Post Launch Event Update March 2023

Hi everyone,

And welcome to the Co-op blog! Thanks to all of you who came along to our information event on March 16. So great to see so many faces down there and so much support from our community. Plus it was great to see so many young new bands performing. It’s really exciting to be working towards getting our service back open for the next generation of musicians. Huge thanks to 40/40A, Eoin Feeley, Varicose Veins, The Call Up and Hellen and Amy for running the open mic. Plus our ward councillors Caroline Jackson and Tim Hamilton Cox for joining our Q and A session.

For those of you who were unable to make the meeting, we wanted to share some of the information we talked about at the event to bring you up to speed. This is YOUR Co-op and you deserve to know what has been going on for the last 4 years. Going forward we intend to have complete transparency with our users and the wider community and we will be using this blog to keep you up to date on the latest news and report exactly what is happening as we progress with our plans to get the Co-op back up and running.

So what’s been going on for the last 4 years?

As you probably all know, back in November 2018 councillors unanimously voted to save the future of Lancaster Music Co-op. They all agreed on a resolution to rescind the eviction notice, give us a long term affordable lease at below market rate and carry out urgent repairs to the building. Four years on and no repairs have been carried out and we’ve yet to sign a long term lease.

For the last four years, a group of volunteers, the Music Co-op steering group, have been working tirelessly to get the Co-op back up and running. To be honest, it’s been a long and hard slog and extremely frustrating at times. Despite a lot of encouraging talk and genuine, positive support from many councillors, ultimately Council officers have not carried out the will of our elected representatives. And at times to be truthful, it’s felt that officers have made it very difficult for us to make progress.

Firstly, the repairs. We have absolutely no idea why these have not been carried out. This is a question we have been asking the council for some time but we haven’t got an answer. The repairs were deemed urgent back in 2018 and this was the reason for our eviction so we are all baffled as to why they weren’t carried out by the council as a matter of urgency. It doesn’t help that we’ve been kept completely in the dark about any repair work on the building. Council officers have not consulted us about any of the building work and have treated us merely as the tenant, who doesn’t need to know anything about the repairs.

Now onto the lease (and apologies if this is quite dry)…

As you know we’ve been asking for years and years for a long term lease on the building. When councillors granted us that wish 4 years ago, we thought it would be relatively straight forward. But unfortunately this hasn’t been the case and lease negotiations over the last four years have been long, drawn out and extremely frustrating. Officers maintained that we write a business plan before any lease was issued so that they were able to see what was an affordable rent to us. This was going to take some time but we set about working on putting it together. Luckily we had a great team of experienced volunteers to help us.

We agreed with the council that repairs could start on the building while we were putting our business plan together and agreeing lease terms.

In December 2020 the Council presented us with the Heads of Terms to a new lease agreement and “Deed of Surrender” on 1, Lodge Street. There was much in these documents that we weren’t happy with and we received legal advice not to sign them until we had negotiated on the terms, as what the council was proposing would see us lose the security on our current 35 year right to occupy lease, include the demolition of Room 3 in order to facilitate the Grand’s new foyer area and see us agree to a rental value of £50K p.a.

The rental value of the building became quite a contentious issue as we believed that £50K p.a was vastly inflated. However, we weren’t to be expected to pay the full amount. Instead, a service level agreement would be put in place to offset the rent.

This “Service Level Agreement” was quite a grey area. The principle was the Music Co-op would agree to provide certain services to the community in return for a reduction in the agreed rent. However, there was no detail within the service level agreement. And our solicitor was concerned that without seeing the details of the service level agreement we had no idea what we were signing ourselves up for. Also, if the SLA was removed or reduced we would still be liable for the full amount of the £50K rental value.

However, it was made clear that if we did not agree to these Heads of Terms, by the end of that month, repair work would not start on the building in January 2021.

We were desperate for things to get moving and while the steering group was extremely cautious about signing away our right to occupy the building with so much lack of clarity, we agreed to take a leap of faith and after some negotiation, agreed to the Heads of Terms so that the repairs could go ahead, with the rental valuation and Service Level Agreement to be agreed at a later date.

However, January came and went and no repairs were carried out. The months rolled by and although we asked the council what was going on and why nothing was happening with the Co-op building, we were never given an answer. We still don’t know why the repairs did not commence in Jan 2021. And we would still like to know.

In the meantime we sought an independent valuation on rental value of the Co-op which came in at a rental figure of £35K if the building was fully repaired and operational. We used this figure to attempt to negotiate with the council. However, officers refused to acknowledge the professional independent valuation we had paid for.

In June 2021 we received an urgent message from the council which declared the building dangerous and that we should close until repair work was carried out. We were asked to immediately enter into the Deed of Surrender, vacate the building and hand over the keys to the council. We were reluctant to agree to the Deed of Surrender for various legal reasons, so instead we agreed to vacate the property without it constituting a surrender of our tenancy. We moved out of the Music Co-op building in July 2021. We cleared the place out. We were hoping repairs to the building would be carried out soon after but again this never happened.

In October 2021, we signed the official agreement to lease and deed of surrender, again hoping this would spur on repairs.

Fast forward to June 2022 and we received the bombshell that the council now could no longer afford to repair the building. Originally, £486,450 was set out in the council’s budget to carry out the repair work. However, because the council left it so long to carry out the repairs, spiralling post covid construction costs meant that the repair costs came in at £970K in April 2022. This figure was further revised to £1.2 million in June 2022.

We met with the council in July last year to discuss our options. They suggested the Music Co-op operated out of shipping containers. I’m sure you can imagine our response to this. We sought legal advice and were told legally we are in a very strong position, as the council were now contractually obliged to repair the building.

So we’re currently trying to work with the council to find a positive way through this. And we’re now looking at an asset transfer where the Music Co-op would be given the building on a long term lease of around 100 years for a small peppercorn rent with no service level agreement. The Council would give us a dowry towards carrying out the repairs and this would be the money they had budgeted to carry out the initial repairs. It’s around £422K. The reason being, is they have already spent some of the money on slate for the roof which has been ordered and paid for and will be able to be used by us in the repairs. So we have £422K and some slate.

In November 2022, a funding sub committee of the steering group set to work on a massive £300K funding bid from the Community Ownership Fund which helps organisations restore community buildings which would otherwise have to close. This bid took months of work together. We were aided by Lancaster City Council who provided all the relevant information to give us the best chance of success.

We’re absolutely thrilled to have just received news that our application has been successful and we’ve been awarded £250K to carry out the repairs, with a further £50K to project manage the massive task of getting the Co-op back up and running.

So along with the council’s dowry and the money from the Community Ownership Fund, we have a budget of £672K to carry out the repairs.

There’s still a shortfall though to carry out the repairs and we desperately need more money from the Council to make the project work. We have been quoted £700K just to to make the building watertight (with no windows or doors and no internal re-fit.) Or we need council planners to work with us so we are able to carry out the repairs at a massively reduced budget. Or both. We’re meeting with the planning team on March 24th 2023… so watch this space!

There is also possibly funds available from the Heritage Action Zone led by Lancaster City Council which provides funding to help sympathetically restore heritage buildings in the Millrace area of Lancaster. We have been asking for funding from them since the fund opened in June 2021. But unfortunately haven’t been able to make any progress. This is very disappointing. The fund runs out in March 2024 so we really hope there is money left in this pot to put towards repairing the Music Co-op building.

We’re happy to report that what with the new situation with an asset transfer, our solicitor has this week received a new lease agreement on completely different terms. This would be a totally different situation with us taking on a long term lease for 99 years at a peppercorn rent with no service level agreement.

So things are looking increasingly positive at the moment and we are trying our best to work with the council, develop positive relationships and navigate our way through what has been a very difficult situation. We really need to find solutions.

So what are the positives?

Well the great news at the moment is our successful £300K funding bid from the Community Ownership Fund. We also have a strong group of volunteers working hard to secure the Co-op’s future. We have a great looking and well put together business plan. We have a new constitution and we are now set up as a members Co-op, which means the Co-op belongs to its users and that opens up various possibilities for us in the future, we’ve re-branded and have a brand new website.

We’ve just now got to navigate the path of actually getting on with the repairs to the building and getting our vital service back up and running again!

Watch this space!

Thanks so much for your continued support. If you feel you have the skills and the time to help us in our journey to bringing the Co-op back please get in touch info@lancastermusiccoop.co.uk