How the Money Works Part 2: Rock House

(See also Part 1: Hastings Pier: How the Money Works)

Until we as citizens understand ‘how the money works’ when it comes to developing land and buildings we will always be disadvantaged – land and buildings are where power is held. Without them the community sector will be forever undercapitalised.

I am not an expert in property finance, not trained or qualified. But I have first-hand development experience, professional curiosity, and an insatiable desire to work out new ways to make things happen. As traditional regeneration approaches – which I would argue never really worked for communities in any case – fell by austerity’s wayside we have been piloting new forms of community investment.

So I want to tell stories, not just about the impact of our projects on individual lives, on cultural and community activity, and on the local economy, but also about how they are financed so we can begin to demystify and democratise the development process. I do have an ulterior motive – ignorance leads to suspicion and I have sometimes suffer in my home town from rumours and bad-mouthing. I hope this goes some way to address that.

The story of Rock House is long and convoluted. Here I’m going to tell it purely from the perspective of the money that came in to make it happen.

Back in 2013, Meanwhile Space CIC (of which I was a founder but non-executive director paid £500 a

month for my input) had been awarded a grant of £230k from HCA as part of the voluntary sector strand of the Empty Homes Initiative. Initially this was for a project in Margate but after a couple of buildings fell through they looked at Dover. When that too fell through I convinced them to come looking in Hastings. First we considered taking on the defunct Hastings Trust buildings in Robertson Street but that was moving very slowly.

Meanwhile Space and White Rock Trust (which had emerged from the Hastings Pier & White Rock Trust) were both fascinated by the Alley behind Claremont and had together arranged for a meanwhile lease of the basement of the building that was to become Rock House, mainly in order to liven up the Alley and to keep an eye on the derelict 1924 Observer Building (OB) – at that point on its 13th owner since it became empty in 1985. This meant we were in position when Dyer & Hobbis called to say the owner of the freehold wanted to sell the building – did we want to buy? The asking price was £400k. I asked my friend Chris Brown from igloo regeneration to come and have a look. We walked around the building and he said ‘offer them half’.

At the very same time the situation with the Observer Building (OB) was hotting up. Investec had lent large amounts to a man later convicted of mortgage fraud and they ended up owning the building which was listed in their books with a high (£4M+) valuation. After an aborted sale to a pleasant but deluded man from Essex called Tanjir Sugar, I had been working with Esther Brown (supported by a pre-feasibility grant from Social Investment Business) to encourage the council to consider a compulsory purchase. Jeremy Birch was getting interested. That pushed Investec to put it up for auction and it is a convention that local authorities dial down on CPO if there’s a chance of a new owner. Suddenly we were needing to compete to bring the building to safety. Mark Curry became chair of the White Rock Trust property group; Keith Sadler was lead negotiator. We spent a week on the phone back and forth with the auction house. I went begging to HBC, had a very memorable meeting with Jeremy Birch and Simon Hubbard which ended, amazingly, with them backing us with the promise of up to £350k so we could go and bid at auction. I rushed home… only to see on the auctioneer’s website: ‘SOLD PRIOR’.

The weeks merge into each other in hindsight but these processes – trying to buy the OB, actually buying Rothermere House (as it was known then) – were running in parallel, and could easily have had different results.

I called Ollie Dyer and (with butterflies in my stomach) offered £230k (I couldn’t bring myself to go to £200k – it just felt too cheeky – shows how naïve I was!). Ollie said yes but you’ll need to complete in 4 weeks.  So how could we do that? In a sector dependent on grants and loans, where funders require you to point at a building and say we want to do that one and then take 3-6 months minimum to say yes? I remember standing over the road from the OB with Cllr Keith Glazier (Leader of ESCC) and Nick Hurd MP (Minister for Civic Society) and saying in a dynamic market that just doesn’t work. They nodded, and went back to their duties. We were left to work it out.

There was one option. It was a bit crazy. When I describe it now I say: “I wanted to test whether people like me, people with equity in houses that they didn’t earn, could take some of that equity and invest it for good”. Ronan and I had been thinking for a while about buying a Hastings property and trying to be ‘good landlords’. Then I had started working with the Old Bakers in their base at Silchester Mews. We concluded what they needed was a ‘good landlord’. I spoke to Ronan about how maybe we could be that landlord and we opened negotiations with the owners Hastings Trust. But again, they were too slow (the charity is still not quite deceased even now). At the same time conversations were underway about the need to cap rents to protect the affordability that underpins the wonderful Hastings quirkiness (see Part 3 How the Money Works: Heart of Hastings, forthcoming).

So we were ready to invest. We’d spoken with mortgage lenders. We were renewing our mortgage in any case. But even for us the timescale was punishingly tight. Stroke of luck – my mother was moving house and holding cash in the bank while she rented in between. I borrowed the money from her first of all and then within a couple of months repaid her once our mortgage came through. The money on my personal mortgage is loaned to Jericho Road Solutions which pays £350 a month back to cover that element of the mortgage payment. So Jericho Road invested £85,000 into Rock House at the most crucial moment of all. And we haven’t stopped investing since.

We formed a company – White Rock Neighbourhood Ventures – 50/50 between Meanwhile Space CIC (MWS) and Jericho Road Solutions (JRS). Immediately I was keen to grant 10% of the shares to White Rock Trust, the 440-member community organisation I had spent the past 8 years developing. So JRS went down to 40%.

We bought the building in July 2014 and took vacant possession of a 9-storey office block  (1350sqm) in October 2014.

Two useful stories about money.

  1. The first Quantity Surveyor we got to cost the renovation said it would be £1.98M. We freaked! Can’t do that. So then we brought in Charles Couzens of Ecos Maclean who was committed to reuse and a staged approach. In the end (by March 19) we will have spent about £1M on conversion.
  2. The main reason the owner wanted to sell was because the 25-year lease to Diageo was ending in Sept 2014. By buying in July we not only got the last quarter’s rent (about £15k) but also got to charge Diageo for ‘dilapidations’. This was not something we even knew about but with help from the Third Sector Alliance we ended up getting £115k extra towards the refurbishment.

So we had enough resource to do the 1st and 3rd floors. We made those floors work for the tenants we had lined up – a perfect set of pioneers. On the first floor the Old Bakers expanding nearly two-fold as they moved from St Leonards into the nascent Rock House. On the third floor an exodus from the ‘Creative Media Centre’ – Technology Box, Wave Design Coop and BR Web Consulting. By March 2015 they were in and we were on our way. We still didn’t have any money to do the rest of the building…

This is where pre-existing relationships helped again. Meanwhile Space had long been in discussion with Big Issue Invest. BII were keen to invest and had done all the due diligence. They lent us £250k to develop the six flats on the 4th and 5th floors. We got on with that, while developing further plans for other floors, and nurturing the building as it came alive.

I was continually fundraising. I had been writing bids focused on ‘the rotting buildings at the heart of our community’ since 2013. We had some support from a pre-feasibility grant from Social Investment Business but now I was waiting for some of the funders to catch up. This was particularly true with the emerging Power to Change, which was to play a critically important role in Rock House’s survival and success.

Power to Change was literally being invented in front of my eyes as a funder and support system for community businesses – a field I have occupied for the past quarter-century (since I was a co-founder of the Community Business Network in Deptford in 1993!). A dream come true at last. It took a long time but we were awarded a grant of £300k. We stretched every penny of it to deal with the ‘M&E’ (mechanical & engineering – everything to do with the building as a whole – plumbing, electrics, lighting, heating, fire safety, lift, etc) as well as transforming the Ground Floor into the Ground Control co-working space, the Project Space and the Living Room for the whole building. In the end it wasn’t enough (mainly because we needed a misting system to deal with the complexities of the fire safety regimes) and we went back like Oliver with his bowl and asked for more. Without cruelty or patronising, they looked at the case and agreed a further £58k to meet part of the shortfall – we found the rest through Meanwhile Space.

That leads neatly to describe how we actually survived. Because making these projects work is only partly about making the spreadsheets tell good stories. It’s just as much about having a cushion when it doesn’t quite work out the way you expected. In the jargon, that’s called ‘working capital’ and when it comes to sheer survival, it’s like an airbag or a lifeboat. Without it you are likely to be… in trouble.

Meanwhile Space (MWS) cash-flowed the build phases – in other words they paid all the bills whether or not funding had come in for them. We transferred transactions to the WRNV bank account early on but still made active use of the MWS bank balance to fuel the redevelopment of Rock House for at least two whole years.  By the end of it they were owed £91,000. WRNV didn’t have that money, but that’s the whole point of a committed investor – they stick it out. A year later Meanwhile Space agreed to convert £40,000 of the loan into a grant as match-funding for the Coastal Communities Fund. The remainder is being paid off on a monthly basis.

In the middle of the redevelopment process, weird stuff happened. It’s not worth going into here but it led to Power to Change taking back the shares from White Rock Trust and becoming a one-third owner of WRNV and therefore Rock House. They (PTC) are currently working out how to pass their shares on to a bona fide community organisation.

One further source of significant capital input has been the Coastal Communities Fund. In the summer of 2016, I was putting together a CCF bid for Rock House. Hastings Borough Council told us that so were the Source Park and so was the Pier and that they the council would be best to bring us together and put in an overall bid (as it turned out Source only wanted a small amount and the Pier dropped out). The Council took up the ‘slack’ in the budget but Rock House was granted just over £400k to ‘finish the building’ (6th floor, 2nd floor, Lower Ground and Basement) and support a local-economy led regeneration of the Alley. This work is underway, due for completion in spring 2019.

The WRNV Shareholders’ Agreement envisages a situation in which the founder investors take out as much dividends as is prudent for the first 10 years, and then there is a 3-year window in which the community organisation partner (ie whoever takes over Power to Change shares) can buy out the other partners and own the whole building. The valuation at that point will be based on the covenant in perpetuity to cap rents with inflation. It will therefore represent a decent investment with a reasonable return.

There is another complexity about mixed use, important to understand. Our tax advisors pointed out that the company that develops the whole building should pass the residential to a separate company. Don’t ask me exactly why – we never got a clear answer – but apparently this is the way it is done. So Meanwhile Space and Jericho Road set up Living Rents (Hastings) Ltd to be that ‘ResiCo’ and agreed a 150-year peppercorn lease on the 4th and 5th floors (ie the residential element) in exchange for taking on the responsibility for the £250,000 debt to BII that was associated with the flats. Living Rents has been the landlord for the homes ever since, working out as we go how to run this innovative approach to landlording, and is now providing a similar service for Heart of Hastings CLT at 39 Cambridge Road (for 5% of the total rents).

Now, however, Living Rents being separate from WRNV no longer feels necessary or helpful so we plan for it to be a wholly-owned subsidiary of WRNV in order to bring the whole building together as an asset and a business. This consolidation will also help us in the next stage of the journey: the Observer Building went back on the market in August 2018 and WRNV is working flat out to buy and redevelop it as a community asset…

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How the money works

I’m going to try to explain the financial package that Friends of Hastings Pier put together as simply as I can. This is both an exercise in extreme transparency and a practice run for some workshops I’m planning about how money works in land & building development (from a community perspective of course).

I’m not going to name our commercial operator partner but detailed information about him and his support team was submitted to the Administrators and the estate agents on 14th June, along with the legal heads of terms of the agreement between us.

First a quick rant…

Those of us who like to get things done often complain about procurement rules but we recognise they are there to ensure fairness and clarity. Instead throughout this administration process we have been lost in the world of the estate agent where there are no rules, just a driving desire to close the highest possible deal at the soonest possible time. That world of private property is also well known to be macho, aggressive, secretive, and unscrupulous. It is absolutely the wrong approach to a civic/community asset.

At no point in the process since submitting our first proposal on 12th April did the Administrators explain what was going to happen next, how or when. When we met them on 11th May we asked to be put in touch with other bidders but heard nothing. On 13th June they asked us to ‘set out any revised plans by Noon tomorrow’ but did not commit to what they would do with them.

I believe a more appropriate administration process would have been:

  1. Describe and promote what you’re doing and work with people who show interest in the matter, explain what you’re looking for, encourage collaborations. As new people approach you, meet with them and then ask if they wish to meet with others who have shown interest so far. Ask all potential bidders to make available an overview of their vision for wider publication
  2. After 3-4 months of that work, set a date with 6 weeks notice by which all potential proposals must come forward in whatever combinations they have chosen. While submitting detailed info to the Administrators, bidders also update their overview proposals online.
  3. Have an assessment process (2 weeks minimum) based on a clear set of criteria. Consult closely with relevant stakeholders, most obviously the local authority, but also including staff, volunteers, community and user groups.
  4. Make a decision – present it publicly, including to the community shareholders
  5. Implement it.

This could have been done in the same overall timeframe but been a better process leading almost certainly to a better decision.

If this had been the process, and it had been clear from the start, then Friends of Hastings Pier could have focused on the job it initially set out to do – to give shareholders and supporters a voice in the process and the decision. Instead we were forced to take a position as a ‘bidder’ in a secretive and non-collaborative environment.

Even so, though we will continue to complain about the process, we are convinced that even within that approach, ours was the best overall bid and should have been chosen.

SO HERE’S THE DETAIL:

By the way it is revolutionary to share this kind of information about a bid publicly. Isn’t that ridiculous?!

PURCHASE FREEHOLD OFFER: £55,000. This was emailed at 15.44 on 15/6/18 and followed up formally by our lawyer. This amount, and indeed more if necessary, was available in the form of a cheque from Jericho Road Solutions, as captured on camera by numerous media outlets that day. I have track record in applying Jericho Road assets to help make local projects happen. We were able to purchase Rock House because I put £85k on my mortgage. In this case it would have been every last penny we had in the bank. The amazing thing about finance in the community is that I could take that action knowing that others would help share the burden.

SECURED AVAILABLE FINANCE: Total £750k, comprising £180k Crowdfunder (see below) and up to £570k secured on Operator assets. This would be used for working capital, both to install and fit out the new temporary structure, and to manage and underpin the costs until December 2020. At that point the pier would close for 3 months while the new permanent building was readied for the 2021 Season.

CROWDFUNDER: Crowdfunder approached us on 25th April, a couple of days after the Urgent Public Meeting, via a conversation happening in the background with community shares specialist Dave Boyle. They had already put together a draft page. They have been brilliantly supportive throughout and we are gutted that they won’t get their fees. One of the great legacies of this process is the 800+ comments that explain why people donated. Very powerful indeed.

We had to take a very rapid decision about target amount and date so that it could go live quickly. The noises from the Administrator, never clearly stated, never in writing, had been that we needed £1.2M – a figure apparently based on the pier losing £50k ever month, itself based on figures from February 2018. We rounded that down to £1M and said we’d get half through Crowdfunder and half from grants. In the meantime we got on with producing our financial model to see what a more realistic working capital requirement would be.

But the target of £500k was too high for that kind of individual donor fundraising, especially in just one month. That meant that no amount of donating would be worth it – like trying to vote against in a safe seat. We had to do something about it!

Chris Brown of igloo regeneration is an extraordinarily good problem-solver. Even he was pushed to his limits, trying to support a not-yet-incorporated organisation in an uncertain situation. But with his patience we worked out a good, clear deal. Igloo would provide £300,000 to the Crowdfunder as a short-term loan, repayable within 6 months with no interest charged.

That certainly provided a great boost and within a few days a further £40k came in from other donors (in small amounts from £5 to £5,000). This ‘spurt’ and ‘splutter’ of crowd-funding is extremely stressful – end up checking it every 5 minutes!

As we headed towards the deadline of 31st May it was going well but we were acutely aware that it was ‘all or nothing’. Crowdfunder called and asked if we wanted to extend – we hadn’t even realised it was an option! That’s where the 30th June deadline came from.

By the time the Administrator announced the decision (9.30pm 15/6) the Crowdfunder had breached £475k and was clearly going to reach target. We would have drawn down the money, paid the Crowdfunder fees (£19k), repaid igloo and had £181k in the bank by 7th July.

Before explaining how we could take on the pier if we only had £181k, let me say something about support ‘in the pipeline’.

FINANCIAL SUPPORT IN PROGRESS AS AT 15/6/18:

  • Power to Change – community business fund application submitted 5/6 – £300k
  • Coop Foundation – positive ongoing discussions, application in assessment – £90k
  • Esmee Fairbairn – approached us 15/6 with an offer to work up an emergency application for c.£60k
  • Coastal Revival Fund – application in progress for deadline 5/7 – £50k
  • Potential local private investor – positive discussions were ongoing with interest in “exploring ways to put the Pier’s finances on a firmer footing”
  • Comprehensive funding search by our fundraising expert Julie Eason concluding it was ‘absolutely’ possible for FOHP to raise £1.6M for a new permanent building

OTHER SUPPORT:

Lots of people have asked ‘why don’t you contact the bands that played on the pier?’ FOHP volunteers Amy Walker and Andrew Pearce have between them contacted pretty much all the managers and tweeted all the musicians who ever played there. Lots of goodwill, some swag to auction (thanks especially @BillyBragg), offers to play benefit gigs and to perform on our future pier.

Right up to the last minute, as the story spread nationally across all the papers, we were being approached by all kinds of people wanting to see if they could help, including some pretty big hitters. There is no doubt it had begun to capture the imagination – just at that moment the Administrators gave it away ‘for a song’ – I wonder was it ‘(Can’t Get No) Satisfaction’ or ‘Madness’?!

Two worlds that are likely to support Hastings Pier that we had only just begun to mobilise:

  • community businesses – the sense of solidarity was growing, especially after the tweet from the Bevy community pub in Brighton. Maybe this siphoning off of community assets into private ownership will wake the movement?
  • architecture – with such excellent support from dRMM and from the University of Brighton’s Architecture School, we perhaps could have done more to get the attention of the architecture world sooner. Perhaps they’ll listen now?

FINANCIAL MODEL:

Our financial model showed that the working capital available from the Crowdfunder, the investment by the operator in the installation and fit-out of the temporary structure (estimated around £100k, (of which in this model £30k is shown as an FOHP contribution so that we knew that he would close the Crowdfunder gap if that became necessary in a hurry), and his guarantee to further underwrite pier working capital up to a maximum investment of £570k over 3 years, would be more than adequate for the Transition period. When tested for sensitivity in terms of visitor numbers and average spend per head the worst case scenario shows a total sunk capital of £630k in that period (in other words well within our guaranteed capital available).

The detail of projected income and spend can be explored on the spreadsheet by those that choose to do so. The important conclusion is that the pier business would likely lose £100-£250k in Year 1, smaller losses or breakeven in Year 2,  and make a surplus in Y3 of £50-120k.

* * *

There is no doubt that the Pier is a challenging business to predict. My Christmas 2009 was absorbed in writing the first financial plan – no tourism expert, I made it up as best I could. Luckily we quickly found Leisure Development Partners and they put us on the right footing. I am convinced that the reason the Pier stumbled in 2017 was that Phase 2 – always essential to the LDP plan – had been forgotten and the all-important narrative that sustains these great totemic assets was grinding to a halt.

I spent many hours last year, paid for the first time ever by Hastings Pier Charity, to create the spreadsheets, from scratch, that could at least model what was going on financially and what change would need to happen to turn it around. I have never seen any financial information since then about Hastings Pier that wasn’t based on those spreadsheets. You won’t be surprised to know that my hourly rate is a lot lower than the Administrators.

I know more about piers than I ever expected to, but my role was not to be the expert – rather to hook the necessary expertise into the passionate grassroots, to draw on everything we know, the wisdom of crowds and the immense human asset of Hastings & St Leonards and their supporters everywhere.

I’ve talked about the money here, but at the core of the plan to drive the business were the people of Hastings & St Leonards. One particular person who always gave me hope was the wonderful Adam Wide with his larger-than-life, boy-scout persona and his deep understanding of creative content for a visitor attraction. Both of us knew that there isn’t a better place in the world to go looking for ‘animators’ than this eccentric, extrovert, extraordinary town. Some things are hard to value on a spreadsheet.

I hope that this gives some answers to the question of how the money would have worked. I’m happy to answer further questions and would welcome comments on how to present what is quite complex information more simply. I’m going to have a go at doing something similar for Rock House and Ore Valley in the next few weeks. I’m sick of people sniping in the background when they don’t know the facts. An entrepreneur is someone who sets out to do something when they don’t yet control the resources to do it. So I’m happy to share because I take pride in my ability to put together collaborative packages of financial and other support for projects that matter to people.

Posted in Hastings, Hastings Pier, Jericho Road Solutions, Piers, Seaside | 1 Comment

Hastings Pier – where our hearts are

Pier 2007 cropped.jpg

After 19 crazy weeks of community mobilisation, commercial negotiation, late night bid-writing, endless spreadsheets, obsessive Crowdfunder checking, and the hard, hard work of keeping hope alive… this is me trying to make sense of what has happened, what has been achieved and the impact of our failure to protect something so precious that it makes grown-ups cry.

I didn’t want to do any of this. When I heard that Hastings Pier Charity had gone into Administration in November 2017 I felt physically sick. A phone call with the Administrator in December sent me into a furious depression I haven’t experienced for 20 years. I couldn’t do any work, I couldn’t even bear to go into my office at home. I walked the dog a lot.

In the woods Scuffle and I would often meet Lesley with her dog Nicky. Was she stalking me?! Whatever, she managed to persuade me we had to do something. And then Vidhya at Power to Change said they’d help with a grant. So we arranged the first meeting on 3rd Feb 2018. We tried to get participation from the Administrators, HLF and other funders. When they refused we decided to go ahead with a small and informal meeting for people who wanted to be active and constructive.

That set the tone we have maintained throughout – we look forwards not backwards, we rise to the challenge, we adapt as necessary but maintain core principles that came from that first meeting and were voted on by 500 people at the public meeting on 23rd April.

  1. People get a say in what happens next
  2. The community’s asset should not be sold off into private hands
  3. A partnership approach to ownership and operation is the way forward 
  4. Good results are underpinned by good governance
  5. The Pier should remain a space that everyone can enjoy and take pride in

We mobilised every possible resource available to a small, eccentric town on the south coast. The response from the town has been phenomenal. Our collaborators list was already impressive by the time we submitted our first Friends Plan for Hastings Pier on 12th April; it has grown since. We have developed and adapted all kinds of processes and tools for coordination, transparency, connectivity, and we’ve done that at a incredible speed. None of that could have happened without a core team with astounding commitment and complementary skills. That core was constantly growing, a swirl of purposeful activity, drawing in new people, creating something bigger than the sum of the parts. Of course it hasn’t been anything like perfect, but it’s been generally good-natured

Alongside that local energy, I’d like to pay special tribute to some of the amazing people who have come from outside and fallen for Hastings and the People’s Pier.

  • Alex de Rijke (dRMM)
  • Chris Brown (Igloo Regeneration)
  • David Alcock (Anthony Collins Solicitors)
  • Tony McKinlay (Towercrest Enterprises)
  • Vidhya Alakeson and Ged Devlin (Power to Change)
  • Michael Collins (Leisure Development Partners)
  • Hugh Rolo (Locality)

These are all very clever, successful people, highly respected within their own sectors (and much admired by me). Each in their own way pulled out all the stops for us, going way beyond any normal commercial relationship, because as we all know Hastings Pier is not a normal commercial proposition.

Our Proposals

While all our plans have been available online as they developed, the final proposal that we put to the Administrators is not, because it contains genuinely confidential commercial information. In brief, it was a co-investing shared venture between FOHP Trust and a commercial operator, backed with £750k of guaranteed finance, alongside current funding bids or approaches from funders totalling £450k, with dRMM contributing £60-90k of design work, plus a comprehensive funding search by an Institute of Fundraisers expert showing we could ‘absolutely’ raise £1.6M capital to achieve and open a permanent building within 3 years. We could start straight away – dRMM had pulled an all-nighter for us and designed a beautiful but simple and cheap temporary structure.

In terms of operational capacity not only were we committed to working with the current team of staff and volunteers who have done so much to make this season a success so far, but our operator partner would bring in additional expertise and experienced staff to fill gaps and cope with a step-change in visitor numbers. The first thing we promised to do was actually count footfall – there is literally no data about how many people have been on the pier, let alone intelligence about who they were or what they thought.

Our approach, of course, made a full and undoubted commitment to prioritise maintenance and to sustain the in-house engineering team which holds the crucial ‘corporate memory’ of the pier.

To top all that, yesterday afternoon we offered to pay a purchase price of £55k. Without seeing the plans of others none of us can be categorically sure that it was the best option but it set a pretty high bar…

The ‘process’ of the pier’s disposal

There were three really terrible things about the approach taken:

  1. First and foremost it was just inappropriate. It is wrong to use a commercial administration process for a civic/community asset, applying private property sector ‘solutions’ to a civic problem that the community is capable and willing to solve for itself given half a chance. I hope that @PeoplesBiz and @LocalityNews will help to campaign for a Community Administration Act or an amendment to the Cooperatives & Community Benefit Societies Act 2014 to establish a more suitable process for when a community asset faces financial difficulties.
  1. The behaviour around timescales to develop proposals – not just ours but other bidders too – was almost designed to exclude good options and to waste a lot of people’s valuable time. They would never give us a deadline date or an honest description of the decision-making process, it was all just estate agent hyper-stress(hurry, hurry, or you’ll lose it, imminent decision, can’t wait, no you can’t have 6 months/3 months/6 weeks/30 days etc). Procurement rules can be annoying but they are in place to create fairness and clarity to everyone involved – nothing like that in this process.
  1. There was an absence of governance and engagement from all the places we might have expected better. Appearing numerous times this week in the Guardian (and rather sweetly also the Epsom Guardian), the Daily Mail, the Telegraph and the Express (even more sweetly also the Aberdeen Evening Express!), I think we can safely say this Pier is of interest to everyone across political and cultural divides. I have said it before: this is a totemic asset, meaning it belongs to everyone and everyone belongs to it.

Yet our politicians have been absent, the Foreshore Trust impotent and, most egregiously, the Heritage Lottery Fund, in pole position as the only secured creditor, have hidden behind the Administrators, too scared of judicial review perhaps to institute a fair, open and engaging process that could achieve the best possible future for an asset of acknowledged national heritage and architectural significance. They have all missed an opportunity to connect with and support voters, taxpayers, and lottery players, and to harness the energy of local people to solve local challenges.

Despite all these horrors, this process has had plenty of wonderful moments and outcomes – new and renewed friendships, hundreds of civic conversations, a new database of people who care about the pier, and an emerging solidarity among grassroots communities across the country.

What next?

We are taking a few days to reflect and re-group. An update has gone out on the Crowdfunder and to our mailing list. At least five possible next steps present themselves.

  1. CHALLENGE. We think they made the wrong decision and we think they made the decision wrongly. Lots of people ask ‘is it legal?’. We know that commercial Administrators have very wide-ranging powers, but nevertheless the disposal process will come under intense scrutiny.
  1. PROTECTION. Immediately re-list the Pier as an Asset of Community Value. Work to beef up the pathetic 2-year ‘reversion clause’. Ask the council to seek an annual repairs report to be submitted to the Borough Engineer in recognition of the risk to them if it gets into trouble again. Keep 4,000 beady eyes on it.
  1. PIER RESERVE FUND. Establish a community-held fund, actively invested and topped up with new grants, donations and bequests, to help it grow over the years so that it is always ready in the event of an opportunity to bring the pier back into community ownership.
  1. THE PIER IN EXILE. One really exciting thing has been the people and businesses that have come to the fore, both passionate locals and supportive outsiders. We will find ways to keep that energy going this summer and beyond.
  1. A COMMUNITY ADMINISTRATION ACT. We will be looking for a suitable MP who will put forward a Private Members Bill to lay out a better process for the situation where a community asset is at stake and/or the organisation is a community benefit society.

* * *

Personally I need to get some sleep and then try to start earning a living again. I do that mainly by helping community groups all over the country to take on challenging buildings that people love. Many of these projects involve Heritage Lottery Fund. I can only hope that my comments above will be taken not as an attack but as a frustrated cry of pain and a plea to learn lessons. We have so much to be grateful to HLF for, both in Hastings and across the UK. It is an immensely important piece of public infrastructure, which is why it must be held to account when communities feel it is hurting rather than helping them.

In 2016 I was awarded an OBE for services to community assets. I’ve always said that medal was for all of us who stand up to be counted, disregarding the snipers and the nay-sayers, taking a risk on hope. I’ve had hundreds of messages today from people across Hastings and across the country. You all say nice things but I do this because I can’t not. In the middle of the week someone admired my perseverance but said I was ‘pushing water uphill’. I listened politely and then said “as a specialist in pushing water uphill, I’ll carry on doing just that”. The question is not why I’m mad enough to do it but rather why does it have to be so bloody hard? When will we ‘exalt the valleys and make low the hills and mountains’? When is change coming if we don’t make it ourselves?

This tragic fiasco is not just about Hastings Pier, any more than the HLF renovation funding or the Stirling Prize was. This has always been about economics and power. And particularly the power or otherwise of local communities to manage, expand and protect their own local wealth.

The two Battles for Hastings Pier (2006-13 and 2017-18) stand in deadly stark contrast to each other. In one a very active community was eventually empowered by public funds to achieve the renovation of a derelict structure. In the other, the fully-restored asset was removed secretly from 5,000 shareholder-owners and then subjected to a commercial process that led, unfathomably, to where we are now.

A final thought…

Abid Gulzar made an interesting point last night. He waved at the pier and said ‘it’s not going anywhere’. He was right; the pier is a ‘tethered’ asset – it will always be Hastings.  I spoke to Alex de Rijke from dRMM earlier. While horrified by the injustice of the process and sad at its outcome, he’s relaxed about the pier itself – “it will survive Mr Gulzar and have another life after”.

Goodnight.

IMG_2461.jpg

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Pride in Hastings Pier

I was really pleased, honoured, and emotional to be at the celebration event on the Pier yesterday to mark the achievements of the Learning & Education Team which has been funded by Heritage Lottery Fund for the past 5 years.
This is what I said:
* * *
I want to talk about three things:
• The people
• The achievement (specifically of the heritage & learning programme)
• The future
 
The people = so many people, so much love, so much uncertainty and dogged determination to win through regardless. Individuals should be recognised and valued but we must also give credit to the power of numbers – that’s what it takes.
 
The achievement = the numbers, breadth, depth, diversity, and impact – all astounding. The legacy – in terms of archive and corporate memory – is precious and should be incorporated in the revitalisation of pier.
 
The future = Phase 2 of the People’s Pier
The project was always phased:
Phase 1 (renovation) – stable platform, stable ownership, interim business
Phase 2 (revitalisation) – commercialisation, intensive programme that focuses on footfall and dwell-time, with new infrastructure that enables visitor spend
 
Cohesion – the pier is our anchor, not just that everyone uses it but that everyone is involved in making it.
 
This great lump of metal and wood, as it heads towards its 150th birthday, represents:
• our courage and audacity in the face of the beautiful but ultimately hostile and threatening sea
• The ‘dead centre’ (or beating heart?) of our two towns of Hastings and St Leonards
• The ‘totem’ that we all belong to and belongs to all of us
Battle for Hastings Pier flag
I’ve brought some things which were kept for nostalgia as souvenirs.
Yet here we are again – campaigning to save Hastings Pier once more!
It has never been possible to walk away. I know, I tried!
 
What is happening now is just another threat in the long history of challenges the People’s Pier has faced
– from the Catch 22 at the start that if you didn’t have the money you couldn’t own it and if you didn’t own it you couldn’t get the money…
– to now where local people – working for free to protect the long term future of a critically important heritage, cultural and community asset – are treated as ‘just another bidder’ in a procurement exercise for a new guardian.
So let me finish by saying thank you:
1. to Heritage Lottery Fund for all their support – both in the beginning and while the pier is going through this crisis
2. to all the supporters, shareholders, funders and advisers, locally and across the country, and
3. most of all to the staff and volunteers who have given so much and who continue to keep the good ship sailing despite the weather!
Raise your glasses to the future of Hastings Pier.
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Hastings Pier… 3 things you can do to help

“There are battles you think you’ve won, only to discover you need to fight them all over again” – Jonathan Freedland, Guardian 28/4/18

At first, when the Hastings Pier Charity was put into administration in November 2017, it seemed terrible and tragic and tipped me over the edge. Strangely, it now feels like an opportunity. It’s a bit like the Fire in 2010 – the worst thing imaginable but still, in the smouldering, a chance of renewal.  Are we going round in circles or are we making progress towards some kind of destiny??! Maybe both!

Friends of Hastings Pier was set up (again) on 3rd February 2018 to give shareholders and supporters a voice. We were working towards a big meeting, preferably with the Administrators and HLF. At the end of March we were suddenly told we had until 12th April to put in a bid. We went ahead – proposing a split of the ‘top’ (above deck) and ‘bottom’ (structure), and developed an indicative business plan to show that, with Phase 2 investment and operated commercially, the top could make enough money to pay a rent to a community trust freeholder that would be responsible for the bottom forever. This model of separation is operated by several piers nationally, including Bournemouth and Cromer.

It’s crucial to remember that the pier project was always phased. Phase 1 (mainly HLF-funded) aimed for stable ownership, a stable platform, and an interim business plan that would tick over while investment was found for Phase 2 which would fully revitalise the pier. Phase 1 has created a beautifully renovated, Stirling prize-winning pier. Phase 2 appeared to have been forgotten, but is now fully back on the agenda.

We developed those ideas further, with input from the fabulous Adam Wide and exquisite initial designs provided by dRMM. Then we were told that if we didn’t have cash funds our bid would not be considered. So we went ahead with seeking pledges and quickly set up a Crowdfunder page. WHICH IS LIVE & URGENT & NEEDS YOUR ATTENTION RIGHT NOW!

 

Then the Administrators asked:

“Are the Friends of Hastings Pier comfortable that if we were given ownership of the pier next month, or even in the next two months, we would have the confidence and capability to :-

Continue to keep the pier open
Take over the loss-making operation
Sustain those losses for 2 years
Pay for maintenance and insurance @ £30,000 a month
Pay for any storm damage not covered by insurance
Design and ‘spec’. new buildings
Get planning permission for new buildings
Supervise and oversee the building of new buildings
Lease or Operate all aspects of operating the new buildings
Lease out or Operate the Entertainment Programme and F & B content
Ensure stability for the next two years
Build up the numbers of visitors over the next 2 -3 years
……. to finally generate profit”.

We’ve begun to answer that challenge in our transition plan, which argues:

“As community entrepreneurs, we disagree with the idea that the new owner is to ‘take over the loss-making operation and sustain that for 2 years’. That is a negative and narrow view. Our plan is to make radical changes from Day 1 to bring the pier into genuine community ownership and massively increase the breadth and depth of local and visitor usage, while implementing Phase 2 development and aiming towards a destination pier from Year 4 onwards.

We are confident in our ability to take on the pier. We were never asked if we wanted to give it up.”

The creative ideas for the long term, developed by Adam Wide with Friends of Hastings Pier can be seen here:

https://www.dropbox.com/s/c0neawfjil2m5wo/ADAM%20WIDE%20SLIDES.pdf?dl=0

The emerging designs by dRMM can be seen here:

https://www.dropbox.com/s/v1obmwnjk0wvupj/dRMM%20Initial%20design%20ideas.pptx?dl=0

The discussion draft of the Transition Plan is here:

https://www.dropbox.com/s/okppg9pgjybgp7k/FOHP%20Transition%20Plan%20v1.pdf?dl=0  

Some people get immediately why Hastings Pier is so important, for others it take longer to get under their skin. Most importantly, it’s a totemic asset – a totem is something that belongs to everyone and everyone belongs to.

On Monday 23rd April 500 people came to the public meeting and the feedback has been overwhelmingly positive. Five spokespeople were elected, including me. We deliberately don’t have a committee, whoever comes and is active and constructive can have a say and make stuff happen.

On Thursday night we launched the Crowdfunder: https://www.crowdfunder.co.uk/fohp2018/? with a target of £500k. We’ll be working to match that with a grant (calling all grant funders and foundations…?!) so we can show we have financial muscle as well as moral right and the best plans.

I’ve been writing to everyone I know to ask for 3 things:

  1. Dig deep and soon.If we don’t get to £500k by 31 May we’re sunk and really we need as much as possible by 11th May when a couple of us are meeting with the Administrators. Don’t hold back, be a saint and pledge whatever you can afford.
  2. Spread far and wide. We have lots of great volunteers in Hastings (more always welcome) but this needs to be pushed way beyond Hastings, and especially to people with a bit more money who can pledge in the £thousands. Share the crowdfunder link + @FOHP2018 + #YourPier. Talk to your friends; talk to everyone you meet – are they helping Hastings Pier?!
  3. Lend your skills, time, credibility, and networks. Alex de Rijke and his colleagues at dRMM have donated £60,000 of fees to help bring Phase 2 to planning permission. Adam Wide brings 40 years experience as a creative director in tourism & entertainment. Craig Cohon is lending his business weight. Please think about what you personally could do for Hastings Pier…

And lastly, let’s help make hope possible rather than despair convincing. We have to try… this money and momentum is what keeps alive the possibility of long-term community ownership of the People’s Pier (and in any case the money all goes back to the donors if we don’t raise the target or our bid gets rejected).

Go to Crowdfunder now and make my day…

https://www.crowdfunder.co.uk/fohp2018 

The game is on… are you in?

 

 

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Water OMG!

It was a fascinating day in Southampton at the Labour Party #NewEconomics conference on Saturday.

What stuck with me the most was being presented with the evidence behind the complete and ongoing rip-off and harm done by the privatisation of water. The pictures below are all from the talk by Dr Kate Baylis (SOAS University of London). I really hope she doesn’t mind – I’m just so cross and worried about this – I need to get it out there!

The amazing ‘denseness’ of the company structures. This web of companies is just one of the water conglomerates – Southern Water. The yellow highlighted company is the only part of the structure that is regulated. 

The fact that these water lords own *all the assets* – every last pipe and tap and pump and filter system. Unlike the railways where at least Network Rail has been kept whole. The debt they have loaded on includes the cost of buying the company in the first place – the amount of actual equity (ie shareholders funds) has dropped.

The water suppliers have a complete monopoly on all the customers in a defined region. They have ‘securitised’ future water bills (ie borrowed against them). So the money we will pay on our bills for water in several years time has already been used up. Does that bode well?

England is out on a limb internationally by having privatised water. Water in the US is 85% publicly owned and managed. When states do privatise they use fixed term management contracts, not give away the infrastructure itself.

So what does our water bill pay for? 26.8% return on capital (dividends to shareholders) and just 3% tax.

And finally, what does all that do to affordability? Guess…

 

The upper line is the average annual water bill. The line below it is average hourly earnings. The crunch date where the lines diverge is 2010. I expect there’s data now for dates beyond 2012 – would be interesting to see it.

Anyway, rant over for now. Vote Labour, get our water back! (not to mention the railways, energy and the rest)

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Investing Upside Down (ppt)

Here’s a link to the slides I showed yesterday at the Labour Party #NewEconomics conference in Southampton. Plus the narrative notes.

Investing Upside Down – Jess Steele

Investing Upside Down – narrative

Posted in Hastings, Hastings Pier, Jericho Road Solutions, JRS website, Ore Valley, Self-renovating neighbourhoods, Thinking | Leave a comment