There has been yet more bad news for the beleaguered team of officers and the Commissioners trying to put right Liverpool Council’s flawed processes and dire finances. Yet more losses have crystallised literally under their noses in the Ground Floor of the Cunard Building!
The problems have arisen because of rash decisions taken in the anarchic times of Joe Anderson and Nick Kavanagh. Basically, they were persuaded that a great new attraction would come to Liverpool and would be ideally situated in the Upper Ground Floor of the Cunard Building facing the Pier Head.
This is the best place in the Cunard for a commercial venture with literally thousands of people a day going past it in the Summer months although less during the 4 winter months. So, what could go wrong? Almost everything it would appear!
Basically, the problems have arisen because not enough people have come through the doors. It’s just the same as any other business really. I have been in it several times and there was nothing to interest me in it. That’s no problem I am not interested in pop music and its history, but I know that many people are. I found it technically interesting but somehow it seemed to be lost between an idea of being an education facility and museum and being a pop venue in its own right.
This is yet another example of Liverpool City Council being unable to manage its own affairs. Including the original input into the project in 2017 this programme has costs us at least £4 million in write offs.
However, the cost is greater than that because we are not taking any rental income from what should be the best commercial property at the Pier Head and could end up having to pay £3 million to put the property into a condition that it can be re-let to another organisation.
So, this project may have cost at least £350,000 per short term job created and a minimum of £200,000 per job created. The Council would have probably created more permanent jobs if Joe Anderson had stood at the top of the Cunard and chucked fivers away providing the wind was in the right direction!
We originally called in this Cabinet item in for a full review so that the long-suffering taxpayers of Liverpool can find out who took these decisions and ensure that they will not be repeated. However, we have since revised that to allow the service charge contract to be drawn up and signed so that we get at least some money in.
The Cabinet report on this, Tunstall Street and the Festival Gardens will now be sent to the Audit Committee where Cllr Kris Brown and his team can subject it to a line by line scrutiny because there is much that we yet do not know?
- What was the original projections for visitor numbers, rent for venue type activity and income from souvenirs and food?
- How were these projections calculated?
- Who approved them?
- What is the total amount given by the Council in initial grants for capital and revenue?
- What is the current rental value for the premises?
- How did a clause on end of lease restoration, a standard clause, get left out?
- Does the Council or anyone else have a charge over the assets of the charity?
- Will the premises go out to tender in 2024 with others able to compete for the prime space?
- What is the total amount of rent that will have been lost from the day that the place opened and the end of the lease period in 2024?
There are issues to be looked at on top of this which relate to the running of the Cunard as a whole. Liberal Democrat Councillors asked on numerous occasions for details of occupancy and rent rolls. We were assured that there was an 80% occupancy and that rent was coming in in line with normal commercial expectations i.e. occasionally late!
We do not now know what the occupancy rates and rent rolls have been for the period since 2015 when the Council moved in after many £millions of were spent in renovation. Remember the £30,000 taps? Not a bargain 7 years ago! How much capital has been spent to keep the building up to scratch and improve it?
The Council keeps saying that it is worth a lot more than it did when we bought it. In fact, £45 million has been quoted in comparison with the original £10 million. Much up that uplift is because the Council is assumed to be a triple A tenant for its occupation of the top 3 floors. We have no idea what its value would be on the open market if the Council moved out and paid rent elsewhere. Would another triple A tenant come along?
Yet another stone has been turned and underneath it is yet another expensive baleful frog. I do not know about you but I am beginning to lose track of the money that was wasted, lost or never invoiced in the reign of Joe Anderson. My last calculation is that it is now up to £160 million with another £16 million + lost because of decisions or lack of them during Joanne Anderson’s time.
Remember all this the next time Labour claim it is the fault of a coalition government which has not been in position since May 2015 that Liverpool has no money!!!
But what does Richard Kemp think? 