A Brief History of Stratford-On-Avon District Council S Involvement with the Greig Site

Appendix 1 A Brief History of Stratford-on-Avon District Council’s Involvement with the Greig Site

1.1 The Trustees of the Hannah Susan Greig Memorial Trust (Trust) have operated in Alcester for approximately 60 years. It has historically operated the Greig Hall and associated outbuildings, a sports centre and tennis courts. 1.2 The site comprises 3.4 acres and incorporates a number of individual buildings including:-  The Greig Hall - this facility is closed and comprises a main hall/bar including a stage and two further function rooms with bar/kitchen facilities.  The Lifestyles Building - this is currently open and comprises a sports hall (4 badminton court size), 48 station gym, dance studio and Treatment/Physiotherapy room.  Squash Courts – 2 courts which whilst open are currently in a state of disrepair, these are thought to be the only pay and play squash courts within the District.  Army Cadets Hut - the hut is owned by the cadets with the site leased to the cadets. The hut is in the North-West corner of the site and is in good condition.  Studio – very run down pair of buildings used in the past for nursery/play group and store for the Greig Hall.  Tennis Courts – these are not currently used and would require investment to bring back into use.  Parking – there are a total of 47 parking bays on site of which 5 are for disabled use. There is capacity on site for additional parking by the side of the Greig Hall. 1.3 The plan below provides an overview of the layout of the site: 1.4 It should be noted that there is a restrictive covenant on the whole of the site which restricts the use to “Public Hall and Youth Centre”, this covenant naturally does depress the overall value of the site. 1.5 Funding Agreement 1.5.1 In October 2005 The Council entered into a funding agreement of £800,000 with the Trust. This followed the decision of The Cabinet on 29 November 2004 to provide the funding in order for improvements in the Leisure Provision at the facility. This was part of a strategic review of leisure within Alcester which also provided support of £200,000 to Alcester Grammar School towards a new sports hall. In addition to the funding from SDC, funding of £150,000 was made available from Alcester Town Council for the enhanced leisure provision. 1.5.2 Prior to the funding agreement the Trust was generating annual losses. The Business Plan provided to support the funding agreements expected that, following refurbishment, sufficient income could be generated to sustain the both the leisure provision and the Greig Hall. 1.5.3 The legal agreement for the grant runs for a 25 year period and the grant is to be repaid to the Council in the event of a default by the trust, including the event where the “Trust ceases to operate a leisure business from the property” or that “the legal status of the Trust changes”. 1.5.4 The funding was predominately used to refurbish and modernise the Life Styles building on the site and works were completed by January 2007. 1.6 Period 2007 to 2013 1.6.1 In July 2007 the Executive considered a report to provide further revenue and capital funding to the Greig. The Executive were warned of a cash flow problem which could potentially see the closure of the facility. Within the report it was identified that the Trust was paying £35,000 per annum in leasing charges for fitness equipment. The funding request was refused and, during the summer, options were investigated to introduce SLM to run the facility on behalf of the Trust. 1.6.2 In December 2007 the Executive considered a request to allow an additional charge on the Greig site of £180,000. This charge would enable a loan to be taken out to buy the fitness equipment thereby saving leasing costs of £35,000 per annum. The Executive agreed to this request and a loan was entered into with Unity Trust Bank and made second charge to the asset, behind SDC however, ahead of Alcester Town Council. 1.6.3 Following the loan with Unity Trust the position in relation to the site was and remains as follows:

Order of charges Amount £ 1. Stratford-on-Avon District Council 800,000 2. Unity Trust Bank 180,000 3. Alcester Town Council 150,000 Total 1,130,000

1.6.4 The financial position of the Trust did not improve following the new loan. The Trust approached the Council on more than one occasion with the objective of securing on-going revenue support. In 2009 the Council was warned by the Trustees that the facility would close within a year without such grant support. 1.6.5 In late 2009 and during 2010, the Trust engaged the services of Trebor Development to draw up proposals for redevelopment of the site. These proposals would have seen the demolition of the Greig Hall, squash courts, Army Cadets hut and the Studio to make way for housing development. The funds generated from such a redevelopment being used to finance the refurbishment of and the extension to the Sports Hall. There was significant local concern from ward members and the Town Council to the proposals at the loss to the town of The Greig Centre through such a redevelopment. 1.6.6 Consideration was given by The Cabinet on 1 November 2010 to relax the terms of the grant conditions to allow development of the Greig Hall portion of the site for housing purposes. Proceeds from the proposed development would have seen a return to SDC of £200,000, thereby reducing the charge to £600,000 along with the repayment of 50% of the Unity Trust loan. The Council were warned by the Trustees that if the development did not proceed then the leisure facilities would be forced to close. The decision of The Cabinet was as follows:- That the request from the Greig Trustees, as detailed in the reported presented, be supported in principle on the understanding that:- a. further legal work would need to be undertaken to ensure that the Council could consent to the release of any covenants; b. it would also be necessary to carry out an independent valuation of the land retained by the Company to ensure that it provided sufficient security for the remaining charge and; c. the business plan produced by the Trustees was viable. 1.6.7 Concern within Alcester was growing at this time due to the potential loss of the facilities. The Greig Hall Action Committee was formed from local residents and they prepared for the Town Council and the District Council a proposed business plan for the running of the Greig Centre. These proposals and the principle of on- going community use of the facility are supported by the Town Council. 1.6.8 The planning application was submitted to the Council for the redevelopment and refurbishment in December 2010. The application was considered but refused by the Council in September 2011 on a number of grounds. Therefore the proposal for the development did not proceed. 1.6.9 In August 2011 The Trust announced the closure of the Greig Hall. At this point they were still hopeful of securing planning consent. However, the rationale for the closure was to maintain the Greig Lifestyles Building and squash courts. At this time the Trust also reduced costs and staffing to try and remain solvent. The Greig Hall has deteriorated since closure, however, Alcester Town Council have expressed an interest in returning the Hall to community use and have requested a long term lease of the Greig Hall. 1.6.10 Although the closure of the facility was a technical breach of the funding agreement it was not deemed to be sufficient to trigger the repayment of the grant funding. No action has therefore been taken against the Trust. However it was expected that the Trust would commence insolvency proceedings in the near future. 1.6.11 In late 2012 early 2013 the Trust approached the Council. Whilst the Trust was continuing to provide leisure facilities this meant operating at a minimal level of staff and with the Trustees having taken on day-to-day management roles. The Trustees were able to negotiate a ‘standstill arrangement’ with Unity Trust Bank, who had issued letters in late 2011 and in early 2012, seeking immediate repayment of the outstanding loan balance of circa £180,000. The Trust proposed a merger with Wychavon Leisure on the basis “to secure the future of community leisure facilities in Alcester and to improve the facilities and services offered with a health and wellness focus”. 1.6.12 The proposal was underpinned on the basis that the site would still be considered for redevelopment and proceeds used from this redevelopment used to support the Sports Hall. This request was considered and rejected by the Leader and the Portfolio Holder for Technical services for a number of reasons including that “the solutions do not appear to have any future for a community hall”. In August 2013, the Leader wrote to the Trust to that affect. 1.6.13 In September 2013, Council officers met the Trust at the Lifestyles Building. The purpose of this meeting was to discuss the impending closure of the facility and determine whether the Council could help with a managed transition with the view of maintaining leisure provision in Alcester. The response from the Trust was that they are continuing to operate and are not under any imminent threat of closure. 1.6.14 It should be noted that, as well as the Greig Hall and the Lifestyles Building in the top Western corner of the site, there are two extant leases in place. One relates to the Army Cadets, whose hall is located within the grounds of the Greig site, the other relates to a Vodafone communications mask. Both of these leases have been producing income for the site. 1.6.15 In December 2013 the Council was approached directly by Wychavon Leisure who stated: “ We are considering making a substantial investment in the Grieg Centre and hold the view that the District Council has a significant stake in the future of the site and the Trust. 1.6.16 Discussions were held with Wychavon Leisure and it was established that the financial position of the Trust had deteriorated further and that without a deal being agreed the facility would need to close in the very near future. Peter Williams from Wychavon Leisure stated that he had discussed with the Trustees the seriousness of knowingly trading whilst insolvent. The discussions with Wychavon Leisure were terminated when it became clear that the interests in the land that Wychavon were proposing for them to operate the site could be considered as a subsidy to a commercial business. 1.6.17 It is recognised that if the Trust is placed into insolvency proceedings, whilst SDC as first charge on the land would probably gain the asset in the fullness of time, there is likely to be a considerable period where there would be no leisure activity on the site. 1.6.18 The Cabinet, at their meeting on 10 March 2014 agreed that they would support a managed transfer of the Grieg Site from the Trustees to SDC and put in place Capital and short term revenue funding to facilitate this. 1.6.19 Following an extended period of negotiation, during which SDC paid a monthly subsidy to the Trustees to continue operating the Lifestyles building and funded legal advice for the Trust, the Trustees decided not to complete the managed transfer and since this time they have continued to operate the leisure facility at the site. 1.6.20 The principal reason for the managed transfer not taking place appears to relate to differences of opinion as to the value of the site with the restrictive covenant in place. The Trust has erroneously adopted the position that the site should be valued without the covenant in place. 1.6.21 A meeting with the Trustees was held in August 2016 which tried unsuccessfully to resolve this difference of opinion and since then the Greig Trustees have continued to operate the site. 1.6.22 As part of the Corporate Strategy for 2015-2019 the Council undertook to ‘Commence refurbishment of the Lifestyles Sports Hall at the Greig Centre’. Due to the Trustees refusal to complete the transfer it has not yet been possible to deliver on this commitment.