Agenda item

Update report of the General Manager, Alexandra Palace  - To advise the Committee on progress.

The Chair asked for a brief introduction.

The General Manager – Mr Loudfoot advised that since the last meeting of the Committee there had been little progress in forwarding the development project. It had been agreed that should any significant progress be made before the next scheduled meeting then a special meeting of the Consultative Committee would be called to discuss the progress. It had not been necessary to call this meeting. Mr Loudfoot further commented that at this point in time it was still the case that insufficient progress had been made to be able to offer any meaningful report on negotiations. 

In response to a number of points of clarification and concerns at the lack of progress thus far Mr Loudfoot advised that he fully appreciated the frustrations expressed at the lack of progress and that in terms of the Firoka bid it was the case that the Board were still in negotiations with Firoka and they were still the Board’s chosen preferred bidder, and a holistic development and approach was still the aim of Board. The Board were conscious of the fact that the local community was hanging on to the fact that there had been a deal struck with the Firoka Group and that in this respect the local community needed to know what the latest position was. 

With regard to points of clarification in terms of timescales for further consultation by the Charity Commission and finalising the contract Mr Loudfoot advised that it was difficult to put a time frame and that he did not feel that he could speculate. In terms of the Charity Commission undertaking further consultation this was as yet not confirmed.  Whilst stressing that that the consultation was the Charity Commission’s and not the Board’s it was likely that the Board would be asked to comment on the process for its views. Dependent on the outcome of the consultation and the subsequent consideration and agreement of the Board, and any possible Judicial Reviews arsing therefrom it was likely that it would be at least 12 months before there could be a conclusion. It was also the case that the Board would not re-open any negotiations with the Firoka Group and the current development brief would remain unchanged.

Mr O’Callaghan commented on the judgement of the judicial review which had technically centred on the consultation process embarked upon by the Charity Commission, and yet it could have also commented on the contents of the proposed lease, but had not.  Given that there was likely to be a further consultation there was time to take steps to ensure that, as a matter of principal, to ensure that the elements of concern in relation to the lease and its contents, were made readily available during the consultation process.  Mr O’Callaghan also referred to the objects of the Charity and the issue of the accounts which showed no proceeds during the time that Firoka were in the palace, and the issue of £3million held by the Firoka group which was rightfully the Trust’s he commented that no charitable activity had happened during the time Firoka were in the building.  In stating that it had been a bad idea to proceed with the Firoka bid, Mr O’Callaghan further commented on the issue of T.V studios and it being leased at a not for profit level.

Ms Paley commented on an number issues raised by stating that if people thought that it was realistically possible to engage with another developer then this view was much mistaken as it was the case that there would be no other developer coming forward. As the Committee were aware it was a fact that the Board had undergone a considerable process of identifying a preferred developer with little interest, other than the Firoka Group and 2 other bidders. After rigorous assessment the Firoka Group had been chosen and it was a fact that the Firoka Group would have the necessary financial standing to take on the lease and refurbish and repair the Palace.

In response to a number of the comments expressed the Chair advised that in terms of the development brief and the information contained in the draft lease it was the case that some of the information contained therein was legally commercially sensitive nature and therefore would not be disclosed publicly.  It was also the case that the palace was operational during the period that the Firoka Group was present at the palace and the bar and cafes and other public facilities/exhibitions had remained opened and functional.

In response to further comments of Mr O’Callaghan as to the issue of a holistic approach and whether this was a viable solution, and therefore should be revisited, and also the articles and information contained on the web on wikipedia in relation to Mr Kassam of the Firoka Group showed that the Firoka organisation was not suitable

The chair responded that in terms of any information anywhere on the web i.e. on wikipedia or otherwise and also comments expressed regarding Mr Kassam here or otherwise he cautioned Members from making such comments and that it was dangerous to do so.

In response to further comments of Mr O’Callaghan in relation to if the current preferred bidder were to withdraw and a hotelier were to develop a hotel facility in the southwest wing of the palace and whether the profits would assist in the running costs of the palace Mr Loudfoot advised that in granting any form of lease or tenure to a hotelier the Trustees would only receive ground rent for the site and the hotelier would retain the profits.

Mr Hutchinson referred to the fact that in terms the actions of the Trustees and the objectives of the Charitable Trust it was evident that the maintenance and up-keep of the building was of a considerable enormity and that it was just not the case that funds coming from either events or sub leasing parts would cover the maintenance costs.  Whilst there was some negative view prevailing in terms of the Firoka bid it was a fact, as stated by Ms Paley that there was no other bidder and therefore the Trustees were attempting to broker the best deal possible for the future of the palace.

Mr Tarpey, in sharing the views of Ms Paley and Mr Hutchinson, commented that in terms of the fabric of the building – the costs on a day to day basis were considerable, and there were issues to face in terms of the Ice Rink and the fact that the ice generator was nearing the end of its use and would need replacement. The Firoka bid was the only possible source of capital investment and that the figures that the bid represented would restore the palace.  It was an obvious that no other bidder willing to or able to fund the costs of this required level of restoration.

In response to further points of clarification Mr Loudfoot advised that the Ice Rink represented about 20% of the usable area at the palace.  It was the case that whilst individual profit centres ( such as the ice rink ) generated  income that was in excess of direct expenditure, overall the entire operation of the palace ran at a loss and that to replace the floor of the Ice rink and replace the existing ice plant the costs would be in the region of £1 million.

Mr O’Callaghan further commented in terms the palace running at a surplus prior to 1965, and the requirements of the trustees to ensure that the palace was run within the auspices of the 1985 Act, and he stated that in his view he did not accept the concept of selling off the Palace, as embarked upon by the current trustees. There were other avenues that should be explored other than selling the Palace as a whole to one developer in a holistic development concept and that these had not been fully explored. 

Ms Paley commented that previously when the concept of hoteliers developing a hotel at the palace it was the case that on each occasion the financial assessment had shown that it would not be viable financially just to have a hotel. She added that whilst she was not particularly happy with the Firoka bid it was the only bid that came close to having the palace restored and maintained as required. Mr Boshier referred to comments in relation to the Palace being sold off to the Firoka Group, and in reference to the reports in the press – The Ham and High to sell off the palace, reminded the meeting that the palace was not being sold off, but that the Trust was entering into a lease with the proposed developer – Firoka –and this had always been the case.

The Chair thanked and concurred with the comments of Mr Boshier.

There being no further comments it was:

RESOLVED

That the report on the future of the asset be noted.