Sunday, 9 September 2012

Saving the Storey: The Case for a Creative Hub

Lancaster City Council meets later this week to discuss the future of a number of key sites in the City, including the Storey Creative Industries Centre - and tennants are urging it should continue to operate, offering detailed and powerful arguments in favour of the option.

They also point out that changing its use could also expose the Council to a number of demands for a return of monies provided by the European Union and other bodies in the first place - which could have wider impact on Council services.

The fate of the building was thrown into the air after the company that ran it, Storey Creative Industries Centre Limited, went into liquidation after protracted financial difficulties.

The Council will be discussing the future of the Centre on Wednesday, and a report from its Chief Executive favours the redevelopment of the Storey to complement future redevelopment of Lancaster Castle.

Other options up for consideration are that Council should seek to continue operating the building as a Creative Industries Centre - favoured by its tennants - or sell the building, winding up the creative industries centre, obtaining vacant possession, giving sub-tenants appropriate time to relocate, and addressing all clawback and restrictive covenant matters - all of which could prove protracted and expensive despite the potential value of the building.

The report also urges Council to investigate the removal of the restrictive covenant to give the building as wider use as possible - no matter what course is decided n Wednesday. Currently, the covenant bequeathing the Storey to the City includes conditions in favour of it being used to promote creative industries and the arts - which is why it includes, for example, gallery space.

Removing the covenant would enable the Council to have the option to sell off the building, which could mean it would be converted for another use.

Despite the current status of the Storey, it could form a vital part of the City's future development, particularly given the opportunities any new use of Lancaster Castle may offer, the report suggests.

The report notes that "strategically, the building could make a significantly larger contribution to the Council’s regeneration priorities than it has in recent times and it could work in financial terms. In order to achieve this, however, it is not necessary for the building to remain as a Creative Industries Centre or stay under the Council’s control - the private and other sectors could have a role."

Keeping the Creative Hub: The Tennants' View

The business tenants and creative enterprises based at The Storey have commended the Councillors for their decision to create a viable creative industries centre for Lancaster.

"It was the right decision five years ago, and it is the right decision now," they say in a joint statement sent to every councillor.

"For that reason, we urge Councillors to recommend Option 1 in the Council's report on future uses of the Storey Institute; namely, for it to continue operating as a creative industries centre.

"The creative industries constitute one of the fastest-growing sectors in the UK economy, and those based at the Storey constitute a high-growth, high-value economic driver that brings money into Lancaster from across the UK and overseas.

"The Council report rightfully recognises that the failure of SCIC Ltd does not undermine the viability of a creative industries centre moving forward. In fact, the only failing business here is the leaseholder - and that obstacle to progress is now being removed by the appointment of the liquidator.

"According to the CBI, 'The creative industries - ranging from advertising to architecture and fashion to film - contribute 6% of GDP, employ over two million people and export over £16bn annually. If the UK is to achieve a balanced, high-growth economy, it is vital that the key strengths of businesses in the creative sector are nurtured and championed by government.'

"The Storey creative hub has established productive links between Lancaster University, with its wealth of academic, research and business knowledge, and the City itself. Such relationships are proven to generate employment and increase graduate retention.

"It is important to note that the Storey hub is perfectly financially viable if properly managed. Similar creative hubs, such as the Watermark in Preston, Woodend Creative in Scarborough and the Sharp Project in Manchester, are positively thriving. The Storey had almost full occupancy before the leaseholder's mismanagement drove businesses away."

Having reviewed SCIC Ltd's accounts and practices, the Storey's tenants have identified numerous cost savings, procedural efficiencies and income-generating opportunities which would enable the creative industries centre to prosper.

"We have a wealth of relevant business experience and a commitment to making the Storey project succeed," they say.

"To that end we have already taken the steps necessary to keep the building open during the transition period, assuming responsibility for vital utilities, health and safety and insurance - in some cases, at significant cost and inconvenience to ourselves. While this should be viewed purely as a temporary stopgap measure, it underlines our commitment to the Storey and has illuminated the issues involved in making it a viable, financially self-sustaining enterprise.

"All it requires is vision, will and competence."

The tennants are wary of allowing the Storey's future to be determined solely by the Duchy's eventual plans for the Castle, as suggested by Option 3 in the Council's report. This could, they argue, have severe negative consequences for resident businesses, and could incur long-term financial and reputational fallout for Lancaster City Council.

"The Council would risk clawback of over £3 million in funding from such cash-strapped bodies as the EU and Arts Council England if the Storey does not remain dedicated to its stated purpose as a creative hub," they point out.

"Similarly, over €200,000 of European PROUD funding depends upon the Storey remaining a creative industries centre. Losing this would set back Lancaster's regeneration and economic development, and could well damage relations with Lancaster University. "

Successful companies being thrown out of a Council-owned building would, they also argue, be a chilling indictment of Lancaster's viability - or lack thereof - as a place to do business.

"It should also be noted that the Storey remaining a creative hub would not in any way jeopardise future plans for the Lancaster Castle development. With the gallery, bar, restaurant - and, ideally, the Visitor Information Centre - so close to the railway station and Castle, the Storey would only add to Lancaster's visitor offer.

"Thomas Storey bequeathed the building to the people of Lancaster in 1891. If the protective Covenant is revoked, the building would be exposed to the risk of redevelopment by private buyers, and Lancaster could lose a major landmark and valuable resource - including the City's only dedicated gallery. Nobody wants to see this beautiful Grade II listed building lost to the public.

"We therefore urge Councillors to stand by their original commitment to a vibrant creative industries hub for Lancaster... We would welcome a positive, productive, forward-thinking exploration of the many viable options for the future of the Storey that will generate numerous economic benefits for Lancaster’s wider economy.

"The UK boasts the biggest creative industries sector in Europe. Is Lancaster open for business?"

What About That Covenant?

The advice from the Council's legal team in the report regarding the restrictive covenant notes suggests it might find itself caught up in quite a legal battle if Council tried to remove it and sell off the building.

"The Court upon application can discharge or modify a restrictive covenant," the report notes. "Under the legislation a covenant is obsolete, and will be removed where it is no longer possible for it to serve its original purpose, by changes in the character of the property, or the neighbourhood, or other circumstances of the case which the court may deem material.

"The particular nature of the transfer of the Storey to Council would suggest that the land is held under the terms of a charitable trust and Counsel’s opinion obtained some years ago advised that the trust cannot be dissolved and must be followed, unless there are grounds for applying for a cy –pres scheme as set out in section13 of the Charities Act 1993. (A cy- pres scheme is created when the benefit of the trust are transferred to another property and releasing the incumbent property from the trust).

"In these circumstances the process for removing the covenant are complex and would require specialist legal advice to establish whether such an application would succeed for the purposes of the Council’s proposals."

Whatever the outcome of the meeting - which at this stage seems in part to be looking at a decision which opens the way for further discussion and investigation - the building's future as a Creative Industries Hub would appear to hang in the balance.

- View the Council Report on the Storey (Item 13 on the agenda for the meeting)


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