EC Meeting Papers March 2018

9 The estimated income from the new housing rental has increased because of local demand, but to be prudent in budgeting I have assumed £90k. (Please notes some estate agents’ estimates would take this to £130k per annum.) 10 The extended hotel budgeted annual income is £250k, but again given recent local market developments the Hotel General Manager estimates that this will be higher. But for the purposes of budgeting I have assumed the figure of £250k.

11 Our desired income from the site to balance our books effectively, is £355k per annum.

12 Taking the houses and hotel alone this could generate an income of £340k per annum which if all went well is not far short of our target figure and would substantially relieve the current position of spending from capital year by year.

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The running costs per annum of the GFTU functions are £400k.

14 We have had to consider very carefully whether or not to build the new building for which we had planning permission as a nursery.

15 We have considered a number of options. Obtaining planning permission to change the use of the building to a spa or suite of offices, or running it as a nursery with an external provider under a lease paying us a rent. 16 The spa option has been considered carefully and in terms of income generation appears to be the most lucrative with an estimated £83k a year being generated. However, this option would require a higher initial outlay for equipment and so on. 17 The office block option, perhaps with 4 good sized offices managed by a member of staff internally and professionally marketed could potentially generate £60k per annum on the basis of lower square footage rates. This would be an easy to manage option and potentially cause lower levels of traffic on site. Clarification on how the rates would be paid would be required. 18 The nursery option has been subject to considerable discussion. 4 companies expressed an interest in tendering for managing the nursery and paying us a rent. Only one of these expressions of interest was acceptable to us and meetings have been held with the company. There has been a full exploration of the issues with them over several meetings and email exchanges. This is how it would work: their company would completely furnish and equip the nursery. They would take staff on TUPE transfer. They would completely manage the nursery under a lease to pay us a rent of £40k per annum. This lease would be for 10 years with a rent review at 5 years and escape clause at five years. The rent for 5 years would be guaranteed by a signed personal guarantee. Extra revenue could potentially be generated by buy lunches and breakfasts for the children from the hotel. The detail of this is under discussion, but at this stage this looks as though it might be able to generate an additional £20k profit per annum. The robustness of a personal guarantee of rent for 5 years agreement has been submitted to our solicitors for consideration. Rental payment would be monthly in advance in any event.

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