To receive petitions, comments and questions from members of the public.
Decision:
(i) Mr David Leal-Bennett (Director and Company Secretary - HTH Finance Ltd)
(ii) Stephen Pike (Hitchin Town Hall Limited)
Minutes:
(i) Mr David Leal-Bennett (Director and Company Secretary - HTH Finance Ltd)
Mr Leal-Bennett stated that there had been a lot of misinformation circulating, and so he would like to clarify the role of HTH Finance Ltd, which was banker to Hitchin Town Hall Ltd.
Mr Leal-Bennett advised that HTH Finance Ltd was created to secure 14/15 Brand Street, the entrance to the North Hertfordshire Museum in Hitchin. The property had been put up for sale by the bank, SIB, with whom NHDC officers had several meetings, but never agreed anything. The property was formerly two shops, in the centre of Hitchin with upstairs flats and, during the sale process last year, this was not lost on developers. He knew of at least two developers who were interested, so the threat was very real that the building could be lost forever.
Mr Leal-Bennett organised a meeting with various local businessmen to see what could be done. They considered putting in an offer, but this would not necessarily secure a purchase, as they could be outbid. He suggested that they approached SIB to see if they could be persuaded to take it off the market and buy their loan - they were offering to step into their shoes as secured banker. SIB would not take it off the market but, if they could act quickly, agreed to extend the time period for offers. It was extended by a month while finance and documentation was sorted out.
Mr Leal-Bennett and his associates then established HTH Finance Ltd, who then appointed lawyers and, after some negotiation, an agreement was signed with SIB. The property was then taken off the market and SIB agreed it would refer all enquiries to HTH Finance Ltd - this was over a year ago. Their concerns were validated by SIB, who advised that they had received several bids and that NHDC had been informed they were “a significant under bidder”; they further stated that “if NHDC had been close they could have secured the purchase, but they were not even within three and sixpence”, in fact NHDC were off the mark by hundreds of thousands of pounds.
Mr Leal Bennett commented that some Members had been informed that had we not stepped in, NHDC’s bid would have secured the property. He absolutely categorically stated that this would not have been the case, and that this was misinformation of the worse kind. He confirmed that one of NHDC’s Cabinet Members had also heard this direct from SIB.
Mr Leal-Bennett explained that HTH Finance was not making any money and, in negotiations with NHDC, they had agreed to take a “haircut” to secure a deal. This was because the business backers wished the Town Hall to always be available for the community of North Hertfordshire. We wish to ensure that NHDC purchase 14/15 Brand Street to enable the Museum to be open and that a fair arrangement be sought, which would secure the Town Hall for the future and will ensure that there was no litigation. He felt that this was not an unreasonable request, especially as the land was originally gifted by a group of Quaker businessmen in 1897.
Mr Leal-Bennett advised that those Members who had visited the new museum would realise what a superb facility it would be, but that it needed 14/15 Brand Street to work. The only ‘confidentiality’ aspect that was important was the price of £550,000, but unfortunately this was leaked.
For clarification, Mr Leal-Bennett stated that HTH Finance Ltd gave its consent for all documentation to go into the public domain so that councillors and the public may decide, rather than rejecting the proposal ‘out of hand’. As representatives of the ‘Community of North Hertfordshire’, he believed Members that needed to have a democratic discussion about this facility, which was important for the whole of North Hertfordshire, and to instruct NHDC officers to “make it happen”. HTH Finance Ltd’s experienced Local Authority lawyer was of the view that NHDC was able to do this deal. This was now an NHDC Members’ decision.
In summary, Mr Leal-Bennett considered that, if it were not for HTH Finance Ltd, the current situation would not be prevailing, as the site would have been developed, probably as shops. NHDC would have had to spend over £800,000 for access, and there would still be outstanding litigation. He was pleased that the business community were able to step in, and he confirmed that the directors of HTH Finance Ltd were able to sign this documentation now.
(ii) Stephen Pike (Hitchin Town Hall Limited)
As Chairman of Hitchin Town Hall Ltd (“HTH”), a registered charity, Mr Pike represented his members and the community groups of Hitchin; he was required to comply with HTH’s charitable objects and Charity Law. He had undertaken many discussions with the Charity Commission on this matter, and was legally bound to consider the assets and liabilities of HTH Ltd, including the Development Agreement, property, debtors and creditors. He was also required to obtain ‘Best Value’.
Mr Pike advised that, at an Extraordinary General Meeting of HTH Ltd, it was agreed that there must be ‘robust’ protection of the Town Hall. It had always been the case that HTH Ltd required Hitchin Town Hall to be a Community Asset (to this end NHDC were prepared to grant a 125 year lease). He was of the view that the Community Asset Register was virtually meaningless, as it would not give sufficient protection, particularly with regard to time, should NHDC no longer wish to keep the Town Hall. The documentation merely ensured that this was the case.
Mr Pike stated that HTH Ltd went to great lengths to ensure that their proposal would be acceptable under Local Authority rules. They employed the services of an expert lawyer, specialising in both these rules and Charity Law. The original NHDC documentation did not take into consideration the complexity of the unwinding process and HTH Ltd had spent many hours with their lawyers, costing over £12,000, to ensure that all aspects had been covered. This effort was to ensure that all parties would be satisfied with the outcome and they considered this money to have been well spent.
Mr Pike commented that Mr Scholes (NHDC Chief Executive) had turned down the detailed documentation, stating that this was a direct result of his discussions with the “Executive Members” where the “implications” had been discussed. There was absolutely no attempt at any compromise, just a statement saying that NHDC “best considerations” would not be met. It appeared as if those Executive Members did not want to proceed. Not knowing who they were, HTH Ltd wrote to all Executive Members expressing their concerns in the hope that pragmatism would prevail. After all, HTH Ltd’s lawyer had been briefed to ensure that NHDC would be able to comply.
Mr Pike explained that HTH Ltd’s lawyer, who dealt with numerous Local Authorities, wrote to NHDC lawyers to explain that the deal was indeed permissible and acceptable. HTH Ltd was therefore surprised that there seemed to be an impasse on this critical point. They fully understand that NHDC may wish to extend the benefit beyond Hitchin, and they had no objection to this, but a total rejection of everything without further investigation or a democratic debate seemed to them to be rather draconian. HTH Ltd had been assured that this was possible under Local Authority rules.
Mr Pike made the following points:
· This was not just a sale of 14/15 Brand Street, it was meant to:
- draw a line under the Development Agreement;
- ensure that there will not be any legal claim against NHDC;
- pass title of 14/15 Brand Street to the Workman’s Hall Trust;
- ensure the Town Hall was always a Community Asset and cannot be sold off for development.
· NHDC did not have
- an entrance to the Museum;
- access to three rooms;
- lift access;
- access to its servers.
· The cost of not including 14/15 Brand Street was significant:
- modification costs over £800,000;
- encroachment to the amazing museum displays to “break through three walls”;
- restricted access to the Museum;
- further delay in opening;
- litigation with a no win no fee lawyer who had reviewed the documentation;
- full disclosure of all internal NHDC documentation, e-mails, notes, witness statements etc.
Mr Pike advised that the documentation was passed to NHDC on 27 July 2017 with a legal synopsis and he confirmed that he had his members’ authorisation to sign; this could be done very quickly.
For the record and for Members’ information, Mr Pike attached recent e-mail exchanges and the legal synopsis.
Mr Pike gave his consent that there should be no further ‘confidentiality’; HTH Ltd would much prefer an open discussion. He commented that Mr Scholes had promised to get back to him last week after discussions with his ‘Executive Members’ but at the time of writing his presentation he have heard nothing. However, he had heard from Mr Scholes earlier in the day, and it was hoped that a meeting would be held during the week commencing 4 September 2017.
Mr Pike was of the opinion that this valuable Community Facility for North Hertfordshire had had a considerable amount of Council Taxpayers’ money spent on it, and that it was essential that the facility remained in the control of those taxpayers. He urged Members to discuss this proposition democratically and make it happen for the good of everyone in North Hertfordshire.
Mr Pike concluded by putting a potential new offer on the table which his members may find acceptable, subject to community representation. This was, in addition to the sale, to transfer the Town Hall and Museum into the Charitable Workman’s Hall Trust.