otley town council: civic centre working group civic

Otley Civic Centre Feasibility Study of 45

OTLEY TOWN COUNCIL: CIVIC CENTRE WORKING GROUP Civic Centre Business Plan Stage 1: Revenue Feasibility Study

Executive summary

0 Introduction

0.1 Surely the building’s a white elephant: why not just sell it for development?

0.2 Background to this study

0.3 Further consultation

1. Preferred option for the development of the Civic Centre

1.1 Goals

2 Evidence for the business case

2.1 Community profile

2.1.1 Otley town

2.1.2 Otley’s urban and rural hinterland

2.2 Community facilities audit

2.3 Consultation

2.4 Contribution to wider regeneration

3 Examples of refurbished buildings from elsewhere

3.1 Buildings visited, business plans reviewed

3.2 Key learning points from other projects

4 Future uses of the Civic Centre

4.1 The Auditorium/Event Hall

4.1.1 Cinema

4.2 Other uses of space

4.2.1 Long term tenants

4.2.2. One off room booking: function room / office space / hot desk to hire by

the day / hour

4.2.3 Café / Bar

4.2.4 Community use

4.2.5 Marketing and promotion

4.2.6 Staffing

4.2.7 Partners / stakeholders / sponsors


5 The building’s ownership and management structure

5.1 Current ownership, asset transfer or lease

5.2 Options for an arms length organisation

5.3 Transitional arrangements

5.4 Future governance

6 The preferred option for future development

6.1 Town planning

6.2 Conservation

6.3 Building regulations

6.4 Access issues

6.5 Environmental sustainability

6.6 Theatre report (2008)

7 Revenue projections

7.1 Financial sustainability

7.2 Income and expenditure summary for first 5 years

7.3 Income and expenditure assumptions

7.4 Annual revenue projections – summary

8 Funding opportunities and strategy

9 Risk assessment

9.1 Public sector liability for cash flow difficulties

9.2 Lack of capacity to take the project forward

9.3 Lack of demand for proposed uses

9.5 Lack of car parking

9.6 Failure to get local buy in

10 Action plan

11 Conclusion


Appendices

Appendix 1: Income and expenditure projections for first five years

Appendix 2: Event Hall: Year 5 revenue project

Appendix 3: Staffing

Appendix 4: Preferred option for future development (drawings and elevation)

from Pulse report, 2008

Appendix 5: Theatresearch consultancy report on the auditorium from Pulse

report, 2008

Appendix 6: Cinema options

Appendix 7: Community consultation July 2013

Appendix 8: Previous users


“Old buildings resonate deeply, especially for those who have new ideas or want to

be innovative. That is why world-wide thousands of old buildings, some ordinary,

some extraordinary, some quirky and some grand have been put to new use. Think

of the houses, shops, warehouses, breweries; train, bus or fire stations; cement,

coal, textile, tobacco or steel factories; old markets or military barracks that have

been transformed into retail emporia, culture or experience centres, incubators and

company breeding grounds and as hubs for wider urban regeneration.”

Charles Londry, in New ideas need old buildings, a report by the Heritage Lottery Fund, 2013

“I’m less interested in demolition of old buildings. Because it’s amazing how new

things are soulless, even really interestingly designed new things so often don’t feel

soulful until they’re old. And so I’m quite interested in how you lean on, work with,

adapt [old buildings] and you end up with places that have a spirit. Even if they’re

not super treasures you can make them super treasures by the way you work with

them.”

Thomas Heatherwick, English designer described by Terence Conran as the ‘Leonardo da Vinci of our

times’, in an interview on the Today programme, 27 December 2013.


OTLEY TOWN COUNCIL: CIVIC CENTRE WORKING GROUP

Civic Centre Business Plan Stage 1: Revenue Feasibility Study

Executive summary

This Revenue Feasibility Study represents Stage 1 of the Business Plan for Otley

Civic Centre. It is a first draft and is presented for discussion, constructive criticism

and further refinement.

The study considers whether the Civic Centre, once refurbished, can generate

enough revenue as a cultural, creative, entertainment and community facility to cover

its running and maintenance costs. The income and expenditure projections in the

study are supported by evidence from similar venues elsewhere. A realistic budget

has been allocated to ensure that the building’s fabric, services and finish can be

maintained over a 30 year lifecycle. This will prevent the need for further public

subsidy at a future date and will remove the burden of maintenance responsibility

from Leeds City Council.

The capital costs of refurbishment are to be dealt with separately.

Objectives

To make the Civic Centre financially sustainable, it is proposed to:

Provide a large town centre venue with a flexible 400 seat auditorium space that

can offer moveable raked seating and stage or flat floor, with a full range of

supporting facilities: technical equipment, dressing rooms, attractive public foyer,

café and bar, access lifts, etc. The auditorium was under used for at least 15

years before closure due to access and fire safety issues that refurbishment will

resolve. No other venue in Otley offers comparable facilities.

Develop diverse uses of this and other spaces in the building that will generate

enough income to cover the running costs of the building, including staff, over a

30 year lifecycle.

Build local users/audiences through energetic marketing and promotion to

achieve maximum use of the spaces the building offers.


Offer facilities for community activities and events, at affordable rates, alongside

commercial income-generating activities.

Seek links and partnerships with a range of stakeholders (e.g. Leeds City Council,

Otley Town Council, Otley Town Partnership, Otley Chamber, Otley Bid, Otley

Courthouse, individual local businesses, other agencies involved in regeneration,

etc.) to promote the Centre and the town as a visitor destination, raise the profile

of the area, and attract future inward investment.

The aim is to complement rather than compete with the Courthouse Community Arts

Centre, and there have been initial discussions with the Courthouse on possible

areas for collaboration.

National research shows that a large, successful events venue would have practical

spin-off benefits for the wider economy: it will enhance the offer to visitors and

tourists, providing an all season venue for festivals, fairs and other entertainment and

cultural events. It will help support the people working in the local cultural and

creative sector, with spillover benefits to other businesses offering visitor services

like restaurants, accommodation, bars, cafés and retailers, so contributing to the

economic vibrancy of the town. And it reduces the leakage of local money to

elsewhere: when Otley residents travel to Ilkley, Harrogate, Leeds or Bradford for

cultural and entertainment events, they also take their retail spending.

Future governance

The building is owned by Leeds City Council but is assumed that the Town Council

will be responsible for the the building after refurbishment. The two councils will need

to agree an appropriate legal and management structure for this to happen. The

Town Council’s preference is for an arms length politically independent legal entity,

such as a development trust or charitable company limited by guarantee, which will

protect the use of the building into the future for the benefit of the local community.

Revenue projections

Vigorously promoted and marketed as an arts and entertainment venue, with a

budget allocated for a Business and Creative Director to oversee this, it is estimated

that the flexible 400 seat auditorium space could within 5 years achieve a 72%

occupancy rate and generate around £179,000 in Year 5, or 78% of the annual

income required to cover the full costs of running the building. These costs include


full maintenance of fabric, services and finishes over a 30 year lifecycle, a marketing

budget, team of staff, and training and development.

Other uses of the spaces in the building that will generate income include:

long-term tenants (e.g. East Street Arts has expressed interest in a 5-10 year

lease of studio space)

One off room booking: function room / meeting room / office space / hot desk to

hire by the day / hour for community and business use

lease of the Café and Bar, tendered in the first instance to local proprietors

The feasibility study shows that the building will run at a deficit in the first few years,

but by around Year 5 and thereafter the deficit will equate more or less to the

repayment of the Public Works Board loan.

The revenue projections show the deficit in Year 1 is expected to be around £69,000.

This includes the Public Works Loan Board loan repayment of £30,000 pa. The

deficit will reduce over 5 years so that projected annual income in Year 5 is

£229,494, and expenditure is £265,863, a deficit of £37,169.

The income will be supplemented by a transfer from Otley Town Council to cover the

Public Works Loan Board loan repayments and the reducing annual shortfall. From

Year 5 onwards this is projected to be between £2,000 and £7,000. It is proposed

this arrangement is be guaranteed through a leasing contract whereby Otley Town

Council commits to a fully maintaining lease and then sublets the Civic Centre to a

charitable trust that will run the building. Before committing to this agreement, Otley

Town Council would need any final business plan and leasing contract to be

reviewed by an external auditor. It is also proposed that the Town Council commits to

the higher levels of support required by Otley Civic Centre during Years 1-4 and, in

preparation, is in the process of building substantial capital reserves, projected to be

£38,000 by 2014/15 and increasing in subsequent years. This will prevent the need

for a precept rise to cover a subsidy to run the building during Years 1-4.

If this Stage 1 Revenue Feasibility Study is accepted, the second stage of the

business plan should identify sources of funding that will support specific aspects of

the project’s development, and help to reduce the revenue gap. This work will

become the responsibility of Trustees and the Business and Creative Director once


in post.


0 Introduction

This feasibility study represents Stage 1 of the proposed business plan for Otley

Civic Centre. The building is owned by Leeds City Council and was run by Otley

Town Council until it closed in 2010. The aim of this feasibility study is to consider

whether the Civic Centre, once refurbished, can generate enough revenue as a

cultural, creative, entertainment and community facility to cover its running and

maintenance costs.

The capital costs of refurbishment are to be dealt with separately from this study of

the revenue projections. When Otley Town Council established the Civic Centre

Working Group in May 2013, Leeds City Council asked the group to focus on

whether the building could generate enough revenue to be financially sustainable.

0.1 Surely the building’s a white elephant: why not just sell it for development?

Otley Civic Centre is a Grade II listed heritage building with large interior spaces

designed for public use in the 19th century. The building has symbolic value for local

people. As the former Mechanics Institute, former home of the Town Council, and

above all as a previously well-used community facility, it is widely regarded with

affection, a physical symbol of the rich and diverse personal memories of events

attended and times spent within its walls. From intimate memories: “I had my first

kiss on the dance floor”: “I had my wedding reception here”, to collective community

memories of success and achievement: ‘Folk Festival now ranks amongst top three

in country’ (Wharfedale Observer, 22 Sept 2005) – the building is part of the town’s

sense of place and history.

As well as the Civic Centre’s cultural value to the town, it is also an important

architectural landmark, located as it is on the gateway to the town centre from the

east, facing onto the historic Cross Green with its Maypole. It is no accident that this

site was chosen for a major civic building, and its location is no less significant today.

Architecturally, the building has the external presence and dignity to read as a major

public building, appropriate to the size and status of the town, and internally, has a

large, purpose-built, dignified but adaptable auditorium not available elsewhere.

In the present economic climate, many councils are reviewing and consolidating their

assets, and selling off buildings that they no longer need or cannot support. Some

old building lend themselves to conversion for new uses such as housing or offices,

others are far more difficult. The size of the interior spaces and the protective Grade


II listing make the Civic Centre uneconomical to convert for housing or offices.

Developers would not be interested such a project and given its historic importance,

consent to demolish it is very unlikely.

So the town and city council are faced with the question: ‘Can a sustainable use be

found for this large disused heritage building in the centre of Otley?’

If a sustainable use cannot be found for the building, the City Council as the owner

has a duty of care to maintain the empty Grade II listed building in a weatherproof

state, so the building will continue to consume public resources.

This feasibility study represents the first stage of the business plan: it considers

whether future uses for the building can be found that will generate enough annual

revenue to make it financially self-sustaining.

This study takes place in the wider context of Otley Town Council’s work on the Otley

Neighbourhood Plan (NP), which will take place over the next 2 years. The Plan will

help to shape future developments and enhance the unique character of Otley’s

Conservation Area. The NP provides an opportunity for the Civic Centre

refurbishment to be considered as part of a whole town vision for future

development.

0.2 Background to this study

The feasibility study has been developed by the Town Council Civic Centre Working

Group. The study builds on:

the 2005 feasibility study1 and 2008 development plan2 commissioned by the city

and town councils respectively on the future use of the building,

an initial consultation exercise in July 2013 (see 2.3)

fact-finding visits to similar projects in Yorkshire, Northumberland and Lancashire

(see 4)

analysis of business plans where projects have kindly made them available

(see 4)

internet research to compare other venues of similar size and the programme of

events they offer

an initial round of consultation with the local community in summer 2013.


0.3 Further consultation

Although this feasibility study included an in initial round of consultation, the

proposed next stage of the project (see 10 Action Plan) will require a second round

of detailed research and consultation with the fullest range of current and potential

stakeholders, users, and supporters in order to refine the proposals for future uses of

space outlined in Section 4. This is a prerequisite to specifying the final architectural

brief in detail.

1. Preferred option for the development of the Civic Centre

The proposed business case for the building represents a step change: to be

financially sustainable, future use will need to be very different from the past.

Previous levels of public subsidy from city and town councils are no longer available

to run the building, and local residents and council tax payers would be unwilling to

support such a level of long-term subsidy. Alongside its role of providing facilities for

the community, and to be able to fulfil this role, the building will need to generate

enough revenue to cover its running costs.

1.1 Goals

The broad goals of the Civic Centre will be to:

contribute to a vibrant creative and cultural economy in the town

promote community cohesion by providing community facilites

contribute to the economic vitality of Otley Town Centre.

Specific objectives are to:

Develop diverse uses of the building that will generate enough income to cover

the long term running costs of the building, including staff.

Provide a large town centre venue with a flexible 400 seat auditorium space that

can offer raked seating and stage or flat floor, with a full range of supporting

facilities: dressing rooms, attractive public foyer, café/bar, access lifts, etc.

Build local users/audiences through energetic marketing and promotion to

achieve maximum use of the spaces the building offers.

Offer facilities for community activities and events, at affordable rates, alongside

commercial income-generating activities.

Provide opportunities for enterprise development (e.g. in uses of the auditorium,

studio and office spaces and café/bar)


Work with providers of services to young people to identify demand for and

develop activities and facilities that will engage and include this age group, for

whom there is a lack of leisure/entertainment facilities in the town

Seek links and partnerships with a range of stakeholders (e.g. Leeds City Council,

Otley Town Council, Otley Town Partnership, Otley Chamber, Otley Bid, Otley

Courthouse, individual local businesses in the creative, entertainment and retail

sectors) to promote the Centre and the town as a visitor destination, raise the

profile of the area, and attract future inward investment.

Developing partnerships where possible and strong links with other organisations is

essential as the Civic Centre, successfully promoted and marketed as a creative,

cultural and community venue, can directly contribute to the local economy:

growing audiences and markets for Otley’s creative and cultural enterprises

expanding and enhancing Otley’s offer to visitors and tourists, with all-weather

events that will increase the numbers of visitors to the town throughout the

calendar year

showcasing Otley’s tourism offer through events and exhibitions, promotions in

the café/bar, and signposting visitors to local retailers, creative producers and

other businesses

increasing the proportion of leisure spending that stays in the town, and thereby

food, drink and retail spending as well.

The Civic Centre facilities will be complementary to facilities supplied by the

Courthouse Community Arts Centre, and the aim is to work collaboratively with the

Courthouse. The Working Group has held initial discussions with the Courthouse on

possible areas for collaboration, such as a joint ticketing system.

2. Evidence for the business case

2.1 Community profile

2.1.1 Otley town

Otley had a population of just under 15,000 at the 2001 census.3 The population is

due to grow as the priority of the Leeds Local Development Framework Core

Strategy to is to direct new housing towards the main urban area followed by major

towns such as Otley.


The Otley population has a higher proportion of people aged 40-60 than the Leeds

average, with a slightly larger than average older population, and a lower than

average proportion of people in their twenties and thirties. Population data is

available separately for the areas north and south of the river in Otley.4 Acorn 2010

profiles (based on census, lifestyle and other survey data) divide neighbourhoods

and postcodes into five broad economic categories. Combining figures for north and

south of the river, the Otley population overall falls into 3 main categories:

‘comfortably off’ (46%)

‘hard pressed’ (22%),

‘wealthy achievers’ (19%).

The proportion of people in other categories is smaller:

‘moderate means’ (6%)

‘urban prosperity’ (7%).

The town has a range of smaller arts, cultural, and entertainment venues and

activities and a higher than average proportion of home workers and small

businesses involved in the creative sector. In the last five years the town has seen a

growth in music groups and activities that need performance venues (Otley Brass

Band, Otley Chamber Orchestra, The Woolpack Studio), and the opening of two new

art galleries.

2.1.2 Otley’s urban and rural hinterland

Otley sits at the north west end of Leeds Outer North West Area, which has a total

population of just under 88,000. Compared to the Leeds average, Outer North West

has a very high proportion of residents who are ‘wealthy achievers’ and ‘comfortably

off’ – 73% of the total population.5

Sitting on the western edge of Yorkshire’s ‘golden triangle’ (Harrogate/ North Leeds/

York), with Ilkley to the West and right on the border of North Yorkshire, Otley has a

relatively affluent rural hinterland population who regularly use Otley Waitrose and

visit the monthly Farmer’s Market.

The Acorn population profiles suggest there is arts and entertainment spending

capacity within the town and hinterland population. The continuing success of Otley

Courthouse, growth in orchestra activities, opening of the Woolpack music centre

and two new art galleries, and opening or refurbishment of five pubs and bars in the


town since 2010, in the face of a recession, are all further evidence of interest in local

spending on arts and leisure activities.

There is also evidence of cautious optimism on the business front. A 2013 survey of

businesses by the Leeds North West MP6 found that although 46% of the 97

businesses who responded said the state of the economy was a barrier to growth, 4

in 10 respondents (40%) thought their business would improve in the next 12

months.

2.2 Community facilities audit

Many of the groups who previously used the Civic Centre have found alternative

meeting rooms. With the exception of Otley Museum, tenants have also found

alternative accommodation. Otley has a range of halls and meeting rooms for hire,

mostly attached to churches or schools. No other venues, however, are directly

comparable with the flexible 400 seat auditorium space, office and studio spaces that

would be offered in the refurbished Centre. Below is a summary of the facilities

offered by town centre halls, and information from the Pulse report on available office

space in 2008.

2.2.1 Town centre halls

An initial review identified these central venues with hall space in Otley:

Otley Methodist Church Hall is the largest comparable venue with 400 seats,

including the gallery, full sound system and induction loop. It has a fixed dias

stage and no tiered seating, a kitchen, but no alcohol is permitted.

Otley Courthouse has an established arts and entertainment programme, a small

auditorium which holds a maximum132 seated theatre style, or 200 standing, bar

and café, and other small meeting/activity rooms.

Bridge Street Church Hall has a maximum capacity of approximately 120 seats.

Because of the limitations of size or catering offer, none of these town centre venues

are directly comparable with the proposed Civic Centre multi purpose 400 seat event

hall and supporting facilities.

2.2.2 Office space

In 2008, the Pulse study found from contacting commercial agents in the town that

there were few offices to rent in the town centre: much existing office provision was

owner occupied by small businesses or sole traders such as accountants and


solicitors, and most office accommodation was located above shops at first floor

level. The agents contacted in 2008 thought that high quality office accommodation

in the town centre should be easy to market and rent, especially small units linked to

other facilities such as meeting and training rooms. 7 Further work is needed to

identify how far this potential demand has changed in the current economic climate.

The 2008 findings, however, echo the situation in Hebden Bridge where the recent

Town Hall development has helped to provide office space, business facilities and

development support for small businesses in the town.8

2.3 Consultation

In summer 2013, the Town Council organised the ‘Your Centre, Your Say’

consultation on the future of the building. This consisted of:

An article in the local paper, posters in the Town Council display windows, and a

letter and briefing sheet to community organisations on the Town Council

database, publicising the consultation and inviting people to submit their views

through several channels.

A Listening Panel – an afternoon and evening session where interested parties

could book an appointment to discuss their needs and aspirations for future

facilities with members of the working group. A total of nine appointments were

requested by local organisations and individuals to discuss their views, and one

organisation sent a written submission.

A Facebook page posted on 25 June invited views on future uses. The page

reached 3,163 people on the first 2 days of posting, with an average reach of 123

per day from 25 June to 9 July. 178 people liked the page and 29 posted

comments.

Posters and suggestions boxes in Otley’s three supermarkets.

In total the Town Council received around 130 responses from the public to their

invitation to comment over a three week period. (This is a better level of response

than that of the previous Pulse ‘public consultation evening’ which yielded only 13

public responses in 2008). The majority of comments showed a positive level of

interest in the building’s future. The most frequent suggestions were:

Cinema 16

Youth facility 16

Concert / live music venue 11


Theatre Space comedy shows etc 8

Otley Museum 7

Function rooms for hire e.g. weddings 6

A total of eight different types of sports/fitness facility were suggested. Ten

responses favoured either demolition, permanent closure or sale. Details of all the

responses are set out in Appendix 7.

As already flagged up, the second stage of the project will require a second round of

research and consultation with stakeholders, potential users, and potential

supporters, as a prerequisite to refining use of spaces and specifying in detail the

final architectural brief.

2.4 Contribution to wider regeneration

In terms of the wider economic benefits of a major cultural and entertainment venue

for Otley, a recent national survey by the Centre for Economics and Business

Research (CEBR) for Arts Council England has analysed the mechanisms by which

arts and cultural amenities contribute to wider economic regeneration:

The regeneration effects of investment in the arts and culture

ECONOMIC SOCIAL ENVIRONMENTAL

Employment Increased social capital Re-use of redundant buildings

Inward Investment Change in perception of area

Increased sense of public safety

Attracting a skilled workforce

Volunteering Reduced vandalism

Property values Residents’ confidence Pride in place

Visitor and resident spending

Community cohesion

Educational achievement

Improved health and wellbeing

Crime reduction

Source: Centre for Economics and Business Research, The contribution of the arts and culture to the

national economy, May 2013, p.88

The CEBR report notes that, while the exact mechanisms driving regeneration vary

with the past and current circumstances and location of individual amenities, local

investment in the arts and culture can as a rule be expected to vitalise local


commercial creative endeavour and businesses. It also pinpoints the potential

benefits to the wider local economy:

“Other sectors of the local economy also benefit from direct spillovers. For example, those offering visitor services like restaurants, hotels, bars, cafés and retailers all benefit from the spending of visitors to the local arts and cultural attractions. Furthermore, new projects in the arts and culture could attract significant media attention, thus increasing the area’s profile and drawing even more visitors to the locality. The money these visitors spend as a consequence of their trip to the arts and culture attraction spreads through the broader economy, sustaining local jobs and businesses.”9

Further key findings10 of the report are:

arts and culture generate more per pound invested than the health, wholesale

and retail, and professional and business services sectors

the economic contribution of the arts and cultural sector has grown since 2008,

despite the UK economy as a whole remaining below its output level before the

global financial crisis.

The CEBR findings reinforce a 2009 Local Government Association Report, Investing

in creative industries which found that creative industries are increasingly considered

as one of the sectors likely to be a future source of jobs, innovation and

productivity.11

In short, these findings translate into practical benefits for Otley: a successful events

venue will enhance the offer to visitors/tourists, draw more all-season visitors,

providing a winter venue for festivals, fairs and other entertainment and cultural

events. It will help support the people working in the local cultural and creative

sector, with spinoff benefits to other business, so contributing to the economic

vibrancy of the town. And it reduces the leakage of local money to elsewhere: when

Otley residents travel to Ilkley, Harrogate, Leeds or Bradford for cultural and

entertainment events, they also take their retail spending.

3. Examples of refurbished buildings from elsewhere

As part of the feasibility study research, members of the Working Group visited

several projects that have successfully redeveloped historic buildings as community

and cultural facilities. This has helped provide a realistic assessment of maintenance


and running costs, income generation, governance and management issues, what

has worked well for other projects, and the pitfalls to avoid. Otley Town Council

would like to thank all the people involved in those projects who so generously gave

us their time, knowledge, experience and advice, hard facts and figures to guide us,

and tea and biscuits!

3.1 Buildings visited, business plans reviewed

Dukes Theatre, Lancaster

A church in the centre of Lancaster, converted in 1971 to become home to a

building-based producing theatre and an independent cinema, with public spaces

including a café, at a cost of £108,000. A registered charity, it achieved an earned

income of more than £975,000 in 2012 – 62% of annual turnover. The Dukes attracts

visitors to the district, 57% of bookers in 2012/13 came from outside the area. In

2011/12, 38% of annual income came from core funding partners, Arts Council

England, Lancashire County Council, Lancaster City Council and Creative England.

Queen’s Hall, Hexham

The Queen’s Hall is an early Victorian building in the Centre of Hexham. After

refurbishment it opened as an arts centre in 1983 with a 350-seat theatre and two

galleries, under local authority control. It was handed over to a charitable

organisation, Queens Hall Arts, in 2001. The building is shared with tenants Hexham

Library and the Exchange Café. Queen’s Hall’s resident theatre company Théâtre

Sans Frontières is based in offices at QHAC and opens all of its shows in the

Theatre.

The Centre has established itself as a strong base for an extensive range of artistic

activity, attracting the best international and national artists from music, drama,

dance and national touring comedy to non professional shows put on by local

community groups. Queen's Hall also provides office space for Hexham Book

Festival and English Heritage curator Judith King.

QHA receives regular financial support from Northumberland County Council, Arts

Council England and Northern Film & Media. It also provides an arts outreach

service to a large part of rural Northumberland. QHA provided the Civic Centre

Working Group with a copy of their Business Plan 2012–2015.


Members of the Working Group who visited QHA were immediately struck with the

quality of the building, its presence in the Town, the way in which the welcoming

foyer and clear circulation related to the Café and Auditorium spaces. They were also

immediately inspired by the possibilities of what could be achieved in Otley Civic

Centre to achieve the same results.

Community Centre, Hexham

Built in 1899 as an annexe of Hexham Abbey and used for church related activities,

the building was bought by Hexham Community Association, a charitable trust, in

1962, and maintained and upgraded on an ad hoc basis over the years with support

from Northumberland County Council.

In 1990 the building was nominated by the Town Council for major refurbishment as

a community facility. The £300,000 refurbishment was completed in 1997 with grants

from the National Lottery and several other major charities. The Hexham and

Tynedale Community Trust was set up to run the new Centre which has three halls,

the largest of which seats 200, meeting rooms, a range of weekly activities, and

several tenants. The Centre is well-used and demand for space is growing.

Pocklington Arts Centre

Pocklington Arts Centre opened 2000, following an intensive period of fundraising to

support the funds provided by Pocklington Town Council to purchase and refurbish

the former Ritz cinema.

The Arts Centre offers a programme of film, music, drama, dance, lectures,

workshops and exhibitions. It provides conference facilities and hire opportunities for

business, and is used regularly by local charities and community groups. Pocklington

Arts Centre operates independently of Pocklington Town Council, as a not for profit

organisation, and it achieves its objective to break even.

The local community is heavily involved in the management and operation of the

venue, principally through the Friends of Pocklington Arts Centre (a registered

charity) and there is a stated aim to involve as many people as possible in the area

as participants. The Friends provide volunteer staffing for box office, auditorium

duties and leaflet distribution.


Hebden Bridge Town Hall

Hebden Bridge Town Hall is the first community-owned Town Hall in the north of

England. Hebden Bridge Community Association considers the project to be a

symbol of what a community can do when it pulls together with a common ambition

and vision. The Grade 2 listed Town Hall was built in 1897, and has had many

functions over the years, including home of the local fire station and council offices.

In 2010 the Hebden Bridge Community Association (HBCA) was formed and

acquired The Town Hall from Calderdale Council through an innovative Asset

Transfer Scheme.

HBCA’s vision was to transform the barely used building falling into disrepair into a

state-of-the-art centre for community and creative enterprise – putting it back at the

centre of the town’s civic life. They went on to raise £3.7m for a major development

on the site, funded by the European Regional Development Fund, Community-

builders, Heritage Lottery Fund and Key Fund. The 1960s additions to The Town Hall

were knocked down to create a space for a major new modern extension to sit

alongside and complement the original building.

In 2012, a large new contemporary community and business building was opened

offering a range of spaces for community, enterprise and recreational use. The new

Town Hall combines a range of services for local people and creative businesses

that reflects the Town’s dynamic, independent spirit. Offering state of the art fibre

optic wi-fi, a range of office units for businesses, a light and airy cafe and one of the

largest conferencing and event venues in the Calder Valley, the new Town Hall now

buzzes with activity at the heart of Hebden Bridge’s community life. The Town Hall

receives no grant funding and generates all its income through trading. The

organisation is supported by around 600 Friends of The Town Hall. The HBCA

website has a library of useful documents, including annual reports and the business

plan submitted to the European Development Fund, available at

www.hebdenbridgetownhall.org.uk.

Hebden Bridge Trades Club

The Trades Club was built in 1923, when Hebden was a thriving centre for the cotton

industry, as a joint enterprise by half a dozen local trades unions.The unions levied a

one penny contribution from each member per week, and when finally built, the

building was equipped with a fully sprung dance floor for the purposes of ballroom

dancing.

http://www.hebdenbridgetownhall.org.uk/


As the cotton factories closed down, the building fell into disuse. It was taken over by

the combined Hebden Bridge and Luddendenfoot district Labour parties, who

appointed a Building Management Committee to run it.

The club is now a well known venue for live music and was in 2013 voted into the

finals of the NME Small Venue of The Year Awards, having recently updated its

facilties with a new stage, PA system, mixing desk & LED lighting rig. The venue is a

also community hub that is committed to hosting fundraisers for worthy local and

international campaigns.

Four Clocks Community Centre, Bishop Auckland

The Four Clocks Centre is a converted church, with a four-clock tower, in the Centre

of Bishop Auckland, County Durham. Created as a result of the vision and dedication

of the Bishop Auckland Community Partnership (BACP), the Four Clocks Centre

combines a creative mix of modern and traditional design, incorporating a stained

glass windows which dominates the Reception Area.

The Centre houses the Four Clocks Youth Project, the CAB, Learning Concepts free

basic computer courses, the Town Clerk of the recently established Town Council,

and a popular café, which supports local crafters and artists selling a select range of

crafts and showcasing local artists’ work on the walls.

Available for hire are a large room seating 50, a ‘hot office’ seating up to 6 people,

with Wi-Fi and induction loop, arts and an crafts room on ground floor. Upper floors

are all accessible by lift or stairs.

Spetchells Community Centre, Prudhoe

The Spetchells Centre differs from the other projects visited in that it is a new £1.6m

three storey Centre, purpose-built on the footprint of the demolished library building

in the centre of Prudhoe, funded by a grant and loan from Communitybuilders plus

contributions from Northumberland County Council and Prudhoe Town Council.

The Centre, which opened in 2012, was developed by the Prudhoe Community

Partnership to provide a central hub of information and services for local people, and


is the home of the Partnership along with Prudhoe Town Council, Northumberland

County Council Library and Customer Services, Isos Housing plus a range of

voluntary and community groups & services.

‘Spetchells’ means ‘gathering’ place and the Community Partnership has designed

the building to be a place to meet and access a wide range of helpful services all

under the one roof.

The Centre also has meeting room facilities, offices to rent, and offers a variety of

services ranging from photocopying to document printing for which there is a charge.

Internet access is available via computer terminals within the library

area. Information on local groups, public transport and other town matters is

also available.

3.2 Key learning points from other projects

The Working Group learnt a great deal from visiting other projects. The most

important learning points are:

Imaginative new uses have to be found for old buildings at critical points in their

life or they die.

This necessary leap of imagination takes vision and extended commitment.

Building regeneration projects depend on dedicated people to drive them: most of

the projects we visited relied in different ways on substantial commitment from

individuals, in the form of many hours of unpaid work, either as trustees, or

managers, or promoters, or volunteers, or fundraisers, or in two or more of these

roles.

Some financial support in the form of subsidy, loans, grants, donations and

sponsorship is necessary to get old and deteriorating buildings back on their feet,

but with this initial support, some projects (e.g. Hebden Bridge Town Hall,

Pocklington Arts Centre) have become self-financing.

All the projects visited had, in their recent history, set up new charitable

governance arrangements to manage the building, such as a charitable company

limited by guarantee, development trust or community partnership.

Diversity of uses is essential to ensure several income streams – most projects

have a mix of commercial, public sector, third sector and community users;

anchor tenants with 5-10 year leases; large and small spaces available for one-


off hire, including business spaces such as meeting rooms or hot desks; and a

café and/or bar to support events and activities.

Centres that have the cinema facilities to screen ‘live’ national events (e.g.

theatre, ballet, opera sport) have found this to be a popular and profitable source

of income.

4. Future uses of the Civic Centre

Previous studies have considered a range of future uses for the Civic Centre but

none has specifically focused on the full potential of the large upper hall: this is the

unique feature of the Civic Centre, not available elsewhere in the town, with the

potential to seat 400 and function as a flexible multi-purpose auditorium. The

feasibility study proposes this as the central use of the building, along with a range of

uses of other spaces to provide additional /complementary income streams.

4.1 The Auditorium / Event Hall

The upper hall /auditorium is the most significant space in the building and the

largest public space in Otley. Sadly, because of fire safety and access issues, this

space was not used to its full capacity for more than 20 years before the building

closed in 2010. A fully accessible auditorium, equipped to appropriate fire safety and

technical standards, complemented by dressing rooms, catering and bar facilities,

with a large public foyer at the entrance to the building, outside pick-up/drop off area

and clearly identified additional parking (see 9.5) would transform the viability of the

building.

Re-designed as a flexible multi-purpose space with retractable bleacher seating, and

vigorously promoted and marketed as an arts and entertainment venue, this space

could within 5 years generate around 78% of the annual income required to cover the

costs of running the building (Section 7 shows how this is calculated).

The goal is to generate a wide range of entertainment, arts and community events,

programmed right through the year:

Commercial: e.g. antique fairs, craft fairs, wedding fairs

Arts: e.g. festival events, touring theatre productions, cinema, brass bands, folk

bands, rock bands, tribute bands, Otley Folk Festival, Otley Brass Band, Otley

Chamber Orchestra


Community: e.g. young teens discos, tea dances, amateur theatre and

pantomime productions, fitness activities, public meetings, community

consultations and exhibitions, wedding receptions, birthday parties

4.1.1 Cinema

From the initial public consultations on the future of the Civic Centre, one of the most

frequent suggestions was that a cinema should be provided in the building.

The Centre potentially allows two options for showing films:

1) In the refurbished main hall, where a roll-down screen could be installed at the

front of the stage, and projection facilities installed on, and managed from, the

balcony; or

2) In a new purpose-built theatre elsewhere in the building.

The first is the recommended option because the theatre is already in place, with the

capacity for a 7 metre ‘big screen’ experience and enough audience capacity to be

economically viable. Only one space is feasible for the second option, but this space

is too small to install digital equipment and be economically viable on its own.

Otley already has a Film Society which has been operating successfully and

expanding for 14 years. For the past 7 years it has hired The Courthouse to show its

films, but is in fact completely independent. Its programme features mainly foreign

language and 'arthouse' movies, with occasional popular mainstream films.

It is proposed that a cinema in The Civic Centre would screen an almost entirely

mainstream programme and provide Otley residents with an alternative to having to

travel for miles to see popular recent releases on a big screen. Because of its size, it

would also be able to screen National Theatre Live (NTL) productions, and other live

drama, opera or sporting events. Initial inquiries to NTL have received a positive

response.

The aim would therefore be to complement and not compete with the Courthouse

film offer. Information from other venues suggests this ‘big screen’ approach can

even stimulate interest in and help grow audiences for less mainstream films and

smaller local venues.

Full details of the cinema options and likely costs are set out in Appendix 6.


4.2 Other uses of space

4.2.1 Long term tenants

Some continuity of income will need to be secured through ‘anchor tenants’, that is

organisations who will take a 5–10 year lease on part of the space in the building, at

a realistic rent for the space occupied.

East Street Arts has expressed interest in a 5-10 year lease of studio space for

people working in the creative sector (e.g. artists, musicians, writers). Such a tenant

would provide a good fit with the goals of the building. (See 7.3 for details.)

The Working Group would also welcome further discussions with the Museum on

their possible occupancy of part of the building.

4.2.2 One off room booking: function room / office space / hot desk to hire by

the day / hour

Several venues visited offer spaces for short term hire to small businesses, home

workers and other users who need occasional office or meeting room space:

one-off room booking – function rooms for one-off meetings or events, hired by

the hour or day and available throughout the year

hot desks / small meeting rooms for home workers wanting access to a

professional environment or small businesses in need of occasional office space /

meeting rooms.

Further discussions with local business networks may identify a need / demand for

more specific business support facilities in what will become a prestigious setting,

along the lines of those now offered by Hebden Bridge Town Hall Trust.

As well as one off booking, Hebden Bridge Town Hall also offers ‘virtual membership’

for small businesses or homeworkers, for a monthly fee. The top level of membership

consists of:

the Town Hall as the business’s postal address, handling incoming post providing

a ‘pigeon hole’ for correspondence


access to a business development programme

super fast, reliable wi-fi over a fibre optic line

secure fob access to the building during office hours

reduced cost hire of function rooms

hot-desk lounge

secure bike lock up

a ready-made network of businesses

access to an active programme of business development and networking events

which take place across the year.

4.2.3 Café and Bar

Other venues visited have a café and/or bar which is an important publicly accessible

focus of activity for the building and a subsidiary source of income. Arrangements

vary from an in-house service to franchise or lease. It is proposed to create and

lease the café/bar area initially, subject to review. (See 7.2)

The aim is to create a catering offer that complements rather than competes with

other businesses, and that supports and promotes the local ‘food web’. In 2012, a

CPRE study to map Otley’s local food web noted that ‘the wide variety of local foods

on offer in the town, its range of outlets, suppliers, a weekly livestock market and a

highly successful farmers’ market connect Otley to the local countryside. The outlets,

which include market stalls, award-winning butchers and bakers, and a cake and

sweet shop, add to the character, vitality and distinctiveness of the historic centre.’

The CPRE survey found that there is good access to locally sourced, fresh, high

quality food form a range of outlets, supported by over 85 suppliers within 30 miles.

70% of outlets sourced their produce locally.

The aim is for a carefully designed café and bar service that could help address two

of the challenges identified by CPRE:

the benefits of local food need to be promoted to local shoppers to encourage

more demand locally, and also to the tourists who visit Otley and the surrounding

area

independent outlets need marketing support ….12

The Café and Bar could be an excellent vehicle to showcase Otley’s independent

food and drink retailers, market / farmer’s market traders and local food suppliers,


with offers such as: “This month’s guest sausage/pork pie/ostrich

burger/loaf/cake/house wine/local beer/supplier of organic vegetables.”

4.2.4 Community use

A core aim is that the auditorium and other spaces will be available for community

use at affordable rates. This will need to be carefully balanced with income-

generating uses.

4.2.5 Marketing and promotion

The proposed new uses for the building will require a vigorous marketing and

promotion strategy, and experienced staff to put the plan into action. A total of

£47,000 per year is allocated for full time staff to market, promote and manage the

Centre and a marketing budget of £15,000 is allocated in the first year. (See 7.3 and

Appendix 2)

4.2.6 Staffing

The quality and experience of staff will be crucial to establish a financially sustainable

multi-purpose venue. Two full time posts are proposed:

Business and Creative Director

Centre and Volunteer Coordinator

and the following part time staff:

Front of House Staff

Door Security (for some events)

Technical Staff (for some events)

Cleaners

In addition it is assumed that a team of volunteers will be recruited to help with

activities such as stewarding and reception, and will be paid travel and out of pocket

expenses.

The annual cost of these staffing roles is estimated at £65,000 in Year 1 (including

training and development), rising to £109,000 in Year 5. Details of staff job

descriptions are set out in Appendix 3.

4.2.7 Partners / stakeholders / sponsors

When the business case has been accepted, it will be essential to build strong links

with potential partners, stakeholders and sponsors. The success of the building will


depend on buy in from the local community and businesses. Other venues visited

have developed a wide range of collaborative relationships for mutual benefit, such

as:

Educational / learning partnerships with college departments, young people’s

services, local schools

Partnerships with business tenants and business support networks

Special deals with local pubs, restaurants (e.g. discounted pre-show meal or

drink) and food retailers (e.g. guest local brewery beer in bar, guest butcher

produce in café)

Exhibition space for local artists

a showcase for local businesses, public sector and voluntary and community

organisations to publicise what they do

Advertising opportunities for local sponsors at events, in event publicity, on

named theatre seats, brass plaques, role of subscribers, etc.

5. The building’s ownership and management structure13

5.1 Current ownership, asset transfer or lease

The building is owned by Leeds City Council. The City and Town Council will need to

agree the ownership, governance and management arrangements for the building

once it is refurbished, and the point at which transition to the new arrangements

should happen. Two options have been suggested:

Option 1: LCC passes ownership of the building over to Otiey Town Council on

completion of the refurbishment.

Option 2: LCC leases the building long-term to Otley Town Council for a

peppercorn rent.

Whichever option is agreed, it is assumed that responsibility for the future

management of the building will pass to the Town Council. The City and Town

Councils will need to agree an appropriate legal and management structure for this to

happen. The Town Council is keen to protect the use of the building into the future

for the benefit of the local community. Its preference is for an arms length and

politically independent legal structure to allow the project to:


develop partnerships where possible with other groups and organisations, in

order to maximise use of the Centre so it contributes to the economic life of the

town

access sources of funding not available to the town council as a public sector

body

achieve the most beneficial status for VAT and business rate liabilities.14

5.2 Options for an arms length organisation

The ideal would be an existing local organisation willing to take on ownership

of the Centre. So far none has emerged. The Town Council has had

constructive discussions with Otley Courthouse and Otley Town Partnership,

but neither organisation wishes or has the capacity to take on the project.

The main options for a new legal entity to take responsibility for the building are:

1. Company limited by guarantee, with charitable status

2. Charitable Incorporated Organisation (CIO): this new form of legal entity

designed for non-profit organisations in the United Kingdom became available

in March 2013

3. Dual structure – company limited by guarantee with charitable status OR CIO,

and a trading subsidiary company

4. Community Interest Company (CIC)

5. Industrial and Provident Society (IPS)

6. Development Trust (community based partnership company involved in

regeneration – can be a limited company, charity, CIC or IPS).

The Pulse Report 2008 discussed the pros and cons of all these options, apart

from option 2 which did not exist at the time. Initial discussions by the current

Working Group suggest that a charitable company limited by guarantee, CIO

or development trust would be most appropriate. Further evaluation of the

legal and financial implications of these two preferred options will be required

at the next stage.

5.3 Transitional arrangements

The Town Council will need to negotiate transitional arrangements with Leeds City

Council. The key questions to resolve are:

http://en.wikipedia.org/wiki/Incorporation_(business)

http://en.wikipedia.org/wiki/Non-profit_organisation

http://en.wikipedia.org/wiki/United_Kingdom


What is the optimum point in the regeneration project to make the transitional

arrangements?

Will a new or alternative legal form needs to be established from the outset?

Which organisation (i.e. LCC, OTC or charitable company) will:

project manage the construction/refurbishment works?

deal with funding obligations?

recruit and employ staff?

set in place relevant financial and operational systems?

5.4 Future governance

If the Town Council opts for a charitable company / development trust to run

the building, members of the company and the Board of Trustees will need to

be recruited.

Members of the company

A company is owned by its members. The first members of the company are

the subscribers, who sign the original Memorandum and Articles of Association

as part of the incorporation process. The Articles specify how additional

members are admitted.

Membership should preferably acknowledge capital contributions to the

development costs of the Civic Centre. However, legal restrictions prevent a

local authority from owning more than a 20% in a company.

Potential members could include, for example, representatives of Otley Town

Council, Otley Town Partnership, Otley Courthouse and other arts

organisations, Chamber of Trade and Rotary Clubs, user group and tenants

representatives, local community representatives, and other potential partners,

for example key agencies or businesses in the area.

Company Board

A company requires a board of directors, and if charitable status is chosen

then the directors will also become the Trustees of the charity. The Directors

are the individuals who are responsible for running the company in line with the

wishes of its members. The Town Council or eventual Project Steering Group


may wish to form a shadow Board to oversee the development process, before

the final board is recruited and established.

Size - The Board needs to have enough members to represent a range of

viewpoints, but should also be small enough to make decisions quickly and

effectively – say, 8 to 10 people.

Representation – the Board should adequately represent the different

partnership and stakeholder interests.

Skills – The Board will need legal, financial, enterprise development, asset

development, human resources, marketing and funding skills.

Training – Board members should receive appropriate training and updating,

informed by a skills audit and training needs analysis.

The Working Group recommends that the recruitment process for the Board is

fully transparent.

A subsidiary trading company, if required, would need its own board, which

could have some of the same members, but not all.

6. The preferred option for future development

Work so far on the feasibility study suggests that an appropriate architectural

response to the requirements of the proposed uses would be along the lines of “The

preferred option for development”, ( Appendix K in the Pulse report, and for reference

at Appendix 4 to this report). The Pulse report also sets out in its section 12 a

narrative of what this preferred development option will achieve, and further design

development work which will be required at the next stage. The scope of this study is

not to take the design further than previous studies. The conclusions of those

studies, however, demonstrate that the refurbished building can support the uses set

out in this report.

Detailed development of the business plan will lead to development of the

architectural brief and may require review of further options for the refurbishment.

These would be no more inherently expensive than the previously costed options.

There may even be opportunities for saving money on some aspects of previous

options.


6.1 Town planning

External alterations to the building will need Planning Consent, however it is not

envisaged that a change of Planning Use Class will be required for the range of uses

proposed in this report.

6.2 Conservation

As the building is listed, a Listed Building Consent Application for the proposed

refurbishment and alterations will be required at the appropriate stage. Initial

comments from English Heritage obtained by J.M. Witherick Associates on the

“preferred option for development” were supportive15, and it is confidently predicted

that an appropriate scheme will attract support from the Leeds City Council

Conservation Officer and English Heritage.

The listed building will be put to the most appropriate use, continuing the purpose for

which it was designed.

6.3 Building regulations

The refurbishment will require Building Regulations Approval, and again, initial

consultations carried out on the “Preferred option for development” with Leeds City

Council Building Control and West Yorkshire Fire and Rescue Service concluded that

the proposals were acceptable in principle, and most importantly the revised means

of escape from the main auditorium will increase maximum capacity to over 400.

6.4 Access issues

One of the most attractive aspects of the “Preferred option for development” is that it

includes a disabled access lift in the front foyer. This will mean that access to the

auditorium will be possible via the same route for all users regardless of mobility. The

most attractive way into the auditorium for all audiences is direct from the front

entrance, and the “Preferred option” shows that this can be made a very attractive

space, transforming the experience of all users.

A further lift is also provided at the rear of the building, accessing all levels. This will

enable service as well as passenger access, which is likely to be key to the

functioning of the auditorium for theatre and musical productions for scenery, props

and equipment.


6.5 Environmental sustainability

In future design stages, the brief for environmental sustainability enhancements will

be developed within the constraints of the listed status of the building, and where

cost benefits analysis shows favourable pay-back times. Opportunities will be taken

wherever possible to improve thermal and acoustic insulation of building elements,

and plant and services systems will be selected for efficiency.

As in any refurbishment scheme, the savings on embodied energy over a new-build

option weigh heavily in its favour.

6.6 Theatre Report (2008)

The Pulse report contained notes prepared by the Theatre Consultant

Theatresearch, which identified key issues, opportunities and constraints regarding

future development of the auditorium for a number of performance types. The

conclusion of this initial study was “The new proposals which have been developed

to date will clearly make a dramatic improvement to the of the building. There is an

opportunity to create a very interesting, exciting and vibrant space within the existing

historic building and the design work to date demonstrates the significant potential

which the building has to offer.”

The scope of this study has not allowed further specialist input, however it is believed

that the uses identified can be supported by a appropriately designed adaption of the

existing space along the lines identified in the preliminary Theatresearch study.

A key aspect of the next stage of the design and brief preparation process will be to

engage with theatre/auditorium design specialists to ensure that all identified uses

are optimised.

7. Revenue projections

7.1 Financial sustainability

This feasibility study explores the financial sustainability of Otley Civic Centre as a

vibrant arts, entertainment and community venue. In the past the Civic Centre has

suffered from underuse and the lack of sufficient revenue to fully maintain the

building. This has resulted in material degradation over the years and led to the

current situation where the building requires a full multi-million pound refurbishment.


Although this study focuses on revenue and not capital costs, it aims to demonstrate

that, once refurbishment is completed, the mistakes of the past can be avoided, and

shows how a more ambitious vision for the building can provide it with a sustainable

future requiring minimal ongoing subsidy from external sources.

Three central assumptions underpin the financial analysis:

The upper hall/auditorium is the most distinctive feature of Otley Civic Centre. It is

the largest public performance space in Otley and has the potential to host a wide

range of significant entertainment, arts and community events (see 4.1). This

study therefore looks to maximise the potential of the auditorium and replicate the

success of similar buildings and event venues across the UK (see 3.1). It is

estimated that the auditorium – with the use of supporting facilities/adjoining

rooms – can generate 78% of total annual revenue by Year 5. This is a realistic

projection supported by robust evidence (see 7.2 and Appendix 1).

A clear lesson from similar venues (see 3.2) is the importance of mixed use to

avoid financial shocks or overoptimistic projections. The deliberate intention is

that the main auditorium will provide a wide range of mixed daytime, early

evening and evening events for a number of different audiences/markets. The

other spaces in the building are configured to generate several different revenue

streams, including anchor tenants (such as East Street Arts), room hire, office

rental, and the café/bar lease.

Financial sustainability is a central aim. A realistic budget has been allocated to

ensure that the building’s fabric, services and finish can be maintained over a 30

year lifecycle. This will prevent the need for further public subsidy at a future date

and will remove the burden of maintenance responsibility from Leeds City

Council.

7.2 Income and expenditure summary for first 5 years

The table below summarises projections for the first 5 years following refurbishment.

The assumptions underpinning the income figures in this summary are set out in 7.3;

assumptions underpinning each line of expenditure are set out in Appendix 1.

Appendix 1 also contains an extended version of this Summary spreadsheet,

showing the income and expenditure projections over a 30 year lifecycle.


Annual Income Year 1 Year 2 Year 3 Year 4 Year 5

The Auditorium 53,700 125,300 143,200 161,100 179,000

East Street Arts 4,875 9,750 9,750 9,750 9,750

Room Hire/Letting 6,883 16,061 18,355 20,650 22,944

Friends/Sponsorship 2,000 2,000 2,000 2,000 2,000

Café/Bar Lease 5,500 12,000 13,000 14,000 15,000

Annual Expenditure

Staffing

Business and Creative Director 30,252 30,252 30,252 30,252 30,252

Centre and Volunteer Coordinator 16,740 25,111 25,111 25,111 25,111

Front of House Staffing 5,385 12,565 14,360 16,155 17,950

Volunteer Expenses 500 1,200 1,300 1,400 1,500

Door Security 1,944 4,536 5,184 5,832 6,480

Technical Staff 2,520 5,880 6,720 7,560 8,400

Cleaners 5,824 13,104 14,560 16,016 17,472

Overheads

Utilities 14,000 28,000 28,000 28,000 28,000

Rates 2,000 4,000 4,000 4,000 4,000

Insurances 5,000 10,000 10,000 10,000 10,000

Licensing 1,000 2,000 2,000 2,000 2,000

Security/CCTV 1,250 2,500 2,500 2,500 2,500

Fire Equipment 1,500 3,000 3,000 3,000 3,000

Refuse Collection 2,500 5,000 5,000 5,000 5,000

Pest Control 175 350 350 350 350

Public Consumption Costs

Hygiene Consumables 1,000 2,500 3,000 3,500 4,000

Administration

Hospitality 2,000 1,500 1,000 1,000 1,000

Travel/Subsistence 750 1,500 1,500 1,500 1,500

Petty Cash/Incidentals 500 1,500 1,500 1,500 1,500

Training and Development 2,000 2,000 2,000 2,000 2,000

Annual Audit 1,750 1,750 1,750 1,750 1,750

Accountancy 1,000 2,000 2,000 2,000 2,000

Recruitment Costs 2,000 1,000 500 1,500 500

Marketing & Publicity 15,000 10,000 10,000 10,000 10,000

Ticketing 1,500 3,000 3,000 3,000 3,000

Telephone System & Costs 1,000 2,500 2,500 2,500 2,500

Printing, Postage and Stationary 700 3,000 3,000 3,000 3,000

Photocopier Lease 1,000 2,000 2,000 2,000 2,000

Office Equipment 5,000 1,500 1,500 1,500 1,500

Legal & Professional 750 1,500 1,500 1,500 1,500

Finance

Loan Repayment 15,507 31,014 31,014 31,014 31,014

Sinking Fund 0 0 0 18,815 18,705

Repairs & Renewals

Decorations 0 0 0 0 0

Fabric 0 4,839 9,239 9,679 11,879

Lift Maintenance 0 3,000 3,000 3,000 3,000

Cinema Maintenance 0 1,500 1,500 1,500 1,500

Financial Summary

Total Annual Income 72,958 165,111 186,305 207,500 228,694

Sinking Fund Withdrawal 0 0 0 0 0

Transfer from Otley Town Council 69,089 59,990 47,535 51,934 37,169

Total Annual Expenditure 142,047 225,101 233,840 259,434 265,863

Balance 0 0 0 0 0


7.3 Income and expenditure assumptions

Income/Expenditure Timeline

The financial analysis assumes Otley Civic Centre will not reach its full revenue

generating potential until Year 5. As the venue builds a reputation over this period

and establishes regular audiences, both locally and regionally, it is expected that

occupancy rates for the building will reach approximately 72% in Year 5 (see

Appendix 1). Otley Town Council will play a key role in years 1-4 by providing the

necessary financial support required to make the Civic Centre viable on an ongoing

independent basis.

The proposed timeline assumes that Otley Civic Centre will not open or generate

revenue until the midpoint of Year 1. During the first six months of Year 1 – whilst the

renovation work is nearing completion – there will be costs associated with preparing

the building for opening. It is expected that the Business and Creative Director will be

in post for six months before the building opens, and during this period will develop a

programme of events; marketing strategy; marketing and publicity material (including

a website); and oversee other necessary arrangements for Otley Civic Centre to

successfully launch. The Centre and Volunteer Coordinator will be employed two

months before opening to build a pool of volunteers and provide more general

support before the official opening. The income and expenditure lines in Year 1

therefore both reflect the revenue/cost implications of a mid-year opening date.

Year 1 Year 2 Year 3 Year 4 Year 5

Additional Assumptions

The figures used in this financial summary do not account for inflation. It is

assumed that inflationary rises will have a proportionate impact on both income

and expenditure.

The preferred architectural design from the 2008 Pulse report is used to consider

the layout of the building and the use of specific rooms.

It is anticipated that Otley Town Council will provide an ongoing subsidy to Otley

Civic Centre. By Year 5, when the event hall reaches around 70% occupancy,

this subsidy will more or less equate to the repayment of interest and capital on

70% occupancy Centre launch

Revenue generation


the Public Works Loan Board loan. Otley Town Council could, however, provide

ongoing support to account for any unexpected shortfall.

7.4 Annual revenue projections – summary

A full breakdown of annual revenue projections is set out in Appendix 1. By Year 5 it

is projected that total annual income will be £229,494 – this income will be

supplemented by a transfer from Otley Town Council to cover the Public Works Loan

Board loan repayments and a small amount of annual shortfall (between

approximately £2,000 and £5,000 per annum from Year 5). The following sections

provide the necessary context and overview for each revenue line in turn.

The Auditorium/Event Hall

To develop a broad revenue that will fit with the managing organisation’s charitable

aims and to enable it to maintain and repair the building, it is assumed the events

auditorium will offer a wide range of both commercial and community events and

activities. Diversity means the venue will not be dependent on any single income

stream and can refine its offer over time.

Initially, audiences for these diverse events and activities will need to be built, and

some commercial activities may prove more sustainable than others in the longer

term. Based on events offered in similar buildings (see 3.1), the following range of

events appears feasible by Year 5:

Group 1: Music

Group 2: Theatre, Performance & Cinema

Group 3: Speakers & Comedy

Group 4: Community Events

Group 5: Private Room Hire

Group 6: Sport & Leisure

Group 7: Weddings

Group 8: Markets & Fairs

A full Auditorium / Event Hall schedule and revenue generating outline for these

different types of use is set out in Appendix 1. These events and activities have been

scheduled after a realistic assessment based on local factors and review of event


schedules at comparable venues (see 3.1). The detailed evidence in Appendix 1 is

central to the revenue projections produced by this study.

For Year 5 the occupancy rate for the event hall is estimated at 72%. We have

assumed that 100% occupancy would be use every morning, afternoon and evening

throughout the year excluding 60 days (52 Sundays and 8 bank holidays) which

equates to 305 days x 3 sessions per day. This would be a total of 915 sessions. We

have estimated 662 in Year 5 (or 72%).

This does not rule out events on Sundays and bank holidays, if there is demand for

events that can break even or generate income.

Not all of the programmed events and activities will cover an entire ‘session’ (i.e. a

full morning, afternoon or evening). Certain activities can be scheduled around one

another. For example, the auditorium might be used for an hour-long exercise class

on a Tuesday, between 6-7pm, before conversion into a cinema for a film screening

at 8pm.

Based on this schedule of events and details of revenue generating potential (see

Appendix 1), it is estimated that by Year 5 the auditorium will be generating a total of

income of £179,000. Assuming that it this occupancy and revenue figure will be

gradually built up over a period of five years, the Year 5 revenue projection and

occupancy rate has been decreased by 10% a year backwards to Year 1. Assuming

the Year 5 occupancy rate of 72%, this produces the following revenue and

occupancy projections for Years 1-5:

Occupancy Rate

Revenue Projection

Year 1* 21.60% £53,700

Year 2 50.40% £125,300

Year 3 57.60% £143,200

Year 4 64.80% £161,100

Year 5 72.00% £179,000

* Year 1 is reduced by an additional 50% to reflect that Otley Civic Centre will not be open for six months of the first budgeted year.

East Street Arts

After initial meetings and a site visit to Otley Civic Centre, East Street Arts have expressed

interest in a 5-10 year lease of rooms G3, G4A, G4B and the Consultation Room for studio


spaces. An annual lease rate has been discussed at £6.50 per sqft plus a £0.32 per sqft

service charge. This represents a total annual income of £9,750 (see Appendix 1 for a

breakdown of this figure).

Another option the Working Group would be keen to explore is use of space in the building by

Otley Museum, if the Museum could afford a similar rent/ service charge. Their use of the

space would fit equally well with the aims of the building.

Room Hire/Letting

Rooms G1, G2, F1, F3A and F3B will be multi-use rooms, either to be hired out on

an hourly basis or on a more permanent letting basis. Potential uses include office

letting, community or commercial hire use (e.g., one-day conferences, training

events), or more imaginative ideas (including the hot desking business lounge).

Given the mixed use of these rooms, based on hourly hire and permanent leasing, it

is not feasible to estimate an occupancy rate for these spaces. Instead, the aim will

be to generate an income for these spaces comparable to a commercial lease rate,

estimated locally to be set at an annual rate of £12 per sqft (including all service

charges). This does not assume a 100% occupancy rate, but is based on the

principle of a mixture of both hourly hire and permanent leasing. This therefore

represents an annual income of £22,944 in Year 5. Assuming that this revenue figure

will be gradually built up over a period of five years, the Year 5 revenue projection

has been decreased by 10% a year backwards to Year 1. Assuming the Year 5

revenue rate of £12 per sqft, this produces the following revenue projections for

Years 1-5:

Revenue Projection

Year 1* £6,883

Year 2 £16,061

Year 3 £18,355

Year 4 £20,650

Year 5 £22,944

* Year 1 is reduced by an additional 50% to reflect that Otley Civic Centre will not be open for six months of the first budgeted year.

Friends/Sponsorship

A key responsibility of the Business and Creative Director will be fundraising, through

grants, sponsorship, donations and partnerships (see 4.2.7, and 8). Similar projects

elsewhere use many different ways to encourage sponsorship and donations from


businesses, individual philanthropists and members of the community, including a

‘Friends of….’ subscription programme. A conservative figure of £2,000 generated

from Friends or sponsorship schemes has been used at this stage, but it is expected

that this figure will be higher in practice.

Café and Bar Lease

The Café and Bar lease would need to be negotiated and agreed with any potential

proprietor. It is hoped that the lease would be tendered first to existing Otley

businesses with a track record of offering a quality product and service, and on the

development (initially in competition) of a detailed proposal and Business Plan for

these services.

However, based on revenue projections for a Café and Bar (see Appendix 1)

providing a range of services, from cinema snacks, pre-theatre meals and lunches

through to a lucrative bar service during events, a lease figure of £15,000 has been

reached. This would cover full use of the kitchen, main café/bar area and the upstairs

relief bar. Business rates and insurances would be covered independently by the

proprietor, and terms of service would be drawn up to ensure the café/bar facility

properly supports the events programme during both quiet and busy periods.

Assuming that footfall for the Café and Bar would be steadily developed over years

1-5, the lease rate has been increased incrementally upwards from Year 1. Break

periods would be written into the lease so that the terms can be periodically

reviewed, to ensure the lease has been set at an appropriate rate and that

performance targets for service delivery against a number of quality indicators have

been met.

7.4 Annual expenditure projections – summary

Appendix 1 gives a full description and breakdown of individual expenditure lines for

Years 1 to 5 in the Summary table above. By Year 5 it is projected that annual

expenditure – including the Public Works Loan Board loan repayment – will be

£265,863.

Appendix 1 has an extended version of the Summary spreadsheet in 7.2, and sets

out the income and expenditure projections for a 30 year lifecycle.


8. Funding opportunities and strategy

The feasibility study shows that the building will run at a deficit in the first few years,

but by around Year 5 and thereafter the deficit will equate to the repayment of the

Public Works Board loan.

Funding opportunities are scarce in the present economic climate but once the

business case is accepted, the second stage of the business plan should identify

sources of funding that will support specific aspects of the project’s development,

and help to reduce the revenue gap. This work will become the responsibility of

Trustees and the Business Director once in post. Funding is likely to be in form of

small grants, loans, donations or sponsorship from a range of sources such as:

National cultural and heritage funding bodies, e.g. Arts Council England, Heritage

Lottery Fund

Smaller charities that support arts, cultural and heritage projects, e.g. Esmee

Fairbairn

Programmes to raise funds from individual and corporate giving, e.g through

‘Friends of’ subscription schemes, donations and sponsorship.

9. Risk assessment

The most significant risk to the future of the building is that the refurbishment project

will fail to secure the required levels of capital funding. Capital funding is, however,

outside the remit of this revenue feasibility study and will be addressed separately.

This section considers the risks to successful income generation.

9.1 Public sector liability for cash flow difficulties

This feasibility study hopes to have demonstrated that Otley Civic Centre will require

minimal ongoing subsidy from an external source; however, it is highly likely that

small levels of support in the form of a subsidy or grant will always be required in

some form. It is proposed that Otley Town Council accept responsibility for the

building, including through provision of an ongoing or unexpected subsidy. Otley

Town Council has provided this level of support in previous years and will be able to

do so in future if necessary. This arrangement should be guaranteed through a

leasing contract whereby Otley Town Council commits to a fully maintaining lease

and then sublets Otley Civic Centre to a charitable trust that will run the building (see

5.4). Before committing to this agreement, as part of its own internal risk


assessment, Otley Town Council would need any final business plan and leasing

contract to be reviewed by an external auditor.

Otley Town Council would also commit to the higher levels of support required by

Otley Civic Centre during Years 1-4. In preparation for this subsidy, Otley Town

Council is already in the process of building substantial capital reserves, which are

projected to be £38,000 by 2014/15 and rising significantly every subsequent year.

This will prevent the need for a precept rise to cover a subsidy to run the building

during Years 1-4.

9.2 Lack of capacity to take the project forward

Otley Town Council does not have the capacity in-house to promote, market and run

the building as a major events venue. The lack of capacity will be addressed by:

establishing a charitable company with an independent board of Trustees, so

there is a dedicated governance body

creating the posts of Business and Creative Director and Centre Manager, to

provide essential capacity in the short term, promote and market the venue, and

develop an infrastructure of technical, cleaning and other paid staff, and volunteer

team.

9.2 Lack of demand for proposed uses

There is a risk that there will be a lack of demand for some of the uses outlined for

the events hall. This risk will be reduced by:

adequate consultation to ensure local buy in

appointing the Business and Creative Director, answerable directly to the new

board, six months before the building opens, to research, plan and promote an

events programme from the first day of opening

allocating an adequate marketing budget, and developing a robust marketing

strategy, commissioning an audience building consultant if necessary as part of

the strategy.

creating a diverse programme of commercial and community events, so the

venue is not dependent on any single type of use. The diversity will enable the

management/marketing team to learn about demand for different events and

programme accordingly.


9.5 Lack of car parking

A safe drop off area at the front of the building and signed, accessible car parking will

be essential. There are various public and private car park areas within the vicinity of

the Centre: at the Maypole area opposite the building (LCC), White Swan (private),

Otley Rugby Club (private), The Lix (LCC), Walkergate (LCC) and possibly (for larger

evening events) arrangements with Asda and Sainsbury’s. Part of the next stage of

the business plan should be development of a parking strategy and negotiation,

where possible, of mutually beneficial arrangements with owners of those parking

sites.

9.6 Failure to get local buy in

This risk will be reduced by a second round of more detailed consultation with the

local community, local businesses, and potential partners, users and supporters, as

flagged up in 0.3 and 2.4.

10. Action plan

Once the business case is accepted by Leeds City Council, the next tasks are likely

to be:

widen membership of the Working Group will if possible to access input from

other interested parties and areas of expertise

work with Leeds City Council and other stakeholders to refine the draft feasibility

study

carry out in-depth consultation with all stakeholders and potential users to inform

the final architectural brief. This will lead to an updated cost estimate. Further

iterations of brief and proposal may be required to achieve a final proposal within

agreed budget.

work with the City Council to finalise the capital costs and identify sources of

funding for the capital programme

produce a project timetable.


11 Conclusion

Please be aware this is a FIRST DRAFT of the revenue feasibility study and is

presented for discussion. It will require further development and refining in the light of

ongoing research and feedback from ‘critical friends’ who have agreed to review it.

The Working Group is also making the draft public because we welcome discussion

and constructive critical comments from all interested parties. There are at this stage

quite a lot of unknowns, and some of those are, in the words of Donald Rumsfeld,

‘unknown unknowns – there are things we do not know that we don’t know.’ The

success of a project like this depends on public support, and that cannot happen

without offering access to all the information we DO have, and inviting open debate.

1J.M. Witherick Associates (Charatered Architects) (2005) Feasibility study for Otley Civic Centre.

2 Pulse Regeneration, (2008 )Otley Civic Centre Development Plan.

3 Data is taken from Leeds City Council/NHS Leeds, 2010 Population Acorn profiles for MSOAs

E02002333Otley and E02002332 Otley and Newalls/Weston Lane

http://westyorkshireobservatory.org

4 As above.

5 Leeds City Council/NHS Leeds, Area Profile, Outer North West Leeds, 2010 Population Acorn Profile,

p.13 http://westyorkshireobservatory.org

6 See http://gregmulholland.org/en/page/greg-mulholland-business-survey-2013

7 Pulse Regeneration, (2008 ) Otley Civic Centre Development Plan, 6.1 ‘Offices’, p.18

8 The history of the Hebden Bridge Town Hall development and the HBCA business plan is available at

www.hebdenbridgetownhall.org.uk

9 Centre for Economics and Business Research, The contribution of the arts and culture to the national

economy, May 2013, p.89.

www.artscouncil.org.uk/media/uploads/pdf/CEBR_economic_report_web_version_0513.pdf

10 See more at: http://www.artscouncil.org.uk/advice-and-guidance/browse-advice-and-

guidance/contribution-arts-and-culture-national-economy#sthash.dnQ9IjC9.dpuf

11 Local Government Association (2009) Investing in creative industries: a guide for local authorities,

p.1

12 Campaign to Protect Rural England, From food to fork: OTLEY, Mapping the local food web, p.3

available at http://www.cpre.org.uk/resources/farming-and-food/local-foods/item/download/2014

13 Section 5 updates suggestions in the Pulse Regeneration Report 2008.

14 See Pulse 2008, Section 13

15 See 1.

http://www.artscouncil.org.uk/media/uploads/pdf/CEBR_economic_report_web_version_0513.pdf

http://www.cpre.org.uk/resources/farming-and-food/local-foods/item/download/2014

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