Addressing a meeting of the council’s Overview and Scrutiny Committee on Monday, November 18, Lib Dem councillor for Weybourne and Badshot Lea, Mark Merryweather, broke down Waverley’s investment in Brightwells to date and warned the scheme may not produce a profit for 25 years.
The borough council has already committed £5.8 million in “front-loaded costs” from its general fund to the development – including fees for the land assembly of the development site, the compulsory purchase of The Marlborough Head pub, and a contractual commitment to refurbish Sainsbury’s car park off South Street at an estimated “unfunded” cost of £500,000 to £650,000.
Cllr Merryweather told the committee £1.3 million of this £5.8m deficit in the council’s general fund has already been offset by a transfer from Waverley’s reserves, leaving Brightwells Yard owing the borough council’s general fund a net sum of £4.5 million.
And in the best-case scenario – with all 25 of Brightwells’ retail units, cafés, bars and restaurants occupied by tenants from day one, and the addition of a £1.4 million New Homes Bonus windfall – he added the scheme should turn around a profit “12 years from now, in 2031-32”.
However, the council is planning for a number of “sensitivities”, he added, which include the prospect the new government may scrap the New Homes Bonus after December 12, may not extend Surrey’s existing business rates retention pilot, and that Waverley may not be able to fill all commercial units from day one.
Cllr Merryweather said: “We all live in the same world, we all know what the High Street is like, we all know the rumours.
“So is it reasonable to expect we will hit, on day one, the commercial rent share that we have been forecasting from the development?”
He added the council does have some protection should the retail units not be occupied immediately, in the form of a minimum guaranteed income as part of its contract with Surrey County Council which is funding the retail element of the scheme.
But continued: “What it means is that, if all of those sensitivities hit, our annual recurring income from Brightwells will be £215,000.”
This, Cllr Merryweather said, would leave Waverley taxpayers without a profit on their investment until 2045 to 2046, just five years before the scheme is expected to reach the end of its ‘useful economic life’ and require another major redevelopment.
And he also cast shade on the 2016 promise that the Brightwells project will provide 400 to 450 jobs, commenting: “The jury is out on that – we simply don’t know whether it delivers.”
Brightwells Yard, comprising new high street shops, restaurants, a cinema, new town square and 239 new homes on land south of East Streeet, is set to be completed in March 2021.