A further £1.7million could be added to the bill for the new Lichfield cinema development in order to fund a deal to bring a new food and drink business to the city.
Lichfield District Council has already agreed to pump more than £5million into launching the joint venture with Evolve Estates, owner of the Three Spires shopping centre, to transform the former Debenhams unit.
The local authority then also agreed a deal to buy out their partner within two years of its opening – with the figure expected to be in the region of £3.5million.
A report by deputy leader Cllr Andy Smith to the council’s overview and scrutiny committee next month has confirmed that more cash will now be needed to make the development – now branded as the Three Spires Quarter – a reality.
It said that the as yet unnamed food and drink anchor tenant was a national company that was “well-recognised as a high-quality brand throughout the UK”.
But in order to bring the business to the city alongside the Everyman-operated cinema, Cllr Smith said the money would need to come from council rather than private coffers.
“Capital contributions on schemes like this, with the type of brands we are seeking to attract are quite normal, as evidenced by the other council’s we have spoken to about the anchor food and beverage tenant.
“Discussion has been held with our partners, Evolve Estates about the contribution needed for this deal to proceed.
“In December 2023, council considered and approved a recommendation from cabinet following a request from Evolve Estates that a buy-out clause be included into the agreement. This inclusion enables Evolve Estates to divest themselves of their shareholding two years after practical completion of the development.
“For that reason only, Evolve Estates has said it would not be willing to fund any part of the capital contribution proposed by the tenant.
“Therefore, if a capital contribution is to be made it will fall entirely on the council to make it. A contribution of this scale does not form part of the approved budget for this project.”
Cllr Andy Smith
The overview and scrutiny committee will discuss the £1.7million required to secure the agreement of the food and beverage outlet – to cover costs on developing the unit and possible rent-free incentives – to move to the city centre.
Cllr Smith’s report says cash to foot the bill could come from the proceeds of the sale of land for residential development on the former Tempest Ford site.
“At present, there are no uncommitted resources available to provide funding for the £1.7million capital contribution. However, the council does have some options available to improve the payback period.
“The council is currently marketing an element of the Birmingham Road Site. In the event this capital receipt is more than the capital contribution, £1.7million could be used for funding. The estimate of capital receipts from this area of the site provided by the council’s property advisors is between £4million and £5million.
“If the council does not use this capital receipt for funding, and maintains the approved risk ‘headroom’, then to ensure the funding gap does not increase, budgetary savings would need to be identified to offset the capital financing costs.”
Cllr Andy Smith
“Halo effect”
The report said the spending the money to attract the unnamed tenant would create a ‘halo effect’ whereby other companies would also seek to take up units nearby.
It added that the deal with cinema operator Everyman meant the council was also required to bring in one food and beverage business from a shortlist of eight alongside them.
Cllr Smith’s report added
“This anchor tenant brand attracts other food and beverage and leisure providers to a location. Their interest in coming to Lichfield has already led to other outfits making contact about space in the venue alongside them.
“This is no doubt why the partnership is so advanced with the letting process for other units and the interest the site has generated, with minimum marketing needed.
“As with the imperative to be able to draw other providers to the site, equally important of course – both for the site and for the vibrancy of the city centre as a whole – is our ability to draw people to Lichfield from both inside the district, the county and broader region.
“A brand like this anchor tenant will support this aspiration far more than an unknown, regional operator could.
“The experience of other towns and cities is that having this tenant located with them draws visitors from far and wide, which can only benefit the wider city economy.”
Cllr Andy Smith
The report will be discussed at the overview and scrutiny committee meeting on 3rd April.
More money down the cinema drain, how much more is it going to cost us
Here we go its not got a brick in place and its going to cost another £1.7 million. What a complete and utter waste of money. Just pluck any number out of the air and Lichfield will spend it.
Disgusting..
A secret partner that has to be bribed to come. Typical council isn’t it. Not our money but hey ho who cares
Perhaps Jane Austen had this in mind when she wrote, “It is particularly incumbent on those who never change their opinion, to be secure of judging properly at first.” “May I ask to what these questions tend?” “Merely to the illustration of your character,” said she, endeavouring to shake off her gravity. “I am trying to make it out.”
They need to find the money and push this through. I know the identity of this proposed anchor tenant and it will be a game changer for Lichfield. This is a one-off opportunity to put our city on the map and will lead to higher footfall and more businesses wanting to move here. It will all have a positive knock-on effect. LDC need to approve this and get started! We have too many units vacant as it is!
So as part of this sorry package the Friasgate site would be sold off for residential use.
This was no part of any proposal since this ill stared scheme was started more than a decade ago. It would represent a betrayal to the citizens of Lichfield who have been assured many times that the site would have public use.
The council should be answerable for this breach of good faith. It is surely the lowest point of local politics.
What is the point ???? Another white elephant. Please ask all the people in Lichfield before the next election if they would use it. Older people are comfortable at home. Been there done that. Younger people won’t be able to afford the price. What a waste of council tax and tax payers well earned money. My opinion am I wrong.
Oh dear they are getting carried away again.
All we wanted was a cinema.
Didn’t have to be too grand.
They can’t stop spending now.
Shame the council are chasing this idea that likely will cost one cinema – Tamworth or Red Carpet – to close. We shouldn’t be competing against eachother. Could have thought of imaginative and cheaper way forward. And the Friars gate land would have been perfect for a leisure centre with true public access. Nothing is joined up
Can’t think who this anchor tenant might be. Probably a charity shop cafe.
Well, we didn’t see that coming…………………………did we?
It seems these major issues only come to be discussed by councillors at a very advanced stage. That is not effective or proper scrutiny. Why does a major issue like this only get to the public domain when it is too late? The choice seems to be pay the money, or refuse and probably see the whole scheme collapse. That is not a great way to do business and it certainly isn’t a great way to deal with public money. Even worse, why does this need new money added to the budget? Has LDC heard of due diligence? This should have been known about before the initial deal was agreed. What other obligations does LDC need to meet on top of this extra £1.7m?
Like lambs to the slaughter, councillors blundering on with public money. If the project was commercially viable in the medium or long-term it would not be necessary to continually pump public money into it. When the novelty factor and gloss wears off and the paint starts peeling who will be picking that bill up? The developers will be long gone.
Surprise? No it’s more money down the drain.
Perhaps like HS2, LDC has an open cheque book.
Is it possible Lichfield local Authority will join the likes of Birmingham, Nottingham etc… in Bankruptcy .
The Cost of the New Cinema is out of Control. Bit like HS2
Showing soon
Friarsgate 2: Big Trouble in Little Lichfield
So unless I’m mistaken the ‘anchor’ client, 5 Guys for example opens up and the tills ring for overpriced burgers for a while until we all get bored of it, say after 3 years and then the council get to pay £3.5m for a dead donkey? Sounds par for the course.
And how do the cinema ‘patrons’ get to it – with no evening buses? or put a £10 taxi fare on top of the ticket price? No- how about “The Cinema for car owners?”
Quelle surprise, they’ve been sold the fallen Madonna with the big boobies!
LDC are missing a very important point. The cinema is the anchor that should draw the food outlets. The scheme doesn’t need 2 outlets. £1.7m on top of a rent free period is a massive amount.
The only winner is Evolve who will draw new tenants to their scheme without taking any risk on the cinema.