Decision details

To use the receipt paid over from the Everyman Theatre from the sale of a property on Hewlett Road to part repay the outstanding loan to the theatre

On 12th February 2010, the Council approved in principle the request for one off capital grant to the Everyman theatre of £250,000 funded from the Capital Reserve in 2011/12 subject to a £30,000 reduction in annual grant over a 6 year period and the granting of a new lease plus a £1m loan with interest and delegate to the Chief Finance Officer (Section 151 Officer), in consultation with the Cabinet Member for Community Development and Finance, the authorisation of the loan subject to ensuring that the theatre can demonstrate a robust business case for repaying the loan.

Subsequently, the Section 151 approved the facilitation of the loan to the Everyman Theatre Company from the Public Works Loan Board (PWLB) to part fund the refurbishment of the theatre.

The financing costs of the loan were paid for by the theatre.

In facilitating the loan, the council placed a charge on a property owned by the theatre, 63 Hewlett road, as part security for the loan (dated 17^th August 2011)

The Hewlett road property was leased to a third party and the rental income supported the theatre’s P&L account. The property recently became vacant resulting in the loss of rental income from the property.

The theatre has recently sold the property and requested that the council used part of the receipt to repay some of the outstanding loan thereby reducing the ongoing financing costs of the loan to the theatre which would offset the loss of rent.

In line with the original delegation, the Section 151 Officer has made the decision to use £340k received as a result of the sale of the property to reduce the amount of the loan outstanding. The theatre has been notified of the reduced loan repayments. Since the original PWLB loan is not repayable without penalty, the receipt will be used to support the council’s cash flow and temporary borrowing.

In addition, the Section 151 Officer has authorised the release of the charge over the property on Hewlett road and, as such, a DS1 Land registry form has been signed and sealed by one legal (council’s legal support) and issued to the theatre’s solicitors.

An option to have a repayment holiday was offer to the theatre company and considered by the Everyman theatre board but was rejected in favour of part repaying the loan.

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The Cabinet Member Finance supported this decision

Cabinet Member Finance