Content

9.1

This paper sets out a proposal
to review the service charge recharged to traders at Crystal Peaks
Marketplace. The Council are tenants of the Crystal Peaks market
under a Lease made between Albany Courtyard Investments Limited and
the Council which was commenced on 29th July 2005
(“the Superior Lease”). The Superior Lease provided
that the Council’s landlord could recover a service charge
from the Council for certain services that the provision of is
managed by the landlord’s agent Workman LLP. Although the
under leases made by the Council with market traders allows for
this service charge to be recovered by the Council from the market
traders there has not been an increase passed on to traders in
several years. This is despite the operational cost of the market
increasing substantially. There has also been increases to the
Service Charge paid by Sheffield Council to Workman LLP that has
never been passed on to the Traders within the
Marketplace.
 
This report therefore sets-out
the impact of under-recovery and proposes options in relation to
service charges going forward

 

 

9.2

RESOLVED:

 

 

9.2.1

That the Waste and Street Scene
Policy Committee approves an increase to the service charge
currently charged to market traders of CPI+8% (an increase of
14.8%).
 
(NOTE: Councillors Sue Alston,
Mike Chaplin, Tony Damms, Tim Huggan, Mark Jones, Joe Otten and
Sioned-Mair Richards requested that their votes for recommendation
be recorded.
 
Councillors Alexi Dimond and
Maroof Raouf requested that their votes against the recommendation
be recorded.)

 

 

9.2.2

That the Waste and Street Scene
Policy Committee agrees a period of 12 weeks from the decision
being taken to the implementation of the new service
charge.

 

 

9.2.3

That the Waste and Street Scene
Policy Committee agrees that a review should take place annually
for officers to make proposals to the Committee for moving towards
full cost recovery or if necessary, proposals will be brought to
reduce the service charge.

 

 

9.3

Reasons for Decision

 

 

9.3.1

The option outlined in scenario
5 (CPI+8%) provides a reasonable increase to the service charge
that enables the Council to move towards full cost recovery whilst
allowing time to assess the impact of the increase on traders,
given that the service charge has not been increased in a number of
years.

 

 

9.3.2

The overall outcome should be a
more sustainable market, maintaining its quality and service
levels, and a high occupancy rate to continue the vibrant feel to
the markets post pandemic.

 

 

9.4

Alternatives Considered and Rejected

 

 

9.4.1

The option to do nothing
(scenario 1) has been rejected by officers due to the unsustainable
nature of the increasing subsidy required on operational
costs.

 

 

9.4.2

The option to move straight to full cost
recovery (scenario 9) will be too much of an impact on the tenants.
It’s likely to create significant cost pressures that are too
large to pass straight on to customers and may increase the markets
vacancy rate, which will negatively financially impact the budgets
for service charges and rents. Overall, it could undermine the
financial position rather than improve it.

 

 

9.4.3

Other models of recharging the service charge
such as a service charge only tenancy agreement are options that
require further work that has not been possible to complete in time
to consider for this paper.