Agenda item

Report of the Executive Director – Regeneration, Economy and Assets

Further to Minute No. 16 of 25 May 2023, the Cabinet considered the report of the Executive Director – Regeneration, Economy and Assets indicating that the Enterprise Arcade was being delivered and funded as a capital project within the Southport Town Deal Programme. The Enterprise Arcade would provide a co-working and collaborative workspace for creative and digital businesses in Southport with a mix of accommodation comprising a collaborative Ground Floor Food and Drink based offer; a co-working / hot desk and start-up space on the first floor; three ‘grow on’ offices on the second floor; and a large single office on the third floor identified as suitable for an ‘anchor tenant’ for the project.

The report indicated that in May 2023 the Cabinet had agreed to a recommendation to adopt direct responsibility for management of the facility, on the basis that a future report would be presented on the operational Business Plan for the building. The report now provided a summary of the Business Plan, as physical works on the project progressed towards completion early in 2025.

Cabinet Members welcomed the project.

Decisions Made:

That

(1)           the Business Plan Profit and Loss Statement of Operation based on the Council taking a direct role in the management of the Enterprise Arcade be noted; and

(2)           the fact that existing budgets will be utilised to allow the project to become operational and deliver the commitments to outputs set out in the Southport Town Deal, be noted.

Reasons for the Decisions:

The Enterprise Arcade was delivering an important element of the Southport Town Deal that sought to increase the sector representation of Creative and Digital businesses in Southport and across the Borough as a whole. In this way Enterprise Arcade would provide a focus for the sector, a hub for collaboration and a base for skills and learning development in a work-based environment. In addition, it would help diversify the town centre and local economy.

The business Profit and Loss statement of operation would continue to exist as a live operating model, would be monitored and managed in a positive and proactive manner to ensure the best possible outcome (financially, economically and socially) for the Council, the Borough, and those businesses and individuals engaged in the provision of the dedicated digital and creative work space.

Next steps for the project involved ongoing dialogue with prospective tenants and marketing of the facility to the market. Further refinement of the operational cost associated with the facility would be undertaken to refine estimated figures.

Alternative Options Considered and Rejected:

i)               Commercial Lease to Digital and Creative Operator - The original intention with the project was to lease the entire building and associated operation to an external provider. The tender for an external provider was not successful due to a number of reasons including a limited number of operators in this specialist area and changes within the market. The Council was unable to identify a suitable operator and consequently agreed to operate the facility direct, in the short term, to ensure the facility could open on completion. The Council would however, continue to explore a partner to work with so the building could operate in the original manner envisaged, but this might not be necessary for the successful operation of the asset and the opportunity.

ii)             Keep in Council Use - An alternative approach could be for the Council not to progress with letting out the space in the building. This could result in the risk of clawback from the funders as the project was not delivered as intended, reputational risk and a reduced town centre regeneration impact.

iii)            Lease to a non-digital/creative 3^rd Party or sell the building on completion This would result in non-compliance of the Town Deal grant and could result in grant clawback. Depending on the use, town centre diversification and growth of the local economy might not result.