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Rates top Mayor's business agenda

By Herald Express  |  Posted: November 01, 2012

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TORBAY Mayor Gordon Oliver has met with Local Government Minister Eric Pickles. It may have had a huge impact on the future of our town centres and could be the difference between life and death for some of our shops. Rates was up for discussion. Here's where some of you may switch off. Rates? Shops? Business? What has that to do with me?

Ultimately it will be you who will suffer.

Shop rates have always been a thorny subject for many traders in Torbay and there have been some success stories recently where businesses have successfully challenged and appealed against how much they pay.

The main problem is rates, which are linked to rents, were last reviewed by the Government in 2008. Business was booming at the time, rents were high and so, too were rates.

The market place is now a totally different beast. Trade has dipped to put it mildly and, in some cases, so have rent levels. But what shopkeepers have to pay every year with rate demands have not.

The business community was hoping to see some light at the end of the tunnel with a rates review planned for 2015. Now they have been hit by the bombshell news from the Government that the shake-up has been delayed until 2017. That for many will be the final nail in the coffin.

John Doherty has run his Dot's Pantry shop in Torquay for the past 18 months. He is also chairman of the Torquay Business Improvement District steering group and an expert and campaigner on the rates issue as well car parking and policies.

He was asked to furnish Mayor Oliver with some information to take to the meeting with Minister Pickles.

He cites Government figures which claim that 40 per cent of High Street sales have been lost to the internet.

It comes as retail giants Argos have announced a phased shutdown of some of their stores, supposedly in favour of on-line shopping. Where the Torquay store fits in with that is not yet known.

John says: "Because the High Street trade is bad the rent reviews are on a downward trend. If rents are going down so should the rates. The effect of this review delay will see the rateable values artificially high for another two years."

How rates are set is hugely complicated and that's part of the problem. They are linked to the rentable value of properties which in turn is determined by retail zones in shops which are given levies per square metre.

There are some huge — and apparently unfair — anomalies.

John, who has spent a lifetime in the retail trade, has carried out research which shows that large national chains, including out-of-town superstores, have lower rate per square metre values than small shops.

He has also discovered that Union Square in Torquay town centre has to pay rates on its car park. There doesn't appear to be rates payable on the car park at the Willows out-of-town car park. All very weird.

John, a manager with Tesco for 34 years, highlighted the issue in a special presentation to Torbay Council back in May and focused on one out-of-town superstore and what he believed to be their last Christmas Week takings. He told the council: "I believe that they will have turned around between £2.8million and £3million. They did £2.3million in 2010.

"That will enable them to pay their entire rateable value from the sales in that one week. To use the same formula, Dot's Pantry would need 8.6 Christmas weeks."

I am not going to embarrass John by detailing what he pays in rent and rates, save to say it is a lot of money.

He says: "I have a pension. I have not taken any wages. If I took wages I would not be here. But I went into this new business knowing that I had a pension."

He had expected to see a 50 per cent increase in trade over the first two years of his business. In fact, it will have dropped by around 16 per cent.

He says: "The car parking has had an effect. The bad weather and the Olympics have had an effect. We have also been hammered by VAT."

It appears a price war over something as simple as a cup of tea has also erupted.

But he doesn't want to make his a sob story and he emphasises: "We are staying. We are fighting and we are going to be here."

He says car parking and rates were the two of the main problem areas highlighted in the Mary Portas review of town centres, but the problems still exist and there has been no help from the Government.

He is quick to acknowledge some of the steps being taken in Torbay where a new pay-on-exit car park in the town centre has been agreed and the council has embarked on promotions to lure shoppers into the town.

But he says: "They blame the banks, but local and central government have taken far too much for far too long. Now there is nowhere to take it from."

All he and the local business fraternity is asking for is a level playing field, especially with the retail big boys. Basing rates on what an outlet actually sells would do the trick.

If that was the case his rates would go down to around £3,000 and the rates of that Christmas Week-mentioned superstore would go up to between £8million and £9million.

John has also suggested to Mayor Oliver that he encourages Minister Pickles to talk to 'Mr Argos' about his plans to quit the High Street.

It could just be the straw that breaks the camels back for all of us. Empty shops will mean less money for the government, less money for councils like Torbay, less money for services and more need for cuts and increases in council taxes.

Happy days all around.

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  • reptor2456  |  November 01 2012, 11:21AM

    Torbay looks great now. Closed shops, drug needles, factory row scummers and dog poop.

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  • spindleshanks  |  November 01 2012, 9:25AM

    And before anyone says the Pavilion can't be moved, the Marine Spa in Torquay was dismantled and sold to Great Yarmouth in 1903 to be replaced by one mistake after another. Just think this whole harbourside development needs to be thought through and not rushed into. After all, an underground car park under the new Hotel/Spa is going to have a lot of soil that needs moving somewhere and why should the Pavilion play second fiddle to an hotel when it could become the star in Torquay's revitalised town centre. Get it right and investors and visitors will flock to the town, get it wrong and it could take over a hundred years to put right.

  • spindleshanks  |  November 01 2012, 9:04AM

    When is Torquay going to "use" one of the big boys in the grocery game to establish a Torquay town centre supermarket to claw back customers that are currently going to the Willows? Only once footfall in the town centre grows will retailers return to the town to even consider opening a business here. The problem of Torquay town centre is a local one, i.e. it is locals who are not using the town centre for their grocery shopping and who can blame them given what is on offer? Visitors to Torquay are happy to spend their money in any shops that are left open with something to sell. They don't see the shops that sit empty in the town as it is a problem that inflicts their own high street back home. Parking charges and parking penalty charges are similarly a local issue too. Can anyone living locally remember ever being fearful of a traffic warden when parked at the Willows? Conversely, I have yet to meet a holiday maker visiting Torquay whose first observation was the cost of parking. Newton Abbot town centre is busy and it has a major supermarket outlet in the town centre. Even Totnes, (despite recent hostility to one big brand), has at least two town centre supermarkets and is busy. Wake up Torquay - there is a lot that can be done to improve the town centre. To get the debate underway, here are a few ideas:- i. Move Pavilion to a newly constructed island in centre of Inner Harbour and retain the "Totnes-by-sea" retail experience within the restored building and allow restaurants/cafes to open out onto a waterside terrace around the building. The island would be served by pedestrian footbridges and one service bridge for vehicle deliveries. The soon to be announced proposed hotel/spa could be built on the vacated plot and to a lower height and incorporate children's play area on roof terrace. Unique in the UK. The Pavillion preserved in all its splendour and a purpose built hotel/spa that doesn't deface the seafront and harbourside. ii. Allow Fleet Walk to increase in height so that additional retail space can be created either on lower decks or on a roof terrace. Again unique in the UK. Fleet Walk would link to the new Pavilion complex. iii. Allow the harbourside through to Lower Union Street become the "Tourism Offer" free from buses and predominantly pedestrianised. Upper Union Street, served by good public transport and parking to become the part of town offering "essentials", i.e. grocery and other items that cannot be easily bought for day to day living off of the internet. iv. Allow town centre car boots/markets throughout the year (why not utilise our many multi storey under utilised car parks for the purpose). Mary Portas recommended such initiatives so why not? Over to other readers for their input or alternatively take a look at http://tinyurl.com/7ylfvsn and have a say before it is too late.

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