffolk Coastal District Council closed the Spa Pavilion in January 2013, because it was not attracting sufficient audiences and had become unviable.
Prior to this, it required an annual subsidy of £250,000 of tax payers’ money to stay open (a subsidy of about £8.50 for each concert seat sold) and this figure was rising.
The venue also needed extensive investment to modernise and upgrade the facilities to current standards.
The Spa Pavilion has been ‘dark’ and boarded up for over two years, while an extensive national marketing campaign was carried out. This campaign resulted in two bids being received. These were evaluated and in March 2015, on the recommendation of our professional Agents, JLL, Suffolk Coastal announced it had exchanged contracts with the new owners, NRG Theatres Ltd.
Now, on Friday 15 May 2015, Suffolk Coastal has confirmed that the transfer of the freehold for the Spa Pavilion has been completed.
NRG Theatres Ltd have paid a nominal £1 sum for the freehold, but the deal is linked to a requirement for them to invest in refurbishing the Spa Pavilion and to continue to use it as an entertainment venue.
There are also safeguards in place to ensure that the Council would be paid, if the owners tried to sell it with planning permission for a change of use.
“Our aims with the Spa Pavilion have been to safeguard the council tax payers’ money by eliminating the annual subsidy, while also retaining the Spa as a viable live entertainment centre for Felixstowe,” said Councillor Geoff Holdcroft, who has responsibility for the Spa Pavilion.
“Essentially, we are looking to turn a liability for the tax payer into an asset for the community, creating a centre-piece for Felixstowe by providing a premiere attraction for visitors and local people alike.”
“We have charged a nominal sum for the freehold, because we recognised that if we charged a larger amount, we would simply be taking money out of the project, which could be better spent on being invested in the refurbishment of the Spa Pavilion and we wanted to give this exciting new project every chance of success.”
“What attracted us most to the NRG bid was its resilient business case. We believe NRG has the entrepreneurial skills within its team that are essential to develop the new income streams and innovative leisure uses that will be essential to make this project a success. Importantly, unlike the other approaches we received, it does not need any on-going subsidy or financial support from the tax payer.”
“It is easy for people to be negative about something which is a new venture. But, as a Council, I believe we are right to explore all the options open to us in order to retain the Spa Pavilion as an entertainment venue for Felixstowe. I am sure local people will support that view and turn out to support the Spa in future.”
NRG Theatres Ltd has been formed specifically to save the Spa Pavilion. It has already secured sufficient financial backing to refurbish the building, but is also committed to working closely with local theatre groups and other community ventures to put ‘The Spa’ on to a sustainable commercial footing.
Its aim is to act as a catalyst in the regeneration of the theatre, partnering with all groups able to create productions which will fill the auditorium.
NRG’s exciting plans for the Spa include a cosmetic refurbishment of the front of house, kitchen, bar and restaurant areas to enable a short summer season of touring events and the re-opening of full restaurant and bar facilities, which is likely to be in partnership with a well-known caterer.
This will be followed by a full refurbishment of the auditorium and back of house areas, designed to enable the production of a wide-ranging program of theatre and entertainment later in 2016.
NRG has already announced it will continue the tradition of pantomime at The Spa, partnering with Spa favourite the Dennis Lowe Theatre Company in a run of Cinderella from 19 December 2015 to 3 January, 2016.
NRG Theatres intends to include both local and national theatre alongside music and comedy. It has pledged to work closely with the various interested local groups to ensure that, as far as possible, their needs can be accommodated by the business plan.
Its aim is to act as a catalyst in the regeneration of the theatre, partnering with all groups able to create productions which will fill the auditorium.
NRG’s exciting plans for the Spa include a cosmetic refurbishment of the front of house, kitchen, bar and restaurant areas to enable a short summer season of touring events and the re-opening of full restaurant and bar facilities, which is likely to be in partnership with a well-known caterer.
This will be followed by a full refurbishment of the auditorium and back of house areas, designed to enable the production of a wide-ranging program of theatre and entertainment later in 2016.
NRG has already announced it will continue the tradition of pantomime at The Spa, partnering with Spa favourite the Dennis Lowe Theatre Company in a run of Cinderella from 19 December 2015 to 3 January, 2016.
NRG Theatres intends to include both local and national theatre alongside music and comedy. It has pledged to work closely with the various interested local groups to ensure that, as far as possible, their needs can be accommodated by the business plan.
Ray Anderson, Chief Executive of NRG Theatres, added that he is delighted that the transaction has been completed and said: “We have been truly amazed at the level of interest in, and support for, our project. We have not had one negative comment made to us, and we have been overwhelmed by the hundreds of emailed and written messages of support. Our team are more determined than ever to deliver a successful theatre which will draw people to Felixstowe, as well as engage and entertain the community”.
BACKGROUND INFORMATION
Suffolk Coastal District Council transferred the freehold interest in the Spa Pavilion building to NRG Theatres Ltd on 15 May, 2015, for the nominal price of £1.
The Council has also put safeguards in place aimed at giving as much protection to the Council as commercially possible, whilst maintaining a degree of flexibility for both the Council and the new owners. These include:
A number of covenants being imposed upon the buyers, including the restricting the use of the property to being a venue for live entertainment, the showing of cinema and for the provision of hot and cold food and drinks (and all uses ancillary to that);
An obligation to keep the property in good repair and condition, with the requirement to carry out refurbishment work to the property, at a minimum cost of £100,000, within 12 months – in accordance with plans and specifications previously approved by the Council;
A separate Overage Agreement, which lasts for 10 years, which will be triggered by the disposal of the property, with the benefit of a planning permission for a change of use different from the current use. In these circumstance, an additional amount of money will be payable to the Council, which will be calculated at the time as 40 per cent of the value of the property with the benefit of the planning permission, but deducting the original purchase price and value of all funding obtained by the owners as part of the development/refurbishment of the property (as recorded within the annual accounts of the Company).
It should be noted, this Overage Agreement is only triggered if there is a planned change of use, not if the property is sold to a third party for the same use (live entertainment venue). In this case, the Overage Agreement would be binding on the subsequent owner, to fully protect the taxpayer’s interest.
The Council is also leasing the public toilets which are attached to the Spa Pavilion for the next 15 years, to ensure these facilities remain available.
An obligation to keep the property in good repair and condition, with the requirement to carry out refurbishment work to the property, at a minimum cost of £100,000, within 12 months – in accordance with plans and specifications previously approved by the Council;
A separate Overage Agreement, which lasts for 10 years, which will be triggered by the disposal of the property, with the benefit of a planning permission for a change of use different from the current use. In these circumstance, an additional amount of money will be payable to the Council, which will be calculated at the time as 40 per cent of the value of the property with the benefit of the planning permission, but deducting the original purchase price and value of all funding obtained by the owners as part of the development/refurbishment of the property (as recorded within the annual accounts of the Company).
It should be noted, this Overage Agreement is only triggered if there is a planned change of use, not if the property is sold to a third party for the same use (live entertainment venue). In this case, the Overage Agreement would be binding on the subsequent owner, to fully protect the taxpayer’s interest.
The Council is also leasing the public toilets which are attached to the Spa Pavilion for the next 15 years, to ensure these facilities remain available.
The new owner, NRG Theatres, is to hold an informal event at the Spa to introduce themselves, launch their plans and engage with the community and other interested parties on 5th June 2015, between 11am and 1pm.
For more information – see www.spapavilion.net
Or, if you would like an invitation to the launch event, or wish to find out more about the opportunities for local theatre productions, please contact Ray Anderson at ray.anderson@spapavilion.net by 18th May.
For more information – see www.spapavilion.net
Or, if you would like an invitation to the launch event, or wish to find out more about the opportunities for local theatre productions, please contact Ray Anderson at ray.anderson@spapavilion.net by 18th May.
