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Shop closures will follow £70m deal
• AT a time when the three national political parties are promoting sustainable communities and the importance of small businesses to the community, Islington Council has chosen to go in the opposite direction.
More than 200 small businesses are to bear the brunt of the council’s decision to sell the freehold of their commercial properties to one of the richest men in Britain. This decision will cause the closure of many of the small businesses and reduce the choice available to thousands of residents who use their services.
Through the efforts of Islington Traders Group and the support of thousands of people from the community, leaseholders have been given the chance to buy their property if they can match the winning bid.
David Pearl bid £70 million for the 220 properties. He was obliged to place a value on each property. If the leaseholder could match this price then he or she would have the opportunity to purchase the property.
The “valuation” is the flaw in the process. The value is not the true value of the property as it would be if you were buying a home and borrowing the money from the bank.
It is an arbitrary value assigned by the property developer depending on the potential development value of the property.
It is designed to ensure the leaseholder is not in a position to bid for the property if it is a desirable redevelopment property.
Properties without an existing leaseholder are given a low value and those in the middle are assigned an arbitrary value not based on any of the normal criteria for the valuation of a property. Therefore, some leaseholders are happy with their price and many others are severely disadvantaged.
The council expected a bid of £45 million on properties with a current rental value of £2.4 million. The fact that the winning bid is £70 million will cause a significant impact on the local economy.
Mr Pearl and his associates will be expecting an income of at least £5 million a year. This is equivalent to being told your mortgage or rent has doubled.
It will cause inflationary pressure on the supply of goods and services, as increased rents or mortgage repayments will treble the costs of running a business. For many of the businesses this will mean they will have to close.
As rents increase for the former council properties, there will be pressure for increased rents for shops owned by private landlords and the loss of the diverse small businesses in these buildings.
Our shop fronts are protected but not our shops. There will be a downward spiral as businesses become uneconomic and are forced to close. Empty shops will become residential and the few remaining shops will close through lack of custom.
This has already been seen in many parts of the borough and throughout the country, which is the reason for the introduction of the Sustainable Communities Bill to Parliament this year.
With one blow, the council’s Liberal Democrat executive is changing the face of Islington forever.
Islington will become a much poorer and less interesting place to live in. We will lose the sense of community that comes from our local shopping areas.
DALE BARTER
Islington Traders Group
Amwell Veterinary Surgery
Amwell Street, EC1
• PETER Talbot suggests that Green councillor Katie Dawson should have backed a Labour stunt to elect Richard Greening onto the council executive (Shops don’t expect to be subsidised, May 25).
In fact, there was never the slightest chance of this wheeze coming off, as the Lib Dems have the casting vote. This kind of meaningless and time-wasting posturing is not something the Green Party – or Islington residents – want to see.
The truth is, the Greens have opposed the forced sell-off of shops from the start. We have also exposed the council’s plans to do the same to voluntary groups. Labour, when it ran the council, did little for the commercial tenants it now claims to support. In contrast, the Islington Green Party has been campaigning on behalf of local shops for years.
JAMES HUMPHREYS
Islington Green Party
Herrick Road, N5 |
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