Spark:York must meet seven conditions if it is to be granted a two-year extension.
The box container park was due to close in June this year. But City of York Council are prepared to offer the business a lease to keep it on Piccadilly until March 2022.
But Spark would only be allowed to stay if:
- all current planning conditions are met, including external cladding and noise control measures
- Spark can obtain an extension of current planning permission
- all rental payments are up to date prior to signing of the lease
- it pays a bond/deposit of £5,000
- a director acts as guarantor against tenants’ obligations, including rent
- there is no amplified live music or DJ sets in the evening
- annual rent of £13,333 is paid monthly to the council in advance, rather than annually in arrears – along with 30% of the site’s profits.
The council would be able to terminate the lease if any of the conditions are breached.
Spark directors say they cannot get a loan to pay for the external cladding – a planning requirement – without the lease extension.
Made a loss
A council report says that Spark:York “has provided street food kiosks, retail, shared workspaces, meeting room, performance spaces and public workspace,” adding:
It has provided space for a considerable number of start-up businesses in York and a number of these have been very successful and outgrown their space in York, resulting in them expanding to take space on a permanent basis within the city centre.
According to Spark’s request for a lease extension it has:
- supported 12 businesses in taking on permanent premises
- each business within the Spark site has taken on three members of staff
- enjoyed a turnover of £3m
- given opportunities to 40 start-up businesses in York, that have “supported the local economy with up to £500,000 in strengthening local supply chains”.
It has paid one of three £13,333 repayments to City of York Council to cover its £40K investment in the site. The next ones are due in March 2020 and at the end of the current lease in June.
The report says: “Spark made a loss in their first year of trading due to the front loading of their start-up costs and repayment of loans over a short period and hence the council received no profit share.
“Their view is that in the second full year of trading they will record a small loss and then make a profit in the following year once the loans have been repaid.”
Residents near to Spark have complained about noise from amplified music on the site. “This issue seems to be particularly linked to evening DJ sessions run by Spark:York and this is not an acceptable situation going forward,” the council report says.
The lease decision rests with Cllr Nigel Ayre, executive member for finance and performance, at the meeting on 14 February. He said:
Spark’s original lease was granted because we wanted to explore new ways to regenerate Castle Gateway and support the type of independent business that bring a unique character to York.
The recommendation reflects the fact that Spark has delivered on much of that promise, but that ongoing issues around noise and cladding are unacceptable and have to be resolved once and for all.
The report’s recommendations set clear deadlines and standards for Spark’s owners. Only if they are met could we consider allowing Spark to continue to provide a platform for York’s entrepreneurs to create jobs and business for local supply chains while breathing new life into a derelict patch of the city.
Spark:York co-founder Sam Leach said: “We welcome the opportunity to extend our lease.
“This allows us to continue offering a platform for new business growth in the city, bucking the trend of decline which is seen elsewhere, and to play our part in the regeneration and revitalisation of the Castle Gateway area.”