Fontmell Magna Community Land Trust Ltd
Members’ Update – 4th April 2020
You will recall that at our last members’ meeting, on the 30th October last year, we reported on the work undertaken by the FMCLT to determine a way forward that would ensure the community had a ‘viable and sustainable’ shop
We considered the possibility of a village hub being established in Fontmell Magna, in the vicinity of the Village Hall, which could include a community shop. We concluded that whilst we would not rule that out, the better option for the village would be for the shop to remain as an independently owned and operated business.
During our researches we also identified that the terms (# see note 1 below) of the present lease and rent on the property in Church Street were, and continue to be, a major impediment to the viability and sustainability of the village shop. Recent contact with the present freehold owner has presented an opportunity to purchase the freehold.
The board has discussed this, and the option for the FMCLT to purchase the freehold is one it wishes to explore – a radical step but one that would allow the community to have a voice in the future of this important village resource.
For the sake of clarity, the purchase would be of the property only and not of the business, meaning the community would just be the landlord. The shop would continue to be an independently run business by either the existing or new tenants.
To help the board with its considerations we would appreciate your response to the following question together with any comments you may have.
- Do you support the principle that it would be beneficial to the community for the FMCLT to purchase the freehold of the village shop?
There are lots of caveats to this, so we are not asking for any firm commitment; just a view on the principle that this is a worthy objective.
If there is broad support from you, the members, then it is the board’s intention to undertake a comprehensive due diligence of the project. This would include professional valuation, structural survey, and legalities. This could need expenditure from the FMCLT funds and cost up to £2,500.
Once these investigations are completed, we will put the outcome to the members for information and approval to continue. Further consideration would then be needed regarding the methods to finance the project. Any decision to purchase will only be taken after a members’ ballot with a majority voting in favour.
Covid-19 will affect when and how we can proceed further. The board will keep you fully advised as the financial and health climate becomes clearer.
Meanwhile the board would appreciate receiving your response and comments to this email by 17 April. Please send to fontmell.clt@gmail.com
Your feedback is important as your participation is vital for the future of our village shop which, as present circumstances have clearly proven, is an important community asset.
The shop is doing all it can to support the community during this unprecedented time, we, in turn, should do all we can to secure its future.
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# note 1 – Members’ Update 3 April 2020
In April 2013, when the shop changed hands, the then owner split the enterprise into two parts. He kept the freehold of the property, comprising the house & shop premises, and leased the shop and post office business, to the present occupiers.
The lease was for 15 years expiring in May 2028. It had a break-clause option in March 2018 and upwards only rent reviews due in March 2016 & March 2023. Independent professional valuations indicate that the present rent is in excess of market value.
We believe that the present occupiers had an undocumented “understanding” that they would have first refusal if the owner wanted to sell the freehold. The “understanding” did not happen and in June 2015 the original owner then sold the freehold and lease, as an investment opportunity, to a third party.
The present owner of the freehold is an independent investor with no connection to or interest in the village, the shop or its community. He has recently written to the present tenants to advise them that he will be seeking to increase the rent and is not prepared to extend the lease after 2028.
The effect of this is to threaten the future of the shop after 2028 and leave the village without a significantly important asset.
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