Nottingham City Council is to sell The Ferry Boat Inn in Stoke Bardolph.
In a decision published this week the council notes:
‘The Council took an upfront premium for the grant of a 99-year leasehold interest on the premises in 1972.
‘There are 50 years left on the current freehold but in reality the Council would not get vacant possession when the lease ends.
‘This stores up problems for the future which will be management intensive and will also need specialist external advice in regard to any new letting.’
‘There is no scope to increase the Council’s income as the ground rent is fixed for the remainder of the lease term.
‘After a review of the Trading Account Portfolio it has been decided that high value but low income assets such as this should be disposed of to support the Recovery and Improvement Plan 2021 – 2024.’
The council is recommending an auction sale, it says that this enables the Council to seek interest during a defined marketing period and set a minimum sale price by way of reserve.
Auctions create a competitive bidding environment which helps ensure the Council will received best consideration.
It is therefore considered the most appropriate route to market.
Nottingham City Council announced last month that it will sell off some of its assets including land in order to claw back nearly £1bn of debt it owes.
It is a testing time for the local authority as the council is under the watchful eye of the Secretary of State for Housing, Communities and Local Government, MP Robert Jenrick.
It has been warned Government commissioners could take control of the Labour-run authority if it does not make satisfactory progress on reducing its debt.
The Labour-run authority has three years to get its house in order on the back of a string of financial issues including setting up a failed energy company, Robin Hood Energy.
The pandemic has cost the authority £66.5 million due to lost income from leisure centres, parking income and the Theatre Royal and Concert Hall being closed at the height of restrictions.
Despite Government grants and compensation of £50.1 million, it has left the local authority with “an unfunded Covid-19 gap” which now stands at £19.4 million.
This is coupled with the high amount of external loan debt it has acquired of £932.7m, from which it has managed to shave off £141.8m over the last year.
Cllr Webster said the council has around £1bn worth of assets but not all of them are suitable for sale, such as parks and open spaces.
But they are looking to ‘sell off land’ to claw back the debt.
Cllr Webster also added: “Long-term reductions in council funding have resulted in budgets being increasingly difficult to achieve and has led to consistent budget overspends.”
In 2012/13 he said the Government provided the council with around £127m a year. This has now fallen to £25m.
The council can still apply for capital investment grants and has been successful on a number of occasions, including public realm work around the new car park, bus station and former Broadmarsh.
It also secures money from business rates, Council Tax, fees and charges.