Shopping centre purchase defended by council

Senior figures at Herefordshire Council have defended the decision to buy Maylords shopping centre in Hereford for more than £4 million in June last year.

Herefordshire Council leader David Hitchiner told the council’s scrutiny committee, which was probing what the council had done and planned to with the centre, that there was “no risk whatsoever” from taking it over.

“We could have been heavily criticised for not doing the deal,” he said. “We had to make a decision extremely rapidly. We had an extraordinary opportunity and had we not gone ahead with it, I would have been ashamed.”

For the committee, Coun Louis Stark said: “I’m not clear that the decision (to buy the centre) allowed for all the consequences. We may have got there by luck rather than design,” while Coun Tracy Bowes asked: “Can you confirm it’s not costing us money?”

Cabinet member for procurement and assets Coun Gemma Davies said the questions “make it sound like buying the centre was a punt”, but that a full analysis had been carried out.

Chief finance officer Andrew Lovegrove confirmed: “We rely on third-party assurance the valuation is reasonable. It’s paying its way, it’s an investment asset. I was very comfortable it was an appropriate use of council money.”

Council figures show the rent and service charge arrears for the centre, now branded simply as Maylord, stood at £475,000 at the end last month.

“The rent recovery is better than a lot of other centres nationally,” the council’s strategic property services manager Andy Husband said.

“Five tenants have renewed their leases, 11 units are currently vacant but two of those are under discussion with prospective tenants,” he said.

The council’s original decision was justified as “providing the opportunity to develop it in line with the county plan priorities to enable economic growth”.

Coun Davies said: “We didn’t buy Maylord to make a massive profit or to compete against online or the high street.

“The priority for the centre is culture, which punches well above weight in the income it provides to a city, and encourages people to move to the area, and those already here to stay.”

Three months ago, Hereford was promised £22.4m from the Government’s Towns Fund for plans that include turning part of the centre into a library, learning centre, “digital culture hub” and performance space.

Coun Barry Durkin of the scrutiny committee asked what would have happened had this bid, which was not foreseen at the time of purchase, been unsuccessful.

Coun Hitchiner said it only strengthened the case for the purchase.

“By acquiring this site, we have been able to work with the Towns Fund Board without having a third party looking for profit from it,” he said.

Meanwhile, the Department for Work and Pensions (DWP) earlier this month opened a JobCentre in the centre’s former Sports Direct unit.

Coun Davies added: “Because the DWP have committed about £1 million to the area, we have guaranteed income which allows us to offer reduced rents to first-time businesses, arts and community groups.”

A report prepared for the scrutiny meeting said the proposed Towns Fund projects were “complementary” to the JobCentre development – despite the bid document showing the proposed new library where the JobCentre now is.

A council spokesperson said: “Several possible options for the location of the proposed new library within the centre are being explored.”