| |
£23m leisure centre plans threatened by
credit crisis
• THE roof has fallen in on the Finsbury Leisure Centre consultation on a £23 million rejuvenation because it is no longer profitable to build the flats that were to pay for it.
There have been five interest rate rises since August. Mortgage rates are around six per cent but gross rental yields of only about 5.3 per cent are not enough to pay the interest, and the gross rent is before expenses such as repairs.
Also a collapse in house-price growth makes the developers’ staple of buy-to-let flats highly unattractive as investments as buyers depended on an increase in a flat’s value to outweigh low rent.
The consultation brochure seems to be oblivious to the credit crisis that began in August, three months ago, and which has decimated mortage lending. Two of the four options in the brochure are based on property development. There was plenty of time to have waited to see how practical flats development is to pay for new buildings.
This expensive consultation is flawed and may have to be repeated as people commenting on the two options about blocks of flats are highly likely to be disappointed and the results will largely be meaningless. EC1 New Deal has budgeted £200,000 for feasibility.
Replacing buildings rather than extending the range of activities essentially is what the consultation is about – the two Finsbury Leisure Centre buildings and updating the adjacent listed Ironmonger Row Baths building, along with new boilers,
The range of activities offered in the buildings already is among the widest in the UK so more money seems largely unnecessary to extend the range. There are Turkish baths, swimming, badminton, basketball, volleyball, squash, table tennis, football and even a laundry. I have visited the seven local health and fitness venues and the gym exercise machines, for instance, are much the same as in Ironmonger Row Baths.
Islington Council and EC1 New Deal have sent a consultation brochure to residents and ask for comments by Monday.
The council, which owns the buildings, wants to use part of the remaining £25 million or so EC1 New Deal funds. EC1 New Deal has voted £4 million so far.
It is ominous that “local planning agreements” also will be tapped to finance part of the cost, projected at up to £23 million, according to executive leisure member Councillor Ruth Polling.
These are what are called Section 106 agreements for “community benefits”. They can be for quite large amounts. For instance, across Central Street from Finsbury Leisure Centre, planning gain from one project is £1,464,870 for “environmental, streetscape, leisure and community improvements in the vicinity of the site”. It is not difficult to see where Cllr Polling might want to have that money channelled if it ever arrives.
It also means that spending of Section 106 money would be skewed, spent on new buildings and equipment. A wide range of projects.would be starved.
Cllr Polling needs to update residents as to how each option is to be paid for in view of the credit crisis affecting property development. The consultation document is out of date. Caps may have to be cut according to available cloth.
LEO CHAPMAN
Dufferin Street, EC1
|
 |
|
| |
| Your Comments : |
| |
| |
| |
