Nottingham City Council has submitted a proposal to review its operation of Victoria Market to save estimated running costs of £39 million over the remaining 50 years of the current agreement.
The council rents the market space in the Victoria Center and provides a significant annual subsidy.
This is due to reduced revenues to cover the lessor’s service charge and other internal market operating costs. Any market-related proposal would have to be agreed upon by the owners of the Victoria Center, represented by the asset managers of the Global Mutual center.
The council has seen its main government grant fall from £127m to just £25m in the last decade, which, coupled with growing demand for its support for vulnerable adults and children and other pressures, has squeezed its budgets. It has set out a four-year financial plan, including the disposal of real estate assets, which seeks to save £38m to help put the council on a sustainable financial footing.
A range of alternative options for the future of the market includes:
- Continue with the current regime and pay the subsidy. The city council currently does not have the financial resources to continue with this option.
- Invest in market infrastructure and require merchants to pay full rent. This would also require significant investment by the Council to make the market viable in the long term, for which the Council currently does not have the necessary capital resources.
- Another entity that operates the market. This option is difficult to enforce as the lease is legally and financially onerous and unlikely to be taken over by a third party.
- An indoor market is being established at an alternative location operated by the City Council. Some work has been done to understand if this is feasible, there are currently no suitable buildings identified and it would require a significant new funding strategy.
In the opinion of the board, the options that have been considered are not feasible from a financial or legal point of view. Therefore, discussions have been held with the owner’s representatives on the principle of the council abandoning the lease. However, before making a final decision, the council is consulting with all stakeholders, customers and the general public for their views on the future of the market and how it affects them.
Any representation received as part of the six-week consultation will be materially considered by the council in reaching a final decision.
The consultation begins on Monday, April 25.
In addition to the significant cost of subsidizing Victoria Market, the council estimates that substantial funding would need to be invested for immediate upgrades, as well as longer-term improvements to help it operate effectively, meaning the full cost of keeping the market running for the rest. of the lease is expected to exceed £39 million.
Victoria Market has been operating from its current site since 1971, and despite municipal investment in the market in recent years, it has not performed well and is less than half occupied.
In 2015 the previous owners intu raised service charges for the market to the same level as other retail units in the mall and it was also severely affected by the Covid pandemic, despite the council providing support to merchants to through government subsidies to reduce and distribute the cost of rent.
Acting Portfolio Holder Cllr Linda Woodings said: “In its heyday Victoria Market was a popular and busy market but sadly, while the small number of customers who still use it have great affection for it, it has been underused. during years.
“Increasing service charges by previous intu owners, bringing the market in line with other retailers, meant the council had to subsidize their operation for many years, making it a financial liability for us, a situation that Covid got severely worse. affecting the income of the merchants. The kind of investment that would be needed is something we simply cannot afford when our budgets are squeezed by other demands and reduced government revenue.”
Any proposed changes to current arrangements would require the cooperation of merchants as well as mall owners, but any final decisions on the future of the market would be subject to consideration of input gathered as part of the six-week consultation. process. People can participate in the consultation here: https://www.nottinghamcity.