Winter Gardens:

Ventnor Winter Gardens: A detailed analysis of where we’re at

Since former Cabinet member Cllr George Brown made the announcement in September 2010 that The Hambrough Group had been chosen as the preferred bidder for the purchase of the Ventnor Winter Gardens, there has been much debate about the future of the iconic cliff-top venue.

The Hambrough Group beat off competition from another commercial bid as well as a community bid, both of which intended to ensure the venue would be open and functioning the following summer.

As OnTheWight has previously reported, over two years after venue was closed by the council, it still remains unused, now subject to further lack of maintenance and vandalism.

Hambrough: “Concentrate on progressing with redevelopment”
On 5th June, a spokesperson for The Hambrough Group said,

The Hambrough Group now feel that they are in a good position with strong teams in their existing restaurants and hotel to continue to offer exciting food in a very special part of the country and will allow the Group to concentrate on progressing with redevelopment of the Ventnor Winter Gardens Project, incorporating a 34-bedroom hotel, food and beverage outlets and a 400 seat auditorium.

Later that week, the Hambrough Group confirmed they had not yet appointed contractors for the development of the venue, but hoped to announce news shortly.

Seven weeks later, we’ve asked the question again, but were told by a spokesperson for The Hambrough Group,

“I am not in the position of commenting at the moment. The information that has been provided by the council will be what is available at the moment. Sorry I am unable to give anything else at this stage.”

An analysis of the paperwork
OnTheWight have recently been looking back through the Isle of Wight council paperwork associated with the sale of the Winter Gardens.

Readers will remember that the deal between the Isle of Wight council and The Hambrough Group saw the former public building being sold for just £1.

The sale of the building was on condition of approved planning permission which after some revisions to the original plans, The Hambrough Group received in November 2012.

The contracts were exchanged the same month and the sale completed in mid-January 2013.

Valuation
Paperwork at the beginning of the tender process stated that the building had been given a valuation figure of £200,00 to £250,000. This valuation was based on the state of the building in Jan 2010.

Following a question posed by an OnTheWight reader we asked whether a new valuation had been obtained prior to exchange of contracts in November 2012.

A spokesperson for the council said,

“A new valuation was not sought once the planning permission was granted. The property was offered to the market and a price agreed subject to planning permission being granted.

“The bid price reflected the conditions which the council imposed on the sale and the cost to the purchaser of developing the building and complying with these conditions.”

What is “a reasonable time frame”?
In the Cabinet paper produced for the sale of the property (embedded below for your convenience), paragraph 18 lays out terms agreed by the Hambrough Group.

These included:

Secure community access to the auditorium for a period of ten years, including the provision of a box office service;

Provide the Council with an option to repurchase the facility should the proposed investment not proceed within a reasonable time frame.

We were interested to understand what the council constitutes as ‘a reasonable time frame’.

A spokesperson for the council replied,

“The document which transfers the freehold to the Hambrough Group provides that it must, ‘commence and substantially complete the development insofar as it relates to the building within 18 months of the date of the transfer’.

“If the refurbishment and development of the Winter Gardens is not substantially completed within that time the council has an option agreement to buy the property back for the greater of £1 or an amount agreed reflecting the investment made by the purchaser.”

If you’re wondering how the council qualified the term “substantially complete the development” a spokesperson for the council explained this meant,

The development of the scheme as presented to, evaluated by and accepted by the council.

Cost of buying back the Winter Gardens
If the council were to take up the option to buy back the building (as mentioned in paragraph 42 of the Cabinet paper), as stated above, the cost to the council would not simply be the £1 the building was sold for.

It would include an “amount agreed reflecting the investment made”.

We asked the council what this meant, they replied,

“costs of works to the building and design fees.”

OnTheWight understands from Cllr Stubbings that these fees, which include ground work surveys, are currently in excess of £200,000.

Due diligence?
Readers have asked on several occasions whether comprehensive due diligence (ie. finding out whether the funds committed to be spent were available) was carried out prior to the exchange of contracts in November 2012?

It had been pointed out by one reader that although sufficient funds may’ve been available at the point of winning the bid in 2010, it would be useful to know whether had the council checked that funds were still available to the developer?

A spokesperson for the IWC told OnTheWight,

“The purchaser’s finances were checked.”

The council went on to confirm that documentary evidence of this remains on file.

Community use
Readers will remember that when the council invited bids for the purchase of the Winter Gardens, one of the conditions attached to the sale was that there should be continued public use of the auditorium.

The extract from the invitation to tender stated,

The council would expect any proposal to provide for some continued community use of the building as a theatre/hire venue.

Community use re-negotiated
The Hambrough Group were successful during negotiations with the council to have this reduced to just ten years rather than in perpetuity.

However, the council confirmed in May 2013 they are currently discussing an extension to the ten year period.

OnTheWight asked, “When does the clock start ticking on the ten years of community use?”

A spokesperson for the council said,

“The building currently has planning permission for use as a hotel, restaurant, bar and auditorium all of which will be available for public use indefinitely. Any change from these uses will require new planning permission.

“The ‘community use’ as defined in the lease relates to specific hire of the auditorium and the current stipulation remains in force until January 2023 (ten years after the deal was completed) though we are discussing an extension to this date.”

Hambrough Group bid
We did ask to see a copy of the bidding proposal presented by The Hambrough Group – you’ll remember we published bids by both the Winter Gardens Trust and the Winter Gardens Ltd with their permission.

The council replied,

“All bids were submitted on a confidential basis and we cannot release such information without first liaising with the purchaser. We will contact the purchaser and ask if it is happy for it to be released.”

We’re not sure whether the council contacted the purchaser, Kevin Sussmilch, to request permission to release his proposal, but we’ve been waiting since 22 May for an update.

What is the Isle of Wight council doing?
When we asked back in May 2013 what the Isle of Wight council are doing to ensure action is taken, Councillor Jonathan Gilbey, cabinet member for resources, said:

“We are keen to see the Winter Gardens brought back into use by the new owner as quickly as possible. I would like to reassure residents that we are monitoring the situation closely to ensure all the necessary steps are being taken by the owner to progress this important development in the heart of Ventnor.”

We have further posed questions to the senior council officer closely involved with the sale of the venue on the subject of penalties and are awaiting a response. We’ll post them here once we receive them.