LETTER: Residents bear a risk on park
Eastbourne Borough Council has made us all speculators by borrowing Â£18m to buy a tired looking retail park. You show the Leader posing in its uncrowded car park. It hopes that rents will exceed the interest and expenses, so there will be more money for services.
Quite apart from the threat from online retail, the deal is dependent on current monetary policy by the Bank of England. So if the equation goes the other way, services will have to be cut, or Council Tax raised, just to keep up the interest payments. So residents bear a risk.
The council’s record as a commercial landlord includes the former Wish Tower cafe, which became derelict whilst repairing covenants were not enforced. A council dabbling in commercial property investment has difficulty maximising rental income.
If it gets tough with its business tenants, they may blackmail it with threats of staff redundancies that a property company could ignore. The Public Works Loan Board exists to help councils carry out necessary public works; this transaction is an irresponsible abuse.