Uncertainty hangs over the future of an important part of Birmingham’s industrial heritage and 21 small businesses. Digbeth is Good has recently discovered that the Canals and River Trust intends to sell the leasehold a 3.5 acre site within the Warwick Bar conservation area, which has alarmed those who live and work there.
The area for sale includes grade II listed buildings on Fazeley Street, Warwick Wharf, the Banana Warehouse and Minerva Works. The site is significant to Birmingham’s history and is contained by the Digbeth Branch canal, the Grand Union canal – which linked Birmingham to London – and the river Rea on which the city emerged.
Most of the 21 fledgling businesses with existing lessees, many of whom have made significant financial investments in their enterprises, knew nothing about the sale until yesterday, and the bidding process ends next week, with contracts to be exchanged before the end of March. The winning bidder will own the leasehold for the next 150 years.
The speed and timing of the sale raises questions about financial management, as the site would clearly raise more money with outline planning permission. There is a concern that this could be a ‘fire sale’, being rushed through before the end of the financial year. One of the concerns centres on the prospect that the site might be attractive to developers wishing to use it for high density housing; such a proposal was suggested a few years ago, but didn’t reach the formal planning stage. As the site sits within Birmingham’s Enterprise Zone, any development would potentially benefit from a less stringent planning process and other forms of business support.
Following on from recently reported concerns about the financial affairs of charities such as Kids Company and Age UK, all charities are more acutely aware of the need to maintain appropriate reserves and monitor their business relationships, so as to safeguard the broader reputation of charities. The apparent lack of openness with the existing leaseholders by the charity and the haste regarding the sale detracts from the perception of the charity and its purposes at this challenging time.
John Gordon, Chair of Digbeth Residents Association, believes “charities are legally required to ensure that their disposal of asserts are conducted in a manner that would be in the best interests of the charity, and under terms that are the best that can be reasonably obtained in the circumstances.”
He added: “It is questionable that the suggested secrecy, restricting the number of potential purchasers and unnecessary haste are in-keeping with achieving those expectations which are rightly placed on charities. On this occasion, a longer, more considered approach may benefit everyone.” Indeed, the current site has been studied and praised for its considered and pioneering approach to development, named ‘slow architecture’ by academic studies.
On hearing about the intended sale, Councillor Tahir Ali (the city’s Cabinet Member for Development, Transport and the Economy) expressed his view that “…as a city, we clearly welcome economic development, but it should always be conducted in a way that is respectful of our heritage and mindful of the communities that live and work here.”
After discovering the sale by chance yesterday morning, leaseholder Alison Tuck has rallied around other residents of Warwick Bar to encourage them to write to local MPs. Alison and her partner not only lease two business units on the site, but also live there and have been past recipients of a Digbeth Community Award.
Alison posted a draft letter on Facebook, encouraging other tenants to use it as a guide: “On Monday I was passed a confidential sale prospectus for the site known as Warwick Bar which includes Minerva Works. Sale is by way of closed bids for the 150 year lease of the site; the deadline for which is the 19th of February.
“The site is comprised of over 20 Creative SMEs and Arts organisations in the heart of Birmingham’s Arts and Culture Quarter. None of the tenants on site were informed of the impending sale. We found out by accident when a prospective buyer visited the site, claiming if his bid was successful we would be off the site in six months regardless of the leases we held as the site was to be flattened.
“We have taken legal advice as to the veracity of his claims. In 2008, the Canal and River Trust (CRT) – formally known as British Waterways – sold the long-term lease of the Warwick Bar Estate to ISIS Waterside Regeneration LLP. This is shown in the leasehold for the site area to the north side of Fazeley Street, Digbeth, B5.
“ISIS Waterside Regeneration LLP is jointly owned by CRT and is their property development company. Several directors of CRT sit on the management of ISIS Waterside Regeneration LLP. They have bypassed part of the Charity Act legislation (specifically sections 117-121) on disposals of property by a clever misdirection of lease ownership. Tenants of the site, and the wider UK public for whom the property is held in trust should be protected by the Charity Act and the scrutiny of the Charities Commission.
“By employing this legal but unethical sleight of hand, the Canal and River Trust and ISIS Waterside Regeneration LLP have removed the right to make representations on the sale of the current long-term lease and have removed an avenue to negotiate the type of regeneration, and the scrutiny of the conservation of the heritage of the canals and properties held in trust for the nation.
“We question whether it is possible to remove this loophole from laws governing charities, given the current climate of trusted charities appearing to be in the pocket of big business and being financially mismanaged. We also question whether the Canal and River Trust can be scrutinised over their handling of their property portfolio of £500m granted to them by the government in 2012.”
It is now understood that following the level of concern expressed by leaseholders at Minerva Works, the CEO of the Canal and River Trust, Richard Parry, and the Property Director, Stuart Mills, have agreed to meet with them later this week. We hope a clearer picture of the site’s future may be forthcoming.