LANCASTER’S flagship centre for creative industries is on the brink of collapse this week after the city council withdrew support for the building’s managers.
The decision caused a domino effect of events that has left the future of the Storey up in the air, and the security of its tenants in doubt.
Chief executive Mark Cullinan said it was his decision to move the VIC out of the the Storey last Thursday, “mainly to ensure the council could provide a VIC service in Lancaster through August”.
This week, the council denied claims that it panicked when it thought the building’s electricity was going to be switched off.
Storey tenant Andy Diggle said the building had been “catastrophically mis-managed” from the start, and that SCIC Ltd’s board of directors had made no effort to communicate with tenants about what was going on.
Tenants did receive an email from the Storey’s chairman, Simon Ryder, on Monday, which stated: “We are...baffled by the city council’s actions last week (removing VIC from the building without advising us, apparently indicating that we planned to close the building’s doors on Friday), and the unnecessary concerns these generated.”
Mr Ryder told the Lancaster Guardian on Tuesday that a combination of factors led them into the financial position they now find themselves in.
“There were meant to be three main income streams - rent from tenants, catering, and events, but the latter two didn’t meet their financial targets.
“At the same time it was very difficult to get funding from Europe, due to the initial outlay of costs.
“The council says it has withdrawn support due to ‘new financial information’ but that is not true.
“We’re still not clear what the council’s position is now after their recent meeting.”
Council officers had initially agreed to take over management of the Storey, but this was overturned by city councillors after the decision was “called in.” At a meeting last Wednesday, councillors were told that a takeover could cost over £200,000.
Mr Cullinan was grilled by angry councillors over his decision to agree a £90,000 loan to SCIC in December 2011.
Mr Cullinan admitted he would not have recommended that the council should take control of the centre if he had known the financial implications.
Nadine Muschamp, head of financial services, said the council “would have exposed itself to VAT liabilities of £250,000” had Mr Cullinan not approved the bail-out.
But Coun Roger Mace said SCIC Ltd’s accounts showed its liabilities outweighed its assetts as far back as 2010.
Mr Ryder said that Mr Cullinan would not answer any of his questions with regards the council’s timescales on closing the building, or taking it over and keeping it open, or whether the five staff currently working there could be transferred to the council’s payroll.
He added: “We haven’t achieved the successes we wanted to.
“We still want the Storey building to have a successful future, but we’ve reached the point where it’s out of our hands.”
The Storey board is expected to announce how it will proceed by July 31, amid calls for the company to be wound up.
Michael Gibson, director of Fat Media, has been speaking on behalf of the Storey’s tenants.
He said: “The decision by the city council to close the VIC last Thursday created panic and serious concern amongst tenants.
“On the basis that the city council knew there was an immediate prospect of the Storey closing, tenants considered immediately relocating their businesses at significant cost and disruption.”
Mr Gibson said tenants took legal and professional advice, consulted with electricity provider nPower and met with the Storey board.
He added: “On the basis of what we heard and saw we are assured that we can legally continue our tenancy at the Storey for some time to come.
“There are clearly some legal hurdles to overcome but we really hope that there can be a transition from SCIC Ltd to the city council, that protects local taxpayers and also helps open up a positive dialogue to find ways, some already identified by Storey tenants, to keep the building open in a way that is self-financing, keeps and creates jobs and is a valuable asset to the community.”
In a statement, Lancaster City Council said: “In addition to being the landlord of the Storey Institute, Lancaster City Council is also a tenant of the SCIC for its Visitor Information Centre.
“It is unclear for how long the building will remain open due to the very recent developments regarding the company’s operations and its financial position.
“It has already been considered by the Board of the SCIC Ltd that the SCIC may have to close, which would lead to uncertainty over the ability for the VIC to continue.
“As we head into the busiest part of the year it is important that visitor information is fully available with the least interruption.”
Lancaster VIC can be contacted by telephone on 01524 582394, email on firstname.lastname@example.org and its website www.citycoastcountryside.co.uk.