gary saunders - seven sisters proof of evidence -...
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TOWNANDCOUNTRYPLANNINGACT1990
ACQUISITIONOFLANDACT1981
INQUIRYINTO:
TheLondonBoroughofHaringey
(WardsCornerRegenerationProject)
CompulsoryPurchaseOrder2016
ProofofEvidenceof
GarySaunders
IndependentMarketExpert
onbehalfofHaringeyCouncil
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CONTENTS
Sections:
1. PersonalParticularsandProfessionalBackground
2. RoleandObjectivesfortheProof
3. ReviewoftheExistingMarketOperation
4. LicenceFees
5. Grainger’sObligationsunderthes.106AgreementandDDV
6. Considerationofthe2008“SevenSistersMarketReport”byUrban
SpaceManagement
7. ResponsetotheMarketTraders’StatementofCaseandtheWards
CornerCoalitionScheme
8. SummaryandConclusions
Appendices:
1) PhotographsofSevenSistersIndoorMarket
2) RepairsAssessmentSummaryReportbyCBRE
3) Calculationsfor“MakeDo”RefurbishmentOption
4) ImagesofNewMarketAreaEntranceandFrontage
5) ZonedFloorPlansforApexHouseandNewMarketArea
6) TablesofProjectedLicenceFeesunderDDVLicenceFeeScheme
7) LetterfromJ.A.Steel&Son
8) FloorPlan forGrainger’s2008Application
9) DocumentsReferencedintheMarketTraders’StatementofCase
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SECTION1:PersonalParticularsandProfessionalBackground
1.1. IamGarySaunders,ManagingDirectorofSaundersMarketsLtd.Ihavebeen
personallyinvolvedinthemanagementofmarketsandretailrelatedeventsfor
thirtyyears.Iamthesecondgenerationofmyfamilytowork withintheindustry.
ThelengthoftimeIhavespentwithintheindustryhasallowedmetogain
extensiveknowledgeofthefactorsthataffectsmallindependenttradersandthe
factorsthathaveadirecteffectonamarket.
1.2. ThecorebusinessofSaundersMarketsLtdisthemanagementofopenairretail
sitescontainingsmallindependentretailers.Wecurrentlyoperateatsixregular
locationscomprising11 tradingdaysperweekanddealwithapproximately650
individuallettingstotradersperweek.Wealsomanageotherareasofbusiness
suchastheoperationofseasonalpopup marketswithinshoppingcentres and
towncentres,aswellaslargeBankHolidayevents.Thefinaldivisionofour
businessistheprovisionofshorttermmarketmanagementarrangements,
alongsideaconsultancyserviceforbothprivateandlocalauthorityclients.
1.3. Wehavetworecentexperiencesofhands-onmarketrelocations: the first is
havingmanagedthesuccessfulrelocationoftheWesternInternationalSunday
Marketin2008.Thisinvolvedmoving approximately 300traderstoanew
locationwithalloftheassociatedplanningandnegotiationsforeachindividual
trader.Secondly,wearethemanagementteamattheNewCoventGarden
Market,whereweareinthemiddleofacompletemarketrebuildwhilsttheentire
marketcontinuestooperate.Thishasrequiredtwolargerelocationsof200retail
tradersand38wholesaletraderssofar,thelatestrelocationwasinMarch2017.
Furtherrelocationsofthewholemarket(400retailtradersand60wholesale
traders)areplannedthroughouttheremainingbuildplanuntilcompletionin
2022.
1.4. Although bothof theserelocationsconcern amixofopenairtraderswith
portablestallsandindoorwholesaletraders,theissuesoflocationplanning,
continuity,trust,maintainingcustomerawareness,communicationandrental
negotiationsarefactorsthatapplytoallsmallindependenttraders alike,
including thoseintheSevenSisters Market.
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SECTION2:RoleandObjectivesoftheProof
2.1. Therearefivemainobjectives oftheproof:
i. To reviewtheexistingstateofaffairsandoperations atthecurrent
SevenSistersMarket(“theMarket”),whichIconsiderinSection3;
ii. InSection4IexaminetheLicenceFeespaidbytheTradersinthe
past,theircurrentfeesandtherentstructureproposedbytheDDV
intheTemporaryMarket andtheNewMarketArea;
iii. InSection5Iassesswhether theundertakings providedbyGrainger
intheSection106 agreement(“s.106”,CD4/28)and theDraftDeed
ofVariation(“DDV”,CD4/38) servetheirpurposeofofferingaviable
planandallreasonableassurancesthatasmanyTradersaspossible
andaswanttowillsuccessfullynavigatethetwotransitionsfromthe
MarkettotheTemporaryMarketandfromtheretoathrivingand
buoyantNewMarketArea;
iv. InSection6I considerthereportontheMarketproducedbyUrban
SpaceManagementin2008 (CD11/6);
v. Finally,inSection7IrespondtoissuesintheMarketTraders’
StatementofCase (CD7/4) which relatespecificallytotheMarket.I
alsoaddresstheWardsCornerCoalitionscheme.
2.2. IwasapproachedbyMrKiddleofGraingerinFebruary 2017todraftthisProofof
Evidence.Iwasaskedtocommenton thecurrentstateoftheSevenSisters
IndoorMarketandontheobligationsforre-providingtheMarketsetoutinthe
s.106agreementbetweenGraingerandtheCouncil.Iwasalsoaskedtomakeany
recommendationsIjudgednecessaryforexpandingandimprovingthes.106
obligationstoensurethesuccessoftheNewMarketArea.
2.3. SinceFebruary 2017, Ihavecarriedoutaverydetailed analysisontheexisting
s.106obligations.Allofthe recommendations thatIjudgedwereimportanttothe
MarketanditsTradershave beenacceptedandincorporatedintheDDV acrossa
numberofdrafts.Withoutwaivingprivilegeonthesedocuments,myadvicehas
resultedinthefollowing changes,amongothers,nowcontainedintheDDV:
i. Establishing theschemeofLicenceFeesforthedurationofthe
TemporaryMarketandtheNewMarketArea;
ii. GuaranteeingthelocationoftheTemporaryMarketatApexHouse;
iii. GuaranteeingtheTraders’NewMarketAreastallswillbethesame
sizeastheircurrentstalls;
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iv. GuaranteeingtheTraders’TemporaryMarketstallswillbethesame
sizeoratleast90%oftheircurrentstalls;
v. AdvisingthattherelocationshouldbefreetoTradersandthatthe
budgetshouldnotbelinkedtotherateablevalueoftheirstall.
2.4. IconfirmthattheDDVreflectsmyadvice and that Isupportthecontentofthe
DDVentirely.IfIdidnotsupporttheobligationsorapproachtakenintheDDV
towardstheMarket,IwouldhaveadvisedGraingerandtheCouncilofthisandI
wouldstatethenatureofmyobjectioninthisProof.
2.5. Iam nowconfidentthatallreasonableprotectionandguaranteeshavebeen
providedinthes.106andDDVandthattheTradersandtheMarketstandthebest
possiblechance ofsurvivingandthrivingintheNewMarketArea undertheOrder
Scheme.
2.6. Mycommentsare basedontheDDVdated16th June2017 (CD4/38);shouldany
changesbemadetotheDDVthereafter,Ireservetherighttodealwiththose
changesinmyoralevidence.
2.7. IconfirmthattheevidenceIhavepreparedandprovideforthisinquiryistrue
andIconfirmthattheopinionsexpressedaremytrueandprofessionalopinions.
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SECTION3:ReviewoftheExistingMarketOperation
3.1. HereIreviewtheMarket’scurrentstateandhowitisoperated.Idiscussthe
OrderSchemeandGrainger’sobligationstowardstheMarketinSections4and5.
PhotographsoftheMarketareattachedatAppendix1.
3.2. ThecurrentSevenSistersIndoorMarket(”theMarket”)isacollectionof
independenttraders(“theTraders”)whohavecreated avibrantretailandsocial
environmentwithina rundownbuilding.Havinggrownuparoundmarketsand
makingacareeroutoftheirmanagement,Ihaveavestedandpersonalinterestin
thesurvival andexpansionofmarkets.AssuccessfulastheMarketis, however, it
isapparenttomethatchangeisinevitableandindeedrequired.Thecurrent
buildinganditsassociatedservicesareinurgentneedofmodernisation.This
wasnotedasfarbackas2008inthe“SevenSistersMarketReport”compiledby
UrbanSpaceManagement(“theUSMReport”,CD11/6),whichIexamineindetail
inSection6.
i) BriefHistoryoftheMarket
3.3. TheWardsCornerDepartmentstoreopenedin thefirstdecadeofthetwentieth
century andtradeduntil1972.Thecurrentmarketformatemergedin1984and
hasbeeninoperationcontinuouslyeversince.Isummarisehere abriefhistoryof
theMarket(largelytakenfromtheUSMReport):
i. TheMarketwassetupin1984andwasrunbyanindividualtrader,
MrROakley, ona20yearlease (p.7,USMReport);
ii. In1984thetradersweremainlyWhiteBritish,beforeexpandingto
includeAsian,Afro-Caribbean andAfricantraders(p.7);
iii. In1996therewereseveralblackorethnicminoritytradersbutno
Spanish-speakingtraderswhenUSMvisitedtheMarket(p.7);
iv. In 1996theMarketwasstalling,asweremanyothermarketsatthe
time:therewerealotofvacantunitsatthebackoftheMarketand
fewcustomers(p.7);
v. TheLatinAmericanpresenceintheMarketbeganinabout2000:
LatinAmericantradersfromtheElephant&CastleShoppingCentre
market neededspaceandmovedintotheMarket,alongwith
ColombianandBraziliantradersfromFinsburyPark(p.8);
vi. In2001,MrsJOakley tookovertheoperationofthemarketandthe
leasefromLUL.On15th September2006shehadafiveyearleaseon
theMarketrunningfromuntil2011(p.7);
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vii. By 2008,23ofthe46tradersoriginatedfromLatinAmericaand
weremainlySpanishspeakinganda “fewunits”werevacant(p.8).
ii) TheOperationoftheMarket
3.4. TheMarketiscurrentlyownedbyLondonUndergroundLtd(“LUL”)andisleased
toMarketAssetManagementSevenSistersLtd(“MAMSSL”),whichhasoperated
theMarketsinceSeptember2015.MAMSSLrecentlyconcludedanewleasewith
LULforfiveyearsat£60,000p.a.plussmallinflationaryincreaseseachyear.
3.5. TheMarketisaccessedviathreesmallentrancesdirectlyofftheTottenhamHigh
Roadandadoubledoorrearentranceforservicing.TheMarkethasagross
internalareaof9,730sqft.Ofthisgrossspace,6,200 sqftisrentablebyTraders;
408 sqftismadeupofamanagementofficeandtoilets(givingatotalareainuse
forstallsandservicesof6,892 sqft).Theremaining2,838sqft is circulationspace
forcustomers.This meansthat70%of thegrossinternalspaceisusedforstalls
andservicesand30%forcirculation.Thisisnotuncommonforoldermarkets.
Modernbestpractice,however,istoconstructnewmarkethallswitharatioof
usedspacetocirculationspaceof55:45.
3.6. TheresultoftheMarket’shighproportionofusedspaceisa crampedfeelingin
theaislesbetweenstallswhenitisbusy.Oneviewisthatthisbustleaddstothe
ambienceandcharacterofthemarket.Theotheristhatnarrowcrowdedspaces
putoffpotentialcasualcustomers andshortenstheirvisits.Inmyview,the
modernpracticeofallowingmorecirculationspacecreatesamuchmorepleasant
andinvitingenvironmentforcustomers.Asdiscussed below,onebenefitofthe
TemporaryMarketandtheNewMarketAreaisthattheyprovidefarmore
circulationspace, creatingmoreroomformorecustomerstoentertheMarket,
moreroomforseatingandamoreattractive space.
3.7. Thereare60 individualunitsofapproximately100sqft.Theseunitsarecreated
byusingwoodenframeworkstosubdividetheMarket’sinternalspace.Whilst
thisgivestheMarketthe“non-chainstore”feelwhich issorefreshing,these units
areinneedofupdatingasIdiscussbelow(paras3.13-21).
3.8. Theunitsarerentedonshorttermlicenceseitherassingleunits,or theycanbe
joinedtogethertoformalargerspace.TheUSMReportnotesthatin2008,the60
unitswereusedfor36separatebusinesses(p.1).Gradualcreeping extensions
andunauthorisedmezzanineshavesignificantlyincreased the“official”rented
sizeofsomestalls,however.Astheseextensionsarenotpermittedunderthe
termsoftheTraders’licencesandastheindividualsizesofthesehavenotbeen
formallymeasured,theyhavenotbeentakenintoaccountinanydiscussions.AsI
explainbelow, thecurrentmanagementcompanyisworkingtoaddressthe
Traders’useofadditionalspace(onwhichthey donotpayrent).
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3.9. Licencefees arechargedpersquarefoot(“sqft”)of space.ThemajorityofTraders
payaveragefees of£60/sqftperyear, forunitswithinthemarketandwhichdo
notfaceontotheHighRoad(“internal”units).Nineunitshavefrontagedirectly
ontotheHighRoad(“front” units)andtheseTraderspayanaverageof£64/sqft
peryear.1Itisverynormal tohavevariationsin rentschargedwithin amarket;
Traders’licencefeescanbeaffectedbytheir locationwithinthemarket,their
product,negotiationsandother factors. IdiscussthisfurtherinSection4.
3.10. VATisnotchargedonTraders’licencefeesandthereisnoadditionalservice
charge:all“services”suchasrubbishremovalandbuildingupkeepareincluded
inthelicencefee.AllTraderssaveoneareexemptfromNNDR (businessrates).
ElectricityispaidfordirectlybytheTraders throughindividualmeters.Traders
heattheirownstalls(oftenthroughelectricalheaters).
3.11. Asof16th June2017,theMarketisfullyletandthereisawaitinglist of14 traders
offeringarangeofproductsandservices,includingabakery,hairdressing,legal
servicesandclothing.Eightoftheseself-identifyasHispanicorSouthAmerican.
3.12. Theshorttermlicensesgivenosecurityoftenureandcanbeterminatedbythe
marketoperatoronsevendays’noticeorbythelicenseeon28days’notice.
iii) ConditionoftheMarketHall
3.13. Theconditionofthebuildingisdetrimentaltoitsfuture.Itisapparentthatthe
lackofsignage,thecrampedfeelingwithinthemarketandongoinghealthand
safetylegacyissuesthatrequireaddressingareallcontributingtothefeelingofa
“patchedup”marketratherthanaforwardlookingenterprise.Frommyown
visitstothesiteIcanconfirmthattheMarketlookstired,run-downandinneed
ofinvestment.
3.14. Ihavebeenprovidedwitha“RepairsAssessmentSummaryReport”preparedby
CBRE (“RepairsReport”,Appendix2).The briefwas“toestablishthegeneral
conditionandprepareapproximatebudgetcostsforessentialrepairstokeepthe
marketpremisesrunningsafelyasamarkethallforthenext10-15years” (p.2).
The Repairs Reportsummarisesthecurrentpositionasfollows:
Generallythepropertywasfoundtobeinverypoorconditionandtheremedialworkswehaverecommendedareextensiveandsubstantialinnatureandcost. If theworksarenotdealtwithinthenearfuture,deteriorationwillcontinueandtheworkswouldbelikelytocostmoreto remedy in the future. Some of the works should be attended toespecially urgently, in particular the matters relating to health and
1 Thenine“front”unitsrangeinbothsizeandrent:from72sqftto520sqftandinrentfromananomalous£51/sqftto£77/sqft.Ihavetakentheaverageofthesetoreach£64/sqft.
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safety, including repairand reconfigurationof theelectrical systems,firealarmanddetectionsystems,replacementofrottenanddislodgedfascias,andrepairstounevenwalkwaysandflooring. (p.3)
3.15. AppendixIIIliststhenecessaryworksandestimatedcostsand hereIsetout the
moresignificant tasks fromamarketoperator’spointofview:
i. Replacing theincomingelectricitymainssupply,whichis“veryold”,
“beyonditsdesignlife”and“frequentlyoverloads”;
ii. Replacingtheelectricaldistributionsystemandmeteringtoallparts
oftheMarket: thecurrentsystem“hasbeenexpandedwithout
adequatedesignordocumentation”,“subtenants/licenseeshaveby-
passedsub-metersandincreasedloadingonthesystemwithout
consent...asourceoffireorelectrocutionrisk”;
iii. Demolishingandrebuildingtoanappropriatestandardthe
unauthorised“mezzaninestoragedecks/upperfloors/ceilings”;
iv. Replacingthe“defectiveandinefficient”heatingsystem,gasintake,
boileranditscontrols;
v. Replacingthefirealarmsystemthroughoutthebuilding:the“current
systemisnotcertified”andpartsofitareof“differentages”;
vi. Replacing thelightingthroughout thebuilding;
vii. Remedyingthelackofventilation whichiscurrently“inadequate”;
viii. Repairingthedamagedparquetflooringandcarpetingthroughout;
ix. Refurbishingexistingwomen’sandmen’stoiletsandinstallingan
accessibletoilet;
x. Rebuilding theunitpartitions;and
xi. Undertakingarefurbishmentanddemolitionasbestossurvey.
3.16. TheRepairsReportlistsmanyotherissueswhichmaybemorestructurally
significant,butthesearetheoneswhichwouldstandoutinparticulartoamarket
operator.Further,itisclearthattheserepairswouldbeto“makedo”andkeep
themarkethallgoing:theReport stopsshortofestimatingthefarlargersums
thatwould beneeded toaddressthefundamentalissueswiththewholebuilding:
Asmentionedabove,wehavenotincludedforrepairstothecornerbuilding to the left (South) of the market premises or theoffices/residentialpropertiesabovethemarketpremises.Howeveritwasclearfromacursoryinspectionoftheseexcludedpartsthat
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theywere vacant and in very poor condition. Theywere derelictand no longer wind and water tight. We are advised that leaks(causedby roof and cladding failure) to the excludedupperpartsabove themarkethallhave resulted inwater ingressanddamagewithin the market premises. We have not included cost for therepairs required to the upper parts, but the costs would besubstantial and easily run into the tens if not hundreds ofthousands of pounds. Ultimately, repairs to the parts above themarket hallwouldberequiredtofacilitatethesafecontinueduseofthemarketpremises.Weconsiderthisneedsurgentattention. (p.4)
3.17. Itisclear,therefore,thattherearesignificantandpressingissuesthatwouldneed
investmentandattentionintheMarketintheabsenceoftheGraingerscheme.
3.18. SinceOctober2016therehavebeenmeetingsofthe“SevenSistersMarket
Traders– SteeringGroup”,attendedbyTraders,GraingerandMAMSSL, todiscuss
theMarket’sfutureandmaintenanceissues(seeMinutes appendedtoMs
Johnson’sProof).Duringthesemeetings,thefollowingissueshavebeenraisedby
Tradersormanagementasneeding attention,manyofwhichmirrorthose
identifiedintheRepairsReport:
i. “Leakingroof”leadingtosomeTradersplacingbucketsintheirstalls
(Minutes,24th November2016);
ii. Electricalsystemsbeing“overloaded”(Minutes,24th November
2016;6th April2017);
iii. Unsafe/unlawfulstoragearrangementsandmezzanines(Minutes,
2ndMarch2017);
iv. Defectiveheatingsystemwhich“neverworkedcorrectly”,andthe
“veryoldboiler”(Minutes,24th November2016);
v. Defectivefirealarmsystems(Minutes,2ndMarch2017);
vi. Inadequateextraction/ventilationsystemsproducingunpleasant
smells(Minutes,2ndMarch2017);
vii. “Defectiveflooring”(Minutes,2ndMarch2017;6th April2017);
viii. Thetoiletsare repeatedlyvandalised:locksbroken,handdryers
pulledoffthe wallsandtowelsstolen(Minutes,2ndMarch2017);
ix. Theneedforincreasinglyintensepestcontrol (ratsandcockroaches)
(Minutes,24th November2016;2ndMarch2017;6th April2017); and
x. PoorrubbishclearanceandsomeTraders’poorfoodhygienein
cateringunits(Minutes,2ndMarch2017;6th April2017).
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3.19. IndividualTradershavealso shownanawarenessoftheneed for renovations,in
responses to a“MarketandShopBusinessSurvey” conductedbyURS in2012as
partoftheEqualityImpactAssessmentundertakenbyAecom forGrainger’sMay
2012planningapplication(“the2012BusinessSurvey”,CD11/4).Traderswere
asked22questionsabouttheirsituationandviewsontheOrderSchemein2012.
3.20. AnswerstoQuestions16and17 – askingfor“commentsregardingtheeffectsof
theproposeddevelopment”– included:
i. “Ithinkworkswillattractnewcostumers [sic]”;
ii. “Clientswouldenjoyanicerplace.Thisisnotniceashowitisnow.This
isveryold.Whatweneedistomaintainthebusinessthatarerunningat
themoment [sic],andmaintainthesamerent.Putitnicer, [sic] Allthis
looksdirty”;
iii. “Peoplewillbehappierasnewplacewillbeprettier”;
iv. “Moreclients,placewillbenicer”.
3.21. Itisthereforeveryclear thattheMarketisinneedofsignificantinvestmenteven
tomaintainitscurrentstateandwithoutaddressingdeeperstructuralissues.
Tradersandmanagementhavelongbeenawareofnumeroussystemicand
cosmeticissueswhich detractfrom theMarket’sabilitytoappealtocustomers.
iv) TheCompositionoftheMarket
3.22. Thecompositionofamarketoftenchangesandissubjectto“churn”astraders
comeandgo.Thisisanormalandhealthyaspectoflifeinamarketandthis
Marketisnodifferent.
3.23. Thereare38TradersintheMarketatpresent.Thecurrentmake-upofthe
Marketbybusinessis:
i. 36%services,hairdressers,nailbars,moneytransfer,lettingsand
legaladvice;
ii. 22%generalretailersincludingDVDs,home-wares,fabricand
fashion;
iii. 22%foodandproduce,includingabutcher,mini-supermarket,and
fruitandvegetables;
iv. 20%hotfoodtraders(whoalsohaveseatingareas).
3.24. TheMarch2017DiversityMonitoringBaselineStudy (“2017DiversityStudy”,
CD4/36,p. 14)states thatethnicmake-upofstallholdersispredominately
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“Hispanic/Latino/Spanish”:23outof31respondentsor76%.Thisgroup
occupiesapproximately83%ofthetotalspaceinuse.
3.25. TheUSMReport states that:
i. WhentheMarketwasestablishedin1984,thetenantswereinitially
WhiteBritish,beforeexpandingtoincludeAsian,Afro-Caribbean and
Africantraders;
ii. In1996,whenUSMvisitedtheMarkettherewereseveralblackor
ethnicminoritytraders,butnoSpanish-speakingtraders;
iii. TheUSMreportnoted in2008that23outof46theTraderswere
eitherLatinAmericanorSpanishspeaking;theremaining 13 Traders
wereEnglish,Afro-Caribbean,EuropeanorAfrican (p.8).
3.26. Itisthereforeclearthatovertheyearstherehavebeensignificantchangestothe
compositionoftheMarketasawhole.Thistrendhascontinued,withanumberof
changestothelistofTraders overthepastfiveyears,ascanbeseenfrom
Schedule7ofthes.106agreement,compiledinJuly2012.Schedule7lists 38
Traders, ofwhichonly14werestilloperating fromtheMarketinFebruary2017.
Theother 24unitshavechangedhands,many morethanoncesinceJuly2012.
3.27. Thisgeneralprocessof“churn”intheMarketisalsodemonstratedbytwo
surveysoftheMarket,onein2012andonein2017:both surveysdocument
youngbusinessesoflessthantwoyears’standing,aswellasmoreestablished
businesses,someofwhichhavebeenthereforovertenyears.
3.28. The2012BusinessSurveyshowsthat,ofthe35businesseswhich respondedto
Question4 (“HowlonghasthebusinessoperatedatSevenSistersmarket”):
i. Threeanswered“lessthan12months”;
ii. Fourhadbeentherefor“morethan12monthsbutlessthan2years”;
iii. Threeanswered“morethan2yearsbutlessthan5years”;
iv. 17 said“morethan5yearsbutlessthan10years”;
v. Eightbusinessesanswered “morethan10years”.
3.29. The2017DiversityStudystates that,ofthe20 businesseswhich respondedtothe
question“Howmanyyearshasyourbusinessbeentrading”:
i. Onebusinessanswered““lessthan12months”;
ii. Twoanswered“betweenoneandtwoyears”;
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iii. Threeanswered“betweentwoandfiveyears”;
iv. Fiveanswered“betweenfiveandtenyears”;
v. NinehadbeenoperatingfromtheMarketfor“morethantenyears”.
3.30. ThisdatasuggeststhattheMarketisperformingwellandisinrobusthealth.The
Marketisclearlynotstatic:Traderscomeandgo overtheyears,regularlysetting
upnewbusinesses.Thereisalsoacoreofwell-establishedbusinessesof some
years’standing and(asof16th June2017)thereisawaitinglistof14traders
readytooccupyvacantstalls.Theseareallpositivesignsin aMarket.
v) TradingHoursandServices
3.31. TheMarket’stradinghoursare:
9 amto7 pmMonday– Thursday
9 amto8 pmFridayandSaturday
Sunday(closed)
3.32. Sundayopeningisunderreview.Sundaytradingisundoubtedlybeneficial:itisa
farbusierandmoreprofitabletradingdaythanMonday.Iaminstructedthat
therearemanyTraderswhohaveexpressedawishtotradeonSundaysin
meetingswithGrainger’sMrKiddle.Thereisasecurityissue,however,inthatthe
stallsarenotallindividuallylockable (althoughtheMarketitselfcanbelocked).
SothosewhocannotordonotwishtotradeonaSundaywouldleavetheir stalls
vulnerableiftheMarketisopeneduponaSunday andtheywereabsent.Itis
thereforeanall-or-nothingsituation:sevendaysaweekornoSundaytrading.
3.33. Sevendaytradingcanbeverydemandingforindependentsoletraders:some
Traderswillnotbeabletoopeneverydayoftheweekeveniftheywishedto.I
haveexperiencewhereamarketoperatorhastriedtoenforceseven-daytrading
andbeenunsuccessful,damaginghisrelationshipswithhistradersintheprocess.
Flexibilityisthereforeessentialwhentryingtointroduceadditionaltradingdays
anditshouldnotbecompulsoryunderthelicencesfortheTemporaryMarketor
theNewMarketArea.InoteherethattheTemporaryMarketandtheNew
MarketAreawillhaveindividuallylockablestalls andIconsidertheimpactof
having52additionalandprofitabletradingdays onLicenceFees (para.4.109).
3.34. TheMarkethasgoodloading anddelivery facilities.Thereisalsolimitedparking
available,althoughInotethattheotherMarketssurveyedinSection4 belowdo
nothavetraderorcustomer parking,savefor WoodGreenwhichispartofa
largershoppingcentreandthereisaccesstoa multistoreycarpark. Idiscussthe
situationintheTemporaryMarketandNewMarketAreabelow(para. 5.172).
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vi) CurrentManagementoftheMarket
3.35. ItisapparentthattheMarkethasbeensomewhatlackinginstructured
management overthelastfewyears.Theissueswhichhavearisenappearmainly
tohavecomeaboutpriortoMAMSSL’stermasoperator,althoughtheuncertainty
aroundtheMarket’sfuturewillhavemadeitspositiondifficultaswell.
3.36. Theseissuesarisingoutoflaxmanagementpracticesinclude theunlicensedand
unauthorisedconstructionofmezzanineareasaboveunits;thegradualincursion
ofpermanentstructuresontotheMarket’spublicareas;andunauthorised
alterationstoservices,includingalterationstoelectricitysupplies.TheTraders’
ad-hocandunauthorisedchangestounitsandserviceswill needaddressingin
thecurrentMarketand inthenewMarket.Iunderstandthisisbeingtackledby
managementthroughdiscussionswithindividualTraders,explaining theneedto
staywithintheareaspecifiedontheirLicenceandforwhichtheypayfees.
3.37. Idonot mentiontheseissues inordertocriticisepreviousorpresent
managements butaspartofthepicturewhich demonstrates thattheMarkethas
notbeencontrolledormanagedinamannerthatwouldmaximiseitspotential.It
hasthelookandfeelofamarketthatlacksdirectionandstructure,wherethe
individualtradershave createdthe bestenvironmentoutofwhattheyhave,with
nobodyconsideringhowtheMarketoperatesorpresentsitselfasawhole.
3.38. Graphicexamples ofthisincludethesignageandentrancestotheMarket,which
areshabby,outofdateandveryhardtosee(Appendix1).TheMarket’sprime
positionnexttoabusyUndergroundstationentrancehasnotbeenexploitedto
anythingnearitsfullpotential.InsteadonlytheTraderswhooccupythefew
stallswhichfront directly ontotheHighRoadhavebeenallowedtobenefitfrom
theMarket’sprime location,arguablytothedetrimentoftherestoftheMarket.
3.39. Thishasbeenthecaseformanyyears: the USMReportnotedin2008that“The
entrancesarenoteasytopickoutandareclutteredwithsignage.External
signageforthemarketisincoherent,oftenoutofdateandbarelyvisible”(p.11).
Itisalsoborneoutbyonlinereviews:
i) LondonTownInformationnotesthat“Eventhoughit'srightnextto
SevenSistersTube,youcouldeasilywalkpastthecoveredSevenSisters
Marketifyoudidn'tknowitwasthere.Hiddenawaybehindarowof
shops,thewhitedoubledoorsaretheonlyindicationfromtheoutside
thatit'sthere”2;
2 http://www.londontown.com/LondonInformation/Shopping/Seven_Sisters_Market/6dc3/
accessedon9th May2017.
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ii) ThemostrecentTripAdvisorreviewon30September2015 callsit:“A
HiddenTreasure:...GoodjobIhadgooglemaps [sic] onmyphoneas
couldeasilyhavewalkedpastwithoutrealisingitwasthere- butonce
insidewhat agreatfind”3.
3.40. FrommyownvisitsIconfirm thattheMarketdesperatelyneedsanattractive,eye
catchingentrance;thebenefitofthissimplechangetomaketheMarketvisibleto
casualvisitorsontheHighRoadwouldbeenormous.Iaddresstheproposed
changesinSection5,whichIbelievewillhugelyimprovethecurrentsituation.
3.41. Similarly,theMarkethasnosocialmediapresence.Thereisaverybasicwebsite
whichgives detailsofopeningtimes,addressandalistofbusinesstypes.4There
isasocialmediapresenceforoppositiontotheOrderScheme(suchastheWards
CornerCommunityCoalitionFacebookpage)andprotestingthelossofthe
Market,thereisnoorganisedpromotionoftheMarketitselfasaplacetoshop
andsupport.Again,in2008theUSMReportstatedthat
Themarketmanagers[theHeadLeaseholder]donotundertakemarketingforthemarketas awhole.Thatislefttotheindividualtraderse.g.thereisnowebsiteforthemarket,butseveralofthetradersadvertiseinLatinAmericannewspapersasagroup.(p.8)
3.42. Ihavelittledoubtthat muchoftheMarket(allexcepttheHighRoadunits)
receivesverylittlepassingorcasualtradeandinsteadreliesheavilyonexisting
customersandwordofmouth.
3.43. TheMarketwould therefore benefitenormouslyfromacoordinatedmarketing
program,whichshouldberunbytheMarketOperator usingmaterial suppliedby
Traders.Usingsocialmediatopromotemarketshasprovedtobeverysuccessful,
particularly throughFacebook.Atthetopendofthespectrumforindoorvenues,
BoroughMarkethas83,000“likes”onitsFacebookpage and GreenwichMarket
has 11,000 “likes”.Evenoutdoormarketslike NorthWealdinEssex,Dagenham,
or WellsbourneinWarwickhaveinexcessof10,000 “likes”each.
3.44. OnceaFacebookpageis“liked”byaFacebookuser,theuserreceives updateson
thatpage’sactivityandbecomes aprospectivecustomer.Thisprovidesthe
marketswithexcellentopportunitiestoupdatethesepotentialcustomers on
dateswhenthemarketswillbeheld(andlocationsifappropriate);onnew
productsorstallsin themarkets;onspecialevents,promotionsorcompetitions.
Socialmedia is alsoan opportunityforspreadingwordaboutthemarkets’
3 https://www.tripadvisor.co.uk/ShowUserReviews-g186338-d2470227-r315141299-Seven_Sisters_Indoor_Market-London_England.html#CHECK_RATES_CONT accessed10thMay2017.4 http://sevensistersmarket.co.uk/visit.html accessed12th June2017.
15
existenceandattractingnewcustomers.UsingFacebook asanexample again,
whenaFacebookpageis“liked”byanindividual,this isvisibletotheir“Facebook
friends”whowillthenlearn aboutthemarket.Ofcourseitisimpossibleto
quantifythepercentageofanygivenmarket’scustomerswhichderivesfroma
socialmediapresencebutitisabsolutelyclearthathavinganinteractivepresence
canhavearealimpactonamarket’sprosperity.
3.45. TheTradershavealsoidentifiedthisneedtoadvertisetheMarket,asshownby
answerstoQuestion15ofthe2012BusinessSurvey: “Whatadditionalmeasures,
ifany,doyoufeelwillbenecessarysothatyourbusinesscancontinuetooperate
inthelongerterm?”
i. “Toadvertisethebusinessandallowthebusuness[sic]tomaintainthe
sameprices, sosameclientscanaffordit”;
ii. “Moreadvertisementwillatrtractmorecustomers [sic]”;
iii. “Enableoldcustomerstofindus”.
3.46. AtpresenttheMarketdoesnotholdmanyformalevents,buttherearecasualand
ad-hocgatheringsonmanyevenings,usuallyonFridaysandSaturdays.Thereis
greatscopeforsocialeventstobeawayof publicisingthe Marketandrelocations.
3.47. Ofcourse,bettermarketingdoesnotrequirenewpremises;Imentionithereto
explainthecurrentsituationandtodemonstrateyetagaintheenormousscope
forimprovingandstreamliningthisMarket.IaddresstheDDVobligationsfor
advertisingbelow(paras5.126-133): theMarketFacilitatorwillberesponsible
foradvertising theTemporaryMarketandNewMarketArea.Iamconfidentthat
thiswillbeveryhelpfulastheMarketundergoestherelocations.
vii) Conclusions
3.48. Insummary,myconclusionsontheMarket’sstate arethat:
i. TheMarketisunique,vibrantandtradingtocapacity:Tradersarebeing
successfulindifficultconditions.
ii. TheMarkethasverylittleappealtoanybodynotalreadyusingit.The
entrancesareextremelypoorandundefined, whichdoesnotencouragea
casualshopper.Thereisscopetocreateahighprofile,modern,clean,
spaciousmarketwhichcan onlyencourageadditionalfootfall.
iii. Theconditionofthebuildingmeansthatchangeisinevitableandindeed
requiredinordertosecurethefutureoftheMarket (see Section4).
16
iv. TheMarketisnotoperatingatanythinglikeitsbusinesspotential:itlacks
direction,leadership andabasicmarketingplan.Thisisnotacriticismbut
anindicationofthescaleof theopportunitiesavailable.
3.49. Inmyview,thisMarketisripeforchangeanddevelopmenttoenhanceitscurrent
offeringandcomposition,nottochangeit.TheDDVguaranteesdiscussedin
Sections4and5provideeveryreasonableassurancethatthisMarketcanrelocate
successfullybackintotheNewMarketAreaandthrive.ThisSchemerepresents
theTraders’bestpossibleopportunitytokeepandimprovetheirMarket.
17
SECTION4:LicenceFees
4.1. InthissectionI examinethecurrent andprevious licencefeeschargedinthe
Market andexaminecomparablesituationsinnearbymarkets.Ithenaddressthe
provisionsinthe s.106agreementbetweentheCouncilandGrainger(“thes.106”)
andintheDraftDeedofVariation (“DDV”). TheseprovisionsfixtheTraders’
licencefeesthroughoutbothrelocationsuntiltwoandahalfyearsintothe
openingoftheNewMarketArea.
4.2. Insummary,myconclusionsare:
i. IamascertainasIcanbethattheTraderscan copewiththeLicenceFees
fixedintheDDV.Infact, overthefiveyearsunder thefixedscheme,
someTraderswillpayless thantheydonow.AmongTraderswhosefees
increase,includingVATthelargest increaseis33.55%overfiveyears.
ii. WithouttheOrder scheme,licencefeeswillalmostcertainlyincrease
whatever happens totheMarket– whetherona“donothing”basis,or
withrepairsona“makedo”basis,orundertheWCCscheme.VATisalso
verylikelytobeaddedontolicencefeesinanyrepairssituation.
iii. Underanyoftheseoptions,Traders’licencefeesarelikelytobehigher
thanundertheOrder scheme.
iv. Althoughthereisanelementofspeculationhere– giventhatthisissome
yearsaway– myinstinctisthat,inthe longterm,thistrendwould
continue:theTraders’feeswouldbelowerunderGrainger’sschemeand
profitshigherthanunderthe“donothing”,“makedo”orWCCoptions.
i) TheCurrentRentSituationintheSevenSistersMarket:
4.3. IaminstructedthatLULleasestheMarkettothecurrentmarketoperator
MAMSSL for£60,000 p.a.
4.4. Asnotedabove,theUSMReport states thatsince2001theMarkethadbeen
operatedbythe“HeadLeaseholder”,onafiveyearleasefrom15th September
2006until2011.TheHeadLeaseholderwasalsocharged£60,000p.a.forthe
leaseoftheMarketfromLUL(p.7).Themarketoperatorrenthasthereforebeen
atthesamelevelforatleast adecade,althoughIunderstandthatitisnowsubject
tosmallannualincreasestoreflectinflation.
4.5. MAMSSLcharges theTraderslicencefeeswhichequateto anaverageof£64/sqft
p.a. for“front”unitsfacingtheHighRoad(apremiumposition)andanaverageof
£60/sqftp.a. forunits insidetheMarket.Thisincludesservicescharges(upkeep
ofthebuilding,rubbishremovalandsoon).Traderspayelectricityfees
18
individuallyaccordingtousageinaddition.AllTraderssaveoneareexemptfrom
NNDR(businessrates).MAMSSLisnotVAT-registeredandthereforedoesnot
chargetheTradersVAT.
4.6. Thesefiguresof£60and£64/sqfthavebeen the average licencefees foratleast
severalyears,certainlybefore MAMSSLtookoverthemarketoperatorleasein
early2015.Inmyexperienceitisunusualformarketoperatorstobotherwith
thehassleofraisingtraders’licencefeesiftheyarenotplanningtocontinue
operatingthatparticularmarket.Almosteverylicencefeerisewillinvolvea
degreeofnegotiationanddiscussionwithmosttradersanditisthereforeatime
consuminganddelicateexercise.Ithereforeassumethatthelicencefeeswereset
attheirpresentlevelssometimebefore,possiblysomeyearsbefore,theprevious
marketoperator,theHeadLeaseholder,stoppedoperatingtheMarket.
4.7. Inotethatthe2008USMReportstates thatinMay2008
“acentralunitinthemarket(ofaround95sq.ft)rentsatbetween£72-85/week, with the majority of historic traders being on the£72/week. Units fronting theHigh Road are charged at a higherratethanthis,roughlydoubletheindooramountbyarea” (p.9).
4.8. Paying£72perweekforan entirestall(not persquarefoot)isatotalof£3744
perannum.Dividing£3744by 95sqftgives alicencefee persquarefootof
£39.41 p.a. foraninternalunit.Thereportsaysthatfor“unitsfrontingtheHigh
Road” thechargeis“roughlydouble”,givingaroughfigureofaround£80/sqftp.a.
fora“front”unitontheHighRoad.
4.9. Alicencefee of£39.41/sqftfor“internal”unitsappears tometobe
mathematicallycorrectandsounds reasonable for2008andthis kindofmarket.
However,IbelievethattheUSMReportmaybeincorrectinassertingthatthe
“front”unitspaidafeethatwas“roughlydouble”the“internal”units,soaround
£80/sqft.Ihaveneverseenanydocumentsorfigureswhichsuggestthatthe
“front”unitspaidthisinthepast.Indeed,the“front”unitsnow payanaverageof
£64/sqft.
4.10. Itisnotimpossiblethatlicencefeesfor“front”unitswerepreviouslyat£80/sqft
andhavesincedecreasedbelowthistocurrentlevels.Itseemsextremely
unlikely,however,andparticularlygiventhatthefeesfor“internal”unitshave
remainedat£60/sqft,whichishigherthanthe2008levelsof£39/sqft.USMhave
therefore,inmyview,madeanerrorincalculationsomewherewithregardsto
the“front”units.
19
4.11. ThereforeasIbelievethatUSMhavemadeamistakeandgiventhattheydonot
provideanyevidencefortheirassertionthat“front”unitspay“roughlydouble”,I
donotplaceanyrelianceonit.
4.12. Ialsonote thatUSMrelyon anaveragelicencefeefigureof£31/sqft p.a.(p.9).I
amunclearhowUSMhavereachedthisfigure.Fromthereportit appearstohave
beencalculatedbyestimatingtheoverallannualincomefromafully-letmarketat
£190,000anddividingthatincomeacrossthe6,150sqftofspacewhichwasthen
availabletolettoTraders:£190,000dividedby6,150equals£30.89,whichwas
thenroundedupto£31/sqft.
4.13. Itisentirelyunclear,however,howorwhyUSMadoptedanoverallincome
estimateof£190,000.Further, itisunclearwhytheyusedthatunconfirmed
estimatetocalculaterentper squarefootperyear,whentheyhavequoteda
specificandconcretefigureof£72perweekfora95squarefootstall,producinga
licencefeeof£39.41/sqft p.a.IalsocannotunderstandthebasisonwhichUSM
havedivided£31/sqftinto“aservicechargeofaround£17/sq.ftandarentof
around£14/sq. ft”(p.9).
4.14. USM’sfigureof£31/sqftp.a.thereforedoesnotappeartobebasedonany
concretefiguresobtainedfromthemarketoperatororTradersthemselves andis
inconsistentwiththeonlyspecificfigurequoted intheReport.Itthereforedoes
notappeartomethatitiscorrectthatin2008Traderswerechargedalicencefee
of£31/sqft;IthinkthatUSMhavemadeamistake intheircalculations.
4.15. AsIamunabletounpickthecalculationswhichledtothisfigureof£31/sqft and
asIconsiderthatitismistaken,Ihavenotuseditinmyanalysisofpreviously
chargedandcurrentlicencefeesintheMarket.
4.16. Assuming,however,that the2008USMReportisaccurate withregardtothe
quotedfiguresof£72perweekforan“internal” stallof95sqft,therefore,there
hasbeenariseinlicencefeeschargedintheMarketfrom£39.41/sqftto£60/sqft
for“internal”units.Thisrepresentsariseinlicencefeesof52.25%for“internal”
unitsbetween2008and2015 (atthelatest).Giventhescaleofthisincreasefor
“internal”units,itseemslikelythat“front”unitswerealsochargedatalowerrate
thanatpresentandthattherewasalsoanincreaseinlicencefeesfor“front”units
totheirpresentaverageof£64/sqft.However,asIhavesetoutabove,thereisno
reliableevidenceforwhat“front”unitswerepayingin2008andthisistherefore
onlyan assumption.
4.17. Sinceatleast2015,therehasbeennoincreasein licencefees.
20
ii) AnalysisoftheCurrentSituation
4.18. Intermsofthemarketoperator’slease,inmyviewamarketoperator’sannual
leasefeeof£60,000isextremely lowandwellbelowwhatthissortofmarket
oughttobefetchingandcertainlybelowwhatitcouldbefetchingwith
appropriateinvestmentandattention.Thisverylowrentislikelytobeduetothe
building’sstateofdisrepairanddilapidation.Theexistingmarkethallisinclear
needofrefurbishment.InotethattheUSMReportreachedasimilar conclusion
onthesituationnineyearsago:“WeconsiderthatthecurrentrentpaidtoLULis
prettylowasitreflectsthepoorstateofthebuilding”(p. 12).
4.19. ThecircumstancesofuncertaintyovertheMarket’sredevelopmentwillalsohave
contributedsignificantly tothedevelopmentofthecurrentunsatisfactory
situation.Therehasbeensomekindofdevelopmentapplicationorschemewhich
wouldaffecttheMarketgoingthroughtheplanningprocessfornearlyadecade.
Nomarketoperatororlandlordwouldinvestinsuchabuildingintheshortto
mediumterm.Thecurrentsituation – howeverunsatisfactory – was allowedto
continuewithshorttermfixes,ratherthanthesignificantlongterminvestment
thatthisMarketwouldneedifitwere toremaininthecurrentbuilding.Iagree
withtheUSMReportwhereitnotesthattheriskthattheTraderscanterminate
theirlicenceson28days’noticewouldsignificantlyreduceanyincentivefor
managerstoundertakethenecessaryworks(p.4).
4.20. Similarly,intermsoftheTraders’licencefees,Ibelievethat the £60/sqftand
£64/sqft averageshavebeenchargedforsolongthroughanumberoffactors; a
significantoneistheuncertaintyregardingthedevelopmentoftheMarket.The
arrivalofthenewmanagementcompanyin2015 willalsohaveaffectedtherent
andkeptitlowerthanmightotherwisehavebeencharged inastablepermanent
market.In2008,USMconcludedthat“thetraderscurrentlyenjoythebenefitsof
alowrent.Herethisisfora numberofreasons,includingthemanagementstyle,
conditionofthebuildingandtherenttoLULnotbeingtooonerous”(p.11).It
appearsthatrelativelylittlehaschangedsincethen.
4.21. IaminstructedthatwhenMAMSSLtookovertheMarketlease fromthe previous
operator in2015,rentswereattheircurrentlowlevelandmanagement practices
weresomewhatlaxandindisarray, asisoftenthecasewhenmanagementofa
marketchangeshands.ParticularissueshavearisenwithregardtoTradersusing
morespacethanpermittedundertheirlicence(particularlybyencroachingon
communalspace)andtherehavealsobeenhealthandsafetyissues.Iunderstand
thatMAMSSLhavebeenseekingtoaddresstheseoverrecentmonths.
4.22. MAMSSLhaveclearlythereforedecidednottoraiselicencefeesduringitsfirst
yearsasmarketoperatorinthesecircumstancesofuncertainty overtheMarket’s
21
futureand achangeinmanagementpractices.Inmyviewitis asensiblebusiness
decisionforamarketoperatornottoraiselicencefeesandsoavoidincreasing
thescopefortensionanddifficultrelationswiththeirtradersinalready
potentiallydifficultcircumstances.
4.23. Ithinkthisiswhythelicencefeesareattheircurrentstaticlevels.Itisclearthat
theMarketcansustainthesefeesgiventhatitis currentlyatfullcapacity andhas
awaitinglistof14 traders.Inmyview,however,itisentirelyclearthatthe
Traderscanexpectlicencefeeincreasesintheneartomediumfuture under any
circumstances,irrespectiveofwhether:
i. TheMarketsimplycontinuesasitis,withoutGrainger’sschemeorany
refurbishments,ona“donothing”basis;
ii. Refurbishmentworksarecarriedoutona“makedo”basiswithinthe
existingshell; or
iii. RefurbishmentworksonthelinesenvisagedbytheWardsCorner
Coalitionscheme (alsocalledthe“AlternativeScheme”).
i. Option1:“donothing”
4.24. Thefirstsituation,thattheMarketcontinueswithoutanyinvestmentatall,seems
extremelyunlikelytomefromamarketoperator’spointofview.Arational
investorholdinganassetliketheMarket(eitherthepremisesorthelease)would
notsimplyallowittocontinuetodegeneratefurtherovertheyearswithout
makinganyeffort toensureacontinuingreturnontheirinvestment.
4.25. However,evenifthemarketoperatororlandlordfailedtoinvestatallinthe
Market,rentsarealmostcertaintoincreaseoverthenextfew yearsanyway.The
Marketappearstobeundervalued by comparisonwithsimilaroperations
elsewhere andtheexistenceofawaitinglistoftraderssuggeststhatdemand
outstripssupplyforspace,puttingupwardpressureonlicencefees.
4.26. Althoughpredictinglicencefeeincreasesinthissituationoverthenextfive years
ishard,thefactsthattheMarketisfullandtherehavebeennoincreasesforyears
stronglysuggestthatcurrentrentscouldberaised.Inmyview,thiswouldbe
doneinincrementstoachievefeelevelsof,conservatively, around£75– £80/sqft
forthe“internal” unitsand around£100/sqft for“front”unitsafterfiveyears.
Thisisaboutinlinewithroughlysimilaroperationselsewhere(seeTableatpara
4.61).Thisequates torises of25–56.25%,around8%p.a.acrosstheMarket.
4.27. Onthisnote,Iaminformedby MAMSSLthatalicencefeeriseisexpectedinthe
shortterm,mostlikelyduringwinter2017-18.Theplannedincreasefor2017is
22
10%,raisingtherentto£66/sqftfor“internal”unitsand£70.40for“front”units,
withafurther10%increaseplannedfor2018,to£72.60/sqftfor“internal”units
and£77.44for“front”units.
4.28. Anyrisesafterthisinthecurrentsituationwillbeinlinewithinflation.Thisis
unsurprising giventhatfeeshaveremained staticforatleasttwoyears,probably
longer.ItisobviouslyunreasonableforTraderstoassumethattheycancontinue
atthecurrentratesindefinitely.
ii. Option2:“MakeDo”basis
4.29. Intermsofthesecond situation– theMarketbeingleftasitiswithonlythose
refurbishmentsnecessaryformaintainingthebuilding – IrefertoCBRE’s
“RepairsReport” (Appendix2).AsdiscussedaboveinSection3,itisclearfrom
theRepairsReportthattheserepairswouldbemerelyto“makedo”:keepingthe
markethallgoingbutnot addressingthefundamentalissueswiththebuildingas
awhole.
4.30. EvenwithinthescopeofassessingtherepairsnecessarytokeeptheMarket
going,theRepairsReportalsomakesclearthatthereareassociatedcostswhich
havenotbeenincluded.TheRepairsReportnotesthat“Wehavenotincluded
costsforre-installingandre-fittingeachstall/retailunittothebespoke
requirementsofeachlicensee”norfor“thereplacementofanyLandlord'sfixtures
orfittingswhichmaybemissingfromtheproperties,whichwehavenotbeen
madeawareof”(pp. 3-4).
4.31. Further,theRepairsReportexpresslylimitsitselftoconsideringthecostofworks
“undertakeninasinglephase. Stagedcompletionmayincreasecostsabovethose
reportedhere” (p.5).Thereisneither abudgetforTradercompensationforlost
businesswhilsttheworksarebeingdone,norforrelocatingthemtoatemporary
markettoenabletradingcontinuity.
4.32. TheRepairsReportalsonotesthat
To complete the scope of workswe have allowed for in this report, itwouldbenecessarytorelocatethesubtenants/licenseesforthedurationoftheworks,whichweconsiderwillbeapproximately20weeksonsite.There would therefore be additional costs to consider associated withsuchre-locationandprovisionofalternativeaccommodationduringtheworks.Wehavenot includedany costs in this report for re-locatingorproviding the subtenants/licensees with alternative accommodationduringtheworks. (p.5)
4.33. AllTraderswouldthereforeneed toleavetheMarketforbetweenfourandfive
monthsduringtherefurbishmentperiod.Thismeansthat additionalsumswould
23
beneededfor relocatingtheTradersorsubsidisingtheirlostincomeduringthe
refurbishmentperiod.Alternatively,Traderswouldbeatriskofbeing unableto
tradeforfourtofivemonths andlosingcustom.Itshouldthereforebenotedthat
either mylicencefeecalculationsforthisscenariomay betoolowtofund the
coststhatwouldactuallybeincurredbythisrefurbishment(certainlyifitwereto
bedonetothelevelofguaranteesintheDDV),or that therefurbishmentputsthe
Tradersat serious risk.
4.34. CBRE’s estimateis £1,239,000 forthe“makedo”worksneededtokeepthe
buildingfunctioning(includingVAT,giventhatthepropertyisnotelectedfor
VAT).OnthisbasisIhavecalculatedthelicencefeesrequiredtofinancethese
works.Ifanoperatorweretotakea10yearleaseatthecurrentrentandfundthe
“makedo”works– allowingforthecapitalrepayment,operatingcostsanda
margin fortheoperator – Iestimatethatfeeswouldneedtoriseto£85/sqft(plus
VAT) for“internal”unitsand£112/sqft(plusVAT)for“front”unitstomake it
viable.Thisequatestoimmediaterisesof,respectively,70%and110%including
VAT.IhavesetoutmyworkingsforthesecalculationsatAppendix3.
iii. Option3:theWardsCornerCoalition Scheme
4.35. The third situation– refurbishment asenvisagedbytheWardsCornerCoalition
scheme – wouldalsomeanthatthecurrentratesforthe marketoperator’srent
andTraders’licencefees wouldrise.
4.36. IftheMarketweretoremaininthecurrentbuilding,thenanylongtermfuture
agreement betweenlandlordandmarketoperator wouldbecertaintocontaina
scheduleofworkswhichwouldrequiresignificantcapitalinvestment intothe
fabricandupkeepofthebuilding.IftheOrder schemehadnotbeenbrought
forwards,Idonotthinkthatthe Marketwouldbeallowedtocontinueinits
presentdilapidated,shabbystate,wellconcealedfrompassers-byandwithout
anycoordinatedmarketingorpublicpresence.
4.37. Thiswouldhavesignificantupwardpressureonlicencefeesintwoways:
i. Thelevelofinvestmentandrefurbishmentwhichwouldberequired
would undoubtedlycreate enormouspressuretoincreasethelicence
feeschargedtoTraders.Itisinconceivablethatanyinvestor wouldbe
ableorwillingtoabsorbthecostsofcarryingouttheseextensive
buildingworks inordertomaintaintheTraders’currentlicencefees.
ii. Anycapitalinvestmentofthistype(and,forclarity,thesameappliesto
Option2,consideredabove)wouldalmostcertainlyresultinthebuilding
beingbroughtintotheVATscheme bywhoeverfundstheproject,in
ordertorecoupthe20%VATchargedonbuildingcosts.Thiswould
24
resultinTradersthenbeingchargedVATontheirlicencefees.Charging
theTradersVATistherefore,realisticallyspeaking,almostinevitable
althoughitwouldbeabusinessdecisionforwhoevertookontheproject.
Icannotimagineasituationwhereaninvestorwouldspendthelarge
sums requiredtorefurbishamarketandelectnottorecoupthe20%
VATincurredonbuildingcosts,especiallyatthese levels.
4.38. A reportbyArcadishasestimatedthelikelycostsofundertakingtheWCCscheme
arearound£3,091,000 forthemarkethallalone(seeMrFourt’sProof).Theonly
indicationofcosts givenby theWCCis“Aprovisionalcostinghassuggestedthe
visionmaycostupto£13million”(DesignandAccessStatement,p.93).
4.39. TheWCCschemealsogivesno details aboutrent,sayingonlythat“theTrusthasa
commitmenttotheexistinglicenceholdersto keeptheirrentfairand
reasonable…Basedoncurrentassumptionsitishopedtherentalvaluewillnotbe
subjecttofurtherincrease,howeveroncemarketfactorsarebetterestablished
thismaychange” (DesignandAccessStatementp.91).Itisclearlyenvisagedthat
therewillbesomeincreaseinlicencefees,therefore,butnoindicationofthescale
oftheincrease.
4.40. Thelackofdetailavailablefor theWCCschememakes calculating futurelicence
feelevels extremelydifficult.AsIdiscussinSection7below,themainissuewith
this schemeisthatthereisnodefiniterelocationandcontinuityplan.Thereisa
referenceto theMarketbeingrelocatedintothe“cornerbuilding” duringthe
worksbut,bymycalculation, thiswillonlyaccommodate37%oftheTraders.
4.41. Giventhelevels ofestimatedinvestmentrequiredforthis scheme,itis
inconceivablethattherewouldnotbeanupwardpressureonlicencefees.
Licencefeeswouldhavetorise,eventhoughtheWCCis proposingtomanagethe
marketinternallyandtherewouldthereforebenoneedtohaveaprofitmargin
foramarketoperator.
4.42. Ibelievethattherewouldbe– asanabsolute minimum– anincreaseinlicence
fees tothelevelsofthefixedschemeofLicenceFeessetoutintheDDV(discussed
below):£75/sqftforZoneAunits,£65/sqftforZoneBunitsand£80/sqftfor
cateringunits.Isaythatthiswouldbetheminimumincreasebecause these are
genuine figureswhichhavebeenarrivedatafternegotiationbetweenadeveloper
willingtofundtheprojectandanoperatorwillingtotakealease;theseare
figuressupportingaliveandviableproject.Withthebestwillintheworldtothe
Traders,IdonotbelievethattheWCCwouldbeabletochargeless.
4.43. Infact,itisfarmorelikelythattheWCCschemewouldrequiremuchmore
significantincreases.InotefromMrFourt’sproofthat,withtheincomeprovided
bytheDDV-guaranteedlicencefees,theWCCschemeisunviable andwouldmake
25
aloss.Theneedtoavoidmakingaloss,nevermindachievinganyprofit,will
place significant additionalupwardpressures onlicencefees.Ialsorepeatthat
thebusinesscontinuityaspectoftheWCCschemeremainsunproven:thisisa
majorthreattotheon-goingviabilityofthe Market.
4.44. Inmyview,therefore,itis inevitablethatTraderswouldbechargedhigher
licencefeesintheMarket’smediumtermfuture:
i. EvenifnothingisdonetotheMarket,giventheperiodoftimeforwhich
thefeeshavebeenstatic,anymarketoperatorislikelytobegintesting
thewaterstoseewhattheTraderscouldafford andMAMSSLislikelyto
raisethefeesthiswinter;
ii. TheMarketdesperatelyneedsinvestmentandcannotcontinueinits
presentstateformuchlonger:theinvestmentrequiredwouldbecertain
toleadtoincreasedlicencefees;
iii. AnyinvestorisequallycertaintoseektorecoupVATcosts ofthe
necessaryimprovements byregisteringthebuildingintheVATscheme,
suchthatTraderswouldthereforebechargedVAT.
4.45. Therefore,evensupposingthatGrainger’sschemenevergoesahead,itismy
opinionthatlicencefeerisesarenearinevitable.Ifanyrefurbishmentofthe
Marketisundertaken,whichisthemorelikelyscenario,thennotonlywillthere
bebasiclicencefeeincreasesbutVATiscertainlygoingto beaddedontop.The
onlyreferencetorentlevelswithintheWCCschemeisto“keeprentlevelsfair
andreasonable”.
iii) FutureRentLevels:ComparatorMarkets
4.46. Whenconsideringpossiblefuture rentlevels fortheMarket,otherindoor
marketscanbestudied ascomparatorcasesbuttheseareoflimitedvalue.Every
managementcompanyoroperatorappearstoapplydifferentcriteriaastohow
theyarriveattheircurrentrentlevels andthereare manydifferentfactorsat
play.This makes itverydifficultto comparemarketsdirectlytoanyusefulextent.
Everythingisnegotiableandnothingispublic;inparticulartradersarenot
obligedtorevealtheirturnoveror other detailstothemarketoperators.
4.47. Below,IexaminetherentschargedinfourdifferentLondon indoor markets.I
havechosenNagsHeadandWoodGreenbecausetheyareveryclosetothe
currentmarketandareofsimilarkinds.ThemarketsatTootingandTooting
Broadwayarefurtheraway butareofaverysimilarnature;indoormarketswith
operatorssublettingtosmallindependenttraders.Allofthesemarketshavea
verydiverseethnicmixwithAfricanandAsiantradersstronglyrepresented.
26
4.48. ThereisamarketatElephantandCastlewhichhaspreviouslyhadasignificant
LatinAmericanelement,althoughthishasdeclinedandnosingle ethnicgroupis
nowdominant.Itiscurrentlyawaitingredevelopmentandisnotcomparablein
anyusefulwaywiththecurrentSevenSistersMarket:amongotherfactorsithas
manyoutdoor stallsandtherearefewertraders.Itshouldbenotedhoweverthat
anoutdoorunitdoescost£88/sqftonanall-inclusivebasis.
4.49. NagsHead,Holloway isperhapstheclosestintypeandlocation tothecurrent
market.ThestallsareverysimilarinnaturetothoseinthecurrentMarket:fresh
produce,commoditiessuchasDVDsandclothesandsomebeautystallssuchas
nailbars,althoughtherearenobusinessservicessuchaslettingagents.There
areapproximately60units.Themanagementcompanyusesasystemof
individualrentsforeachTraderandthereisadegreeofnegotiationforeach
individualstall.AtypicalrentatNagsHeadis£138/sqft p.a. andeachstallis64
sqft.Thisincludesallservices andbusinessrates,saveelectricitywhichis
chargedseparately.VATisnotcharged.Therentvariesanddependsonfactors
suchascurrentsupplyofspace,required openinghoursandtheproposed
commodityforthestall.Thereisalwaysapremiumpayableforcookedfood
stalls,ascustomisusuallygoodatthesestalls.
4.50. Intermsofsecurityarrangements,each stallisindividuallylockable andthe
markethasCCTVcoverage.Therearethreeloadingbaysavailableforservicing
anddeliveriestothemarket.Thereisnotraderorcustomerparking.
4.51. Fromatrader’s pointofview,NagsHead isasuccessfulmarketandthisrelatively
highrentlevelreflectsthedemandandvitalityofthisretailenvironment.There
areacoupleofvacanciesbutnotmany. Themarketisopeneverydayoftheweek.
4.52. ThecurrentmarketbuildingatNagsHeaddoesrequiresomeupdatingand
investmentasithasbecomerathershabby,particularlyitsaccess points,frontage
andpublicentrances.Theownersareintheprocessofimprovingthebuilding,
withparticularattentionbeingpaidtothepublicfacingareasandsignage.They
havealsorecentlyupdatedtheirwebsite,whichisnowwell-designed,informative
andusesTwitter,Facebook,Google+,InstagramandYouTube.5Thisisa
particularissuefortheSevenSisters Market,whichishardtoidentify,haspoor
signage andverylimitedonlinepresenceaimedatpromotingtheMarketitself.
4.53. WoodGreenMarket iscontainedwithinanareaofWoodGreenShopping
Centre.Itisrelativelylocal,atjustundertwomilesfromthecurrentMarketand
hasover20,000sqftofnetrentablespace fortraders’stalls,whichisfarlarger
thanSevenSisters Market.Thereare78units/stallsinthemarket.WoodGreen
5 http://nagsheadmarket.com/accessedon1st June2017.
27
isoperatedbyCapital&Regional,whichdevelopedthismarketinanarea ofthe
ShoppingCentre thatwasdeemedunsuitable fortheirexistingtenantbase,asit
wasalargerearcornerplotwithlimitedaccess.Itisopeneverydayoftheweek
(withshorterhoursonSunday).Thetradershaveaccesstoloadingbaysand
therearesomesubsidisedtraderparkingspaces withinthecomplex.Thereis
alsopublicparkinginthemulti-storeycarparkneartheshoppingcentre.
4.54. Capital&Regionalcurrentlycharge£40sqftp.a.plusVAT.Thisdoesnotinclude
services:electricityandbusinessratesarechargedinaddition.The“stalls”at
WoodGreenareverypermanentinnatureandhave theappearanceofsmall
shops.Thereisnotmuchfluidityorturnoveroftraders,perhapsoneortwoper
year.Everystallisoccupiedandthereisawaitinglistofbusinessesreadytostep
intostallswhichbecomevacant.Thebuildingiswellkeptupandhasnopresent
needforinvestment.Thewebsiteisup-to-dateand givesdetailsofthe
stallholders,openingtimes,events,afloorplanandsoon.6
4.55. Ibelievethatthefullmarketoccupancy andwaitinglistsignalsthatWoodGreen
isperhapsundervaluedbutitservesapurposefortheownersoftheproperty.
Thespaceusedforthemarketisunattractivetoanysinglecommercialentitywho
mightrentitasatraditionalshopspace.Theoperatoristhereforemakingafar
betteruseofitsspacebyrentingitoutcomparativelycheaplyasafullylet
market.InotethatintheUSMReporttheWoodGreenmarketislistedas
charging£91/sqftp.a. (p.10).Thisisausefulindicationofjusthowsignificantly
circumstancescanchangeinamarketoversuchaperiodoftime.
4.56. Inmyview,WoodGreenissomethingofananomalyintermsofitslowrent.It
shouldbenotedhowever,thatVATischargedandtherentdoesnotinclude
businessratesoranyservices,unliketheothermarketsconsideredhere.
4.57. TootingMarket isoperatedslightlydifferentlyfromWoodGreenandNagsHead
markets, inthattheoperatorherehasoverrecentyearsmadeaconcertedeffort
toimprovetheofferwithinthemarket.This particularoperatorplacesmuch
emphasisonofferingawidemixofstallssellingotherwiseunrepresentedand
unusualproductsandhasofferedrentincentivesalongwithaveryactive
marketingstrategytoassistwiththis.Themodelappearstobesuccessfulasthey
willbeadding7,000sqftofretailspacetothemarketinJune2017.Hotfood
stallsarechargedapremiumastheyprovidea reliable incomestream.
4.58. Therearearound50unitsof100sqfteach,withrents varyingbetween£55and
£80sqft.Thisincludesbusinessratesbutexcludeselectricity,whichispaid
separately.VATisnotcharged. Theirturnoverrateoftradersisaroundoneor
6 https://www.themall.co.uk/wood-green/shop/market-hall/ accessedon1st June2017.
28
twoperyearandtherearecurrentlynovacantstalls.AsatNagsHead,thereare
threeloadingbaysavailableforservicinganddeliveriestothemarket.Thereis
notraderorcustomerparking.
4.59. Themarketispromotedthroughalivelyandwell-designedwebsitegivingdetails
ofitsstalls,openinghours,eventsandinformationforprospectivestallholders.7
ItisasuccessfulmarketandInotefromthewebsitethatithasbeenrepeatedly
praisedoverthelast12months:
i. Winnerofthe“BestSmallIndoorMarket”awardattheGreatBritish
MarketAwards2017;
ii. WinneroftheTimeOutLoveLondon,2016;
iii. Winnerofthe“WandsworthBusinessoftheYear”categoryand“Highly
Commended”inthe“BestIndependentRetailer”categoryatthe
WandsworthBusinessAwards2016.
4.60. TootingBroadwayMarket isalsoverysimilartoSevenSistersin itsmixof
stalls,whichinclude some freshproduce,clothing andhomeware stalls,although
thismarketalsolackstheservice-basedstalls inSevenSisters Market.The
operatorcurrentlycharges£70sqft,includingbusinessratesbutnotelectricity.
VAT isnotcharged.It hasnovacantstalls.Itisopensevendaysaweek.
4.61. The markethall isratherold andthereisaneedforinvestmentinthemediumto
longertermfuturebuttheneedisnothinglikeaspressingasitisfortheSeven
Sistersmarket. Therearetwoloadingbaysavailableforservicinganddeliveries
tothemarket.Thereisnotraderorcustomerparking.Themarketpromotes
itselfthrough aTwitteraccountwith1,600followers.Theaccount isveryactive
inpostingphotographs,eventdetails,reviewsandre-tweetingfollowers’poststo
createanimpressionofasuccessfulmarket.
7 https://tootingmarket.com/ accessedon1st June2017.
29
Table:ComparisonofMarketswithSevenSistersIndoorMarket
Market Licence
Fee/sqft
p.a.
VAT Average
unitsize
Days
Open
Servicesin
addition
Other
Seven
Sisters
£60 (av.) No 100sqft 6days Rentincludes
“servicecharge”
Electricityseparate
Investment
needed
Novacancies
NagsHead £138 No 64sqft 7days Electricityseparate Investment
needed
Fewvacancies
Wood
Green
£40 Yes 250sqft 7days Electricityseparate Novacancies
Tooting £55– £80 No 100sqft 7days Electricityseparate Novacancies
Tooting
Broadway
£70 No Unknown 7days Electricityseparate Novacancies
Businessrates
includedinrent
iv) RecommendationforaRiseinLicenceFees
4.62. Assetout above,inmyview,thecurrentlicencefeesarerelativelylowcompared
withwhatthemarket operator shouldbeabletochargeforamarketofthistype
andinthisprimelocation.Thesefeeswouldalsobeunsustainableinthefuture in
anyevent,giventhealmostcertainrequirementforsignificantinvestmentinthe
fabricofthebuilding intheneartomediumtermfuture.Anincreasefrom
£60/sqftand£64/sqftwouldthereforebeinevitable,regardlessofwhether
Grainger’sscheme takesplaceor not.
4.63. TheOrderScheme offersanundoubtedopportunitytomaintainandgrowthis
market,bothwhilstitisintheTemporaryMarketandwhenitreturnstotheNew
MarketArea.Amongotherfactors,theplannedimprovementstothequalityand
safetyofthebuiltenvironment oftheNewMarketAreawillbesignificantandare
verylikelytoproveofgreatbenefittotheMarket’sabilitytoattractvisitors.The
increasedemphasisonthepublicentrancesandtheimprovedsignagewill
certainlyattractadditionalfootfallcomparedwiththecurrentsituation
(discussedabove).Mr Beharrell’sProofprovidesdetailonhowthefrontage
designwill“provideahighdegreeofvisibilityforthemarketandtheopportunity
forextensivesignage” (para.4.5.4,also3.3and4.3.2; and seemyAppendix4).
4.64. FromthedrawingsandplansthatIhaveseen,theseimprovementsinthequality
ofthebuiltenvironment,signage,publicaccessandsoonwillalsoapplytothe
TemporaryMarket.
30
4.65. Indeed,theMarketiscurrentlysowell-concealedfromthecasualpasser-byandis
insuchclearneedofrefurbishing,thatanyimprovementstoitsvisibilityand
upkeepwouldbelikelytoattractmorecustomers.Asdiscussedabove,the
Market’sprimelocationrightoverabusyundergroundstationandnextto
numerousbusroutesisalmostentirelysquanderedatpresent;thepotentialfor
attractingmorecustomersisobvious.USMcametothesameconclusionin2008:
“thereislikelytobeverylittlepassingtrade... thatlimitstheeconomicimpactthat
themarketcanhaveforitstraders.Theywouldmakemoremoney,aswouldthe
manager,ifthereweremoreofaretailenvironment...created”(p.11).
4.66. Increases infootfallandcustomernumbersthrough thephysicalimprovements,
inadditiontothebusinessimprovementsbroughtaboutbytheroleoftheMarket
Facilitator (discussedbelow),willundoubtedlyincreaselevelsoftrade.Traders’
profitswouldthereforebelikelytorise.(IshouldnotethatIhavenotseen
figuresforanycurrentTraders’ turnoverorprofitlevels:thereisnoobligationon
Traderstoprovidethesetothemarketoperator).
4.67. AdvertisingtheMarket’smovetotheTemporaryMarketanditsreturntothe
NewMarketArea– forexamplethoughaplannedsocialmediacampaign– would
alsoattractnewcustomers.Asanexamplefrommyownexperience,an
unexpectedconsequenceoftherecentFlowerMarketrelocationatNewCovent
GardeninMarch2017 wasadramaticupsurgeinmembersofthepublic
attendingwhatwaspreviouslyapredominantlywholesalemarket,entirelydueto
mediaexposureandincreasedsocialactivity.IdealwithadvertisinginSection5.
4.68. WiththeTemporaryMarkettoensurecontinuityduringtheconstructionperiod
andthesubsequentrelocationtoapermanent,purpose-builthome, Grainger’s
proposalsdoeverythingpossible to secureanenhancedfutureforthe Market.
4.69. Onthisbasis,a modestrisein licencefeesforTraders wouldbetherefore entirely
reasonableinmyview.Theidealsituationwouldbetoraisethefeesandfixthem
throughoutthetworelocations untiltheNewMarketAreaiswell-establishedasa
thrivingmarketandIdiscusstheDDVobligationsonthisbelow(paras4.80-102).
4.70. Marketsarerarelystaticandtherewillinevitablybeadegreeof“churn”among
stallholdersoverthesetwo relocationsuntiltheMarketissettledintotheNew
MarketArea.AnynewtradersenteringtheTemporaryMarketortheNew
MarketAreawillhavetheirfeessetbytheMarketOperatorintheusualwayand
thesuccessorfailureofthosetraderscanallbegatheredasinvaluableevidence
ofwhatlicencefeestheNewMarket Areaunitscancommand.
4.71. By aroundtwoandhalfyearsintotheoccupationoftheNewMarketArea,the
MarketOperatorwillbewellplacedtoassesswhatlicencefeestheTraderscan
sustaininthenewcircumstancesoftheNewMarketArea.Itwillthenbeentirely
31
appropriatefortheMarketOperatortobereleasedfromthestructureoffixed
licencefeesappliedtotheoriginalMarket Tradersandtobeginsettingfeesat
whateverlevelstheNewMarketAreastallscommand.
4.72. Inmyexperienceofbothindoorand outdoormarkets,nofinancialinformationis
sharedbetweenthemarkettradersandthemanagementcompaniesorlandlords,
soalllicencefee-relateddecisionsaremadeontheperceivedsituation,anecdotal
evidenceandtheindividualoperator’sexperience ofthatspecificmarket.The
onlytrueindicatorsoftheviabilityofanymarketarewhethertherearetraders
whoarepayingtheirrent andthelevelsofvacantstalls.
4.73. Allofthemarketagreementsareshortterm(usually12months)andincludea
four weekbreakclause.If tradediminishestoasufficientlylowlevel,then
traderssimplywalkawayanditisnotworthwhilefortheoperatortopursue
defaultingtradersforunpaidrent,giventheinevitableadversepublicityand the
factthatitisveryunlikelythattheoperatorwouldeverrecoveranyunpaidrent.
4.74. Itisthereforeveryimportanttoemphasisethatsettingaviablerentistherefore
intheMarketOperator’sinterestsjustasmuchasitisintheTraders’.
4.75. Onereasonforsayingthattheriseinlicencefeesshouldbemodestisinorder to
allowTraderstoadjusttotheintroductionofVAT,whichisnotcurrentlycharged
intheMarket.IaminstructedthatthiswillbechargedintheTemporaryMarket
andtheNewMarketArea.
4.76. TheMarketFacilitatorshouldaddresswithindividualTraderstheiroptionsover
whethertoregisterforVATandmanagingVAT-relatedadministration.Itwillbe
vitalforindividualtraderstoconsiderwhethertoabsorbthecostofVATandtake
areductioninprofits, orwhethertoregisterforVATbuthavetopassonan
increaseinpricestotheircustomers.
4.77. ItismuchtoocomplicatedanexerciseforthisProoftoaddresstheissueofVAT
nowinrelationto thesituationsof individualTraders;itisenoughformetostate
thattheTraderswouldhaveoptionsastohowtheydealwithVATandthiswould
bepartoftheMarketFacilitator’sdiscussions.
4.78. AsIhaveexplainedabove,inmyviewitisessentiallyinevitablethatTraders
wouldhavetocopewiththeintroductionofVATontheirlicencefeesinthe
mediumtolongtermfuture,whethertheOrderSchemegoesaheadornot.So
whilstatleastsomeoftheTraders(thosewhocannotreclaimit)willtherefore
experienceanincreaseintheirbusinessexpenses,VATisinevitableinanyevent.
Itisalsoataxandnotariseinlicencefeesassuch.Inmyanalysisofthefigures
belowIhavethereforeexpressedlicencefeesas“£XplusVAT”.
32
4.79. Practicallyspeaking,itisthereforeimportanttoacknowledgethatVATwillbe
charged,sothatTraderscanprepareforthisincreaseintheirbusinessexpenses.
However,itshouldbenoted:
i. Thatthisincreasewas essentially inevitableandshouldnot beattributed
toGrainger ortheOrderSchemeperse;
ii. Theincreaseshouldnotbeoveremphasised;
iii. TheapplicationofVATisamajorreasonwhytheLicenceFees will
remainfixeduntil30monthsintotheNewMarketArea,assetoutbelow.
v) TheLicencesFeesObligationsintheDDV
4.80. The DDV isanenormousimprovementfromtheTraders’perspective,providing
absolutecertaintyonlicencefeesoverthecrucialperiodsandwell intotheNew
MarketArea,alongwithgenerousdiscountsfortheearlystagesofboth
relocations.ThiswillgreatlyassisttheTradersinestablishingtheirbusinessesin
theTemporaryMarketandtheNewMarketArea.
4.81. Schedule2oftheDDV(p.7)sets outtheLicenceFeesfortheTemporaryMarket
andtheNewMarketAreaindetailandforseveraldifferentsituations:
Licence Fee means the following licence fee which (in each case) isbasedonthecurrentaveragelicencefeeintheMarketbeing£60persqftor, if the opening of the Temporary Market is significantly delayedthroughnofault,actionoromissionof(orby)theDeveloper,suchotherlicence feeasmaybeagreed inwritingbetween theDeveloperand theCouncilPROVIDEDTHATeachlicencefeeshallbesubjecttoanincreaseoftwopercent(2%)perannumfor:
i. solongastheTemporaryMarketisinoperationinthecaseofeachAcceptedQualifyingTrader;and
ii. the first thirty (30) months from the opening of the NewMarket Area to the public in the case of each AcceptedQualifyingTemporaryMarketTrader:
33
TemporaryMarket
Nature/LocationofUnit LicenceFee(£/sqft)(excluding
VAT)
Mezzanine 35
ZoneA(asmarked'ZoneA'(forillustration
purposes)ondrawingnumber160176-3DR-CO-
00-DR-TN-0001P01appendedtothisDeed)
75
ZoneB(asmarked'ZoneB'(forillustration
purposes)ondrawingnumber160176-3DR-CO-
00-DR-TN-0001P01appendedtothisDeed)
65
Anyunitprovidingcateringservicestothepublic
(includingthepreparationoffoodonthe
premises)
80
NewMarketArea
Nature/LocationofUnit LicenceFee(£/ sqft)(excluding
VAT)
ZoneA(i.e.thoseunitsshadedblueondrawing
numberSK551RevAappendedtothisDeed)
75
ZoneB(i.e.thoseunitsshadedredondrawing
numberSK551RevAappendedtothisDeed)
65
Anyunitprovidingcateringservicestothepublic
(includingthepreparationofanyfoodonthe
premises)
80
4.82. I discussbelowinSection5howtheDDV categorisestheTradersandwhocomes
withinthecategoriesof“AcceptedQualifyingTrader”,“AcceptedQualifying
TemporaryMarketTrader”andsoon.HereIsimplydealwiththefiguresforthe
LicenceFees.
4.83. Ascanbeseenfromthedraftplans atAppendix 5,in boththeTemporaryMarket
andtheNewMarketArea“ZoneA”unitswillbepremiumunitswhichwillhave
thehighest levelsofexposureintheMarket.“ZoneB”unitswill befurtherfrom
theentrancesandwithoutanydirectexposuretothestreet;thelicencefeesare
correspondinglyslightlylower.
4.84. Asdiscussedindetailbelow,theTemporaryMarketwillbeintheredeveloped
ApexHouse anditslocationrightnexttothecurrentMarketisvitaltoensurethe
continuedsuccessoftheTemporaryMarket.ApexHouseisnotthesameshapeas
34
thecurrentMarket hall.Inordertoguaranteeaccommodationforallcurrent
TradersintheTemporaryMarketandanequivalentnetspaceof6,200sqft,itwill
benecessaryforsomeTraderstoberelocatedontoamezzaninefloor.
4.85. Asdiscussedbelow,theMarketFacilitatorwillworkwithindividualTraders
nearerthetimetoidentifywhichbusinessesrelylessoncasualcustomersandso
willbeleastaffectedbybeingonamezzaninefloor.Forexample,business
services(likelettingagencies,hairdressersormoneytransferagents) relyfarless
oncasualpassersthanjuicebarsandhotfood stalls.Itisareasonableand
appropriatemeasuretoofferasubstantialdiscountforbusinessesthatwillbe
locatedonthemezzaninefloor,tooffsetanyinitiallossofbusinessandtogivethe
businesstimetoadvertiseandbecomeestablishedintheTemporaryMarket
(therewillbenomezzaninefloorintheNewMarketArea).
4.86. Traderswho“provid[e]cateringservicestothepublic(includingthepreparation
ofanyfoodonthepremises)”willbeonaflatrateof£80.Iaminstructedthat
theseTraderswillallbe in primelocations,asthesebusinessesrelyheavilyon
casualpassingtrade,andwillnotbeonthemezzanine.Fromamarketoperator
pointofview,hotfoodstallsareverydesirablenearentrancesorathighlyvisible
pointsinamarket,astheyareverypopularandservetodrawincustomers.Iam
thereforesatisfiedthattherewillbenoTradersprovidingfoodonthemezzanine
level(oralessaccessiblelocation) andyetstillpayingahigherrateof£80.
4.87. Assetoutabove,currentLicenceFeesare£60/sqft for“internal” unitsand
£64/sqftfor“front”units.
4.88. OnmovingtotheTemporaryMarketthefirstthreemonthswillbea“licencefee-
freeperiod”(see“Offer”,Sch.2,p. 9, DDV),duringwhichtimetherewillbenorent
chargedto“AcceptedQualifyingTraders”(thoseTraderswhoareintheMarket
forthreemonthsbeforetheClosureNotice andaccepttheofferofrelocationto
theTemporaryMarket:see“QualifyingTrader”,Sch.2, p. 9, DDVandbelow).
4.89. Afterthefirstthreemonthslicencefee-freeperiod,thefollowinglicencefeeswill
thenbecharged:
i. Tradersonthemezzaninewillpay£35/sqftp.a.;
ii. TradersinZoneAwillpay£75/sqftp.a.;
iii. TradersinZoneBwillpay£65/sqftp.a.;
iv. Caterers(whowillbeinprimelocations)willpay£80/sqftp.a.
(seep.7 DDV)
4.90. A2%increaseperyearwillbeappliedtothesefees.Assumingabuildtimeon the
NewMarketAreaoftwoandahalfyears,this meansthatthelicencefeeswill
increaseby2%twicewhilsttheTemporaryMarketisinoperation.
35
4.91. OnrelocationtotheNewMarketArea, traderswhohadbeenintheTemporary
MarketforoverthreemonthsbythedateoftheNewMarketAreaScheme
(“QualifyingTemporaryMarketTraders”,Sch.2,p.9 DDV)willpaythefixed
licencefees discountedby30%:
i. TradersinZoneAwillpay£52.50/sqftp.a.;
ii. TradersinZoneBwillpay£45.50/sqftp.a.;
iii. Catererswillpay£56/sqftp.a.
4.92. Thesefeeswillapplyforthefirst18monthsintheNewMarketArea.Again,a2%
increasewillbeappliedoneveryanniversary oftheNewMarketAreamoveand
theapplicationofthesenewLicenceFees.After18months,the30%discountwill
expireandallLicenceFeeswillreverttotheLicenceFeesgiveninthetable:
i. TradersinZoneAwillpay£75/sqftp.a.;
ii. TradersinZoneBwillpay£65/sqftp.a.;
iii. Caterers(whowillbeinprimelocations)willpay£80/sqftp.a.
4.93. These LicenceFees willthencontinueforanother12months,makingatotalof
30monthsintotheNewMarketAreawhichisgovernedbytheDDV.
4.94. Below Ipresenttwo tables showingwhatthesefeeswouldmeaninpracticefor
theseven mostcommoncategoriesofTraders:
i. Tradersin “internalunits”on£60/sqftwhomovetoZoneBforboththe
TemporaryMarketandtheNewMarketArea;
ii. Tradersin“internalunits”on£60/sqftwhomovetoZoneAforboththe
TemporaryMarketandtheNewMarketArea;
iii. Tradersin“frontunits”on£64/sqftwhomovetoZoneAforboththe
TemporaryMarketandtheNewMarket Area;
iv. CateringTradersin“internal”units;
v. CateringTradersin“front”units;
vi. Tradersin“internal”units on£60/sqftwhomovetotheTemporary
MarketmezzanineandthenZoneAintheNewMarketArea;
vii. Tradersin“internal”unitson£60/sqftwhomovetotheTemporary
MarketmezzanineandthenZoneBintheNewMarketArea.
4.95. IhavecalculatedwhattherentwouldbepersqftafterthefiveyearsoftheDDV
licencefeescheme, includingthe2%annualincreases andoneachalterationto
thefees.Ihavecomparedthiswithfiveyearsunderthecurrentrentsof£60and
£64/sqft,plusa2%annualincrease,andcalculatedthepercentagedifferences
36
betweenwhatTraderswouldpayoncurrentrentsandunderthesevendifferent
scenariosinGrainger’sscheme.Table1excludesVATandTable2includesVAT.
4.96. WhenmakingthesecalculationsIhavemadethefollowingassumptions:
i. Thecurrentfeesof£60/sqftand£64/sqftincreaseby2%p.a.;
ii. Ihaveignoredthetwoprojected10%increasesin2017and2018
announcedbyMAMSSL;
iii. NoVATisaddedtothecurrentfees,eventhoughIstillbelieve thatVAT
will beintroducedonTraders’fees evenwithoutGrainger’sscheme;
iv. A movetotheTemporaryMarketof1stJanuary2018(forsimplicity);
v. TemporaryMarketfeesthereforebeginon1st April2018,andthe2%
increasesthereforeoccuron1st April2019and2020;
vi. TwoandahalfyearsintheTemporaryMarketbeforethemovetothe
NewMarketAreaon1st June2020;
vii. The30%discountonNewMarketAreafeeslastsfrom1st June2020until
30th November2021,witha2%increaseoccurringon1st June2021;
viii. ThefullNewMarketAreafeescommenceon1st December2021andthe
first2%increaseonthosefeesoccurson1st December2022 beforethe
expiryofthefixedfeeregimeon1st January2023.
37
Table1:LicenceFeesacrosstheFiveYearPeriod(excludingVAT)
TOTAL/SQFTTOTAL/
100 SQFTSTALL
PERCENTAGE
DIFFERENCE
CurrentInternal £317.78 £31,777.71
CurrentFront £338.89 £33,888.77
i.InternaltoZoneB £287.42 £28,741.83 -9.55%
ii.InternaltoZoneA £331.58 £33,157.50 4.34%
iii.FrontUnitstoZoneA £331.59 £33,158.50 -2.16%
iv.Internal to Catering £353.67 £35,366.83 11.29%
v.FronttoCatering £353.67 £35,366.83 4.36%
vi.InternaltoT.M.
MezzaninetoZoneA£243.89 £24,388.50 -30.26%
vii.InternaltoT.M.
MezzaninetoZoneB£221.62 £22,161.50 -23.25%
Table2:LicenceFeesacrosstheFiveYearPeriod(includingVAT)
TOTAL/SQFTTOTAL/
100 SQFTSTALL
PERCENTAGE
DIFFERENCE
CurrentInternal £317.78 £31,777.71
CurrentFront £338.89 £33,888.77
i.InternaltoZoneB £344.90 £34,490.20 8.54%
ii.InternaltoZoneA £397.89 £39,789.00 25.21%
iii.FrontUnitstoZoneA £397.90 £39,790.20 17.41%
iv.InternaltoCatering £424.40 £42,440.20 33.55%
v.FronttoCatering £424.40 £42,440.20 25.23%
vi.InternaltoT.M.
MezzaninetoZoneA£265.94 £26,593.80 -16.31%
vii.InternaltoT.M.
MezzaninetoZoneB£292.66 £29,266.20 -7.90%
4.97. IhavesetoutmydetailedcalculationsforTable1andTable2atAppendix6.
38
4.98. Iacknowledgethatallthesecalculationsuseasthe“base”figuretheaveragerents
currentlypaidforthe“internal”and“front”units.Therewill,ofcourse,besome
differencesbetweenwhatindividualTraderscurrentlypayandtheaverage
figure.Againstthat,itisclearthatlicencefeesintheMarketare,inanyevent,on
anupwardtrajectoryand,howevermattersproceedfromhere,anyonepaying
“belowaverage”licencefeescanexpecttoseematerialincreasesintheirrentto
contributefairlytowardsthecostsoftheessentialinvestmentintheMarket.
4.99. Thus,evenwhencomparingcurrentrentstotheproposedfeesincludingVAT,
Table 2showsthatthelargestincreaseoverthefiveyearsoffixedfeesis33.55%
forthoseTradersin“internal”unitswithcateringbusinesses,followedbyTraders
in“front”unitswithcateringbusinesseswitha25.23%increaseoverfiveyears.
Anincreaseof33.55%overfiveyearsisanaverageincreaseof6.71%peryear.It
canalsobeseenthat,evenincludingVAT,twocategoriesofTraderswillpayless
thanundercurrentrents (thoseininternalunitswhogotoZoneAorZoneBvia
theTemporaryMarketmezzanine).
4.100. IfonesetsVATtooneside,usingthefiguresinTable1,fouroutoftheseven
categorieswillpaylessthantheircurrentrates.Tradersininternalunitswhogo
toZoneAviatheTemporaryMarketmezzaninewillpay30.26%lessoverthefive
yearsthanatpresent andthose whomovetoZone Bviathemezzaninewillpay
23.25%less.
4.101. Further,onthebasisofthefigurescalculatedabove, underGrainger’s
schemetheTraderswillbepayinglowerlicencefeesthanunderthe“donothing”
option,the“makedo”optionortheWCCscheme(seeparas4.26;4.34;4.42-43):
i. “Donothing”:internalunitsatbetween£75– £80/sqftand“front”units
ataround£100/sqft;
ii. “Makedo”:£85/sqft(plusVAT)for“internal”unitsand£112/sqft(plus
VAT)for“front”units;
iii. “WCCscheme”:usingthefixedDDVfiguresasaminimum,theWCC
schememakesaloss.Itisthereforecertain thatthelicencefeeswould
havetobehigherthanthoseinthefixedDDVscheme,althoughIam
unabletosayhowmuchhighergiven thelackofdetailontheintended
businessmodelandtheintentionnottouseamarketoperator.
4.102. Finally,InotethattheNewMarketAreaSchememustinclude “anobligation
tosetlicencefeesintheNewMarketAreaatalevelthatisconsistentwiththe
Council'spolicyobjectivetoattractandpromotelocalindependenttraders”(Sch.
2,p.9,DDV).ThisrequiresGraingertoensurethattheMarketOperatordoesnot
setfeeslikelytodriveoutTradersaftertheLicenceFee periodoffiveyearsis
39
over.IrefertoMsJohnson’sProof fordetailsoftheCouncil’spolicieswhichare
relevanttoattractingandpromotinglocalindependenttraders.
vi) Analysis oftheLicenceFeesStructure
4.103. Inmyview, theLicenceFees acrossboth relocations andfor30monthsinto
theNewMarketArea, plus thethreemonths’LicenceFee-freeperiodanda30%
reductionforthefirst18monthsoftheNewMarketArea,willbeofenormous
valuetotheTraders.Inthefirstplace,itprovidesfiveyearsofcertainty
regardingtheirmostsignificantbusinessexpense;thisisvaluableknowledgefor
anybusiness.Inthesecondplace,itprovidesacushionforanyTraderswho
experienceanydropinturnoverduetodisruptioncausedbytheMarket’s
relocationorthemovementoftheirunitwithintheMarket.Thirdly,this
commitmentprovidesreassurancethattheywill notbesubjectedtomuchhigher
rentstopayfortheirhugelyimprovedtradingconditions duringthosefirstfive
years.
4.104. Unsurprisingly,answerstothe2012BusinessSurveyofTradersinthe
Marketdemonstratedthataffordablelicencefeeswereamajorconcern.Question
14 asked“Doyouhaveanyadditionalcommentsontheproposedmeasuresfor
permanentrelocationofthemarket?”andanswersincluded:
i. “Puttheplacenicer,moreclassy,butkeepingtherentsaffordable”;
ii. “Wecouldkeepourbusinesskeeps[sic]havingthesamespace,andkeep
thesamerent”;
iii. “Keepsamerent”;
iv. “…Itlooksthatitwillbeforupperclasspeoplewhowillbeabletoafford
itandnoforfor[sic]theworkingclasspeoplethatworkshere[sic]and
haveasenseofcommunityhelpingeachother”;
v. “Betterconditions,andaffordable”;
vi. “Affordability.”
4.105. Question15asked“Whatadditionalmeasures,ifany,doyoufeelwillbe
necessarysothatyourbusinesscancontinuetooperateinthelongerterm?”and
answersincluded:
i. “…allowthebusuness[sic]tomaintainthesameprices,sosameclients
canaffordit”;
ii. “Wewanttogetguarantyofsamesizesofshopsandsamerentrate”;
iii. “Affordableandgoodlocation”;
40
iv. “[Worriedit]willbemoreexpensive”.
4.106. TheTraderscanthereforenowbesecureintheknowledgethattheywill
notbedeliberatelypricedoutoftheNewMarketAreainordertomakewayfora
differentkindofmarket.ThisshouldgoalongwaytocalmingTraders’fearsand
allowthemtofocusontheuniqueandexcitingopportunitiesfortheirbusinesses.
4.107. The offerofathreemonthlicencefee-freeperiod intheTemporaryMarket,
alongwiththebusinessassistancetobeprovidedbytheMarketFacilitator, isa
verygoodoffer.Asdescribedbelow,therelocationoftheCoventGardenFlower
Marketincludedanidenticalrent-freeperiod.Easingthefinancialpressureson
tradersbysuspendingrentforashortperiodhaspreviouslybeenfound tobeof
greatassistancewhensettlingtradersintoanewtemporarylocation.Similarly,a
30%reductionfor18monthsonaknownandachievablerentisafairreduction
fora reasonableperiodtoallowtraderstore-establishthemselvesinanew
permanentlocation.
4.108. Althoughthere is nofigurethatcouldguarantee theTemporaryMarket’sor
NewMarketArea’ssuccess,fixingtheLicenceFees tothese figures isthesafest
reasonableoption.
4.109. Ascanbeseenfromthese calculations,thehighestincreasewillbeborneby
cateringTradersof33.55%overfiveyears,oranaverageof6.71%p.a.Istress
thatthisappliestocaterersonly;runningacateringbusinessinamarketisa
proventradewhichthereforeoftenattractsapremiumin rentandIamconfident
thatthisgroupwillbeabletomanageanincreaseinfeesonthisscale.Further,in
myview,itisalsomorethanlikelythatthey– andthefour othergroupsof
Traderswiththeirsmallerincreases– will beabletocopewiththeselicencefees
because:
i. Theseincreaseswillbestructuredoveraperiodofaroundfiveyears–
assumingatleasttwoandahalfyearsintheTemporaryMarketwhilst
theNewMarketAreaisbuilt– withthreemonthsfee-freeandan18
months30%discount.TherewillthereforebetimeforTraderstoadjust.
ii. TheTemporaryMarketandtheNewMarketAreawillbothbeopenfor
tradingonSunday, addinganother52profitabletradingdaysperyear.
iii. Theimprovementsinbuiltenvironment,signage,visibility,advertising
andbusinessassistancefromtheMarketFacilitator,inboththe
TemporaryMarketandtheNewMarketArea,areverylikelytoattract
newcustomersandincreasetradelevels andtheTraders’profits.
41
iv. Tradershavealreadyweathered asignificantriseof52.25%for
“internal”units(andIassumethat“front”units’licencefeeshavealso
risen)between2008and2015,withnoneoftheanticipatedbenefitsof
theGraingerscheme.Inaddition,therehavebeennolicencefee
increasessinceatleast2015:Traderscannot realisticallyexpectto
remainatthesamelicencefeesindefinitely.
v. ThesepredeterminedLicenceFeesareverymuchinlinewithfees
chargedinotherLondonmarkets(assetoutintheTableabove).
4.110. AsIhavementioned,noTradershaveprovidedfiguresforturnoveror
profitlevels (theyarenotobligedto).Nevertheless,Iamasconfidentasitis
possibletobethattheTraderswillnotbepricedoutoftheNewMarketAreaand
thatasmanyaswanttocontinuetradingintheTemporaryMarketandtheNew
MarketAreawillbeabletoaffordit.
4.111. Afterthefirst30monthsintheNewMarketArea,theMarketOperatorwill
setthelicencefeesforallTraders.AsImentionedabove,determiningwhatthose
feesshouldbewillhavebeenmadeeasierbythepassageoftime: twoandahalf
yearsintotheNewMarketArea’soperationwillhavegivenittimetoestablishits
own marketvalue.Traderscomeandgoinanymarketthroughanaturalprocess
of“churn”, asthishappenstheMarketOperatorwillgainexperienceofwhatrents
itispossibletochargeforunitsintheNewMarketArea.Again,itisvitalto
rememberthatitisintheMarketOperator’s intereststoonlychargewhat
Traderscanaffordtopay.
4.112. AsInotedabove,Traders shouldalsobecomfortedby Grainger’sobligation
tosetlicencefeesconsistentwiththeCouncil'spolicyobjectivetoattractand
promotelocalindependenttraders,whichextendsbeyondthe LicenceFeeperiod
offiveyearsandprovidespermanentprotection.
4.113. Inmyview,thissetofLicenceFeecommitmentsfortheperiodfromthe
TemporaryMarketrelocationuntil longafterthemovetotheNewMarketAreais
apowerfulandverywelcomereassurancetoTradersthatthisrelocationprocess
haseverychanceofensuringafull,thrivingandsuccessfulNewMarketArea.
vii) FeesforNewTradersinTemporaryMarketorNewMarketArea
4.114. IntermsofanynewincomingtraderwhotakesalicenceforaTemporary
Marketunitafteritbeginsoperating,theywillhavetheirlicencefeessetbythe
MarketOperatorafternegotiationsinthenormalway.Therecanonlybeonerent
riseperyearforanyTemporaryMarkettrader,irrespectiveofwhentheybegan
tradingfromtheTemporaryMarket(para2.9,Sch.3,DDV).AsIhavediscussed,
anyprofessionaloperatorwillnotchargemorethanthemarketcantolerate;itis
42
betteruseofresourcestoinvestinthecurrenttradersinanymarket,ratherthan
repeatedlyseekingnewtraders.Havingtheoperatorsetnewtraders’licencefees
thereforedoesnotposeanyrisktothesuccessoftheTemporaryMarket.Inany
event,itwouldnotbereasonableforGraingertolimitlicencefeeschargeableby
theMarketOperatorfornewtradersarrivingafterrelocation;thisisa
commercialmatterfornegotiationwiththetrader.Limitingtheoperatortoone
rentriseperyearisinlinewithmyexperiencesofothermarkets.
4.115. OntherelocationtotheNewMarketArea,thoseLicenceFeesandthe30%
reductionwillapplytoall“QualifyingTemporaryMarketTraders”(thosewho
havebeentradingfromtheTemporaryMarketforthethreemonthsbeforethe
NewMarketAreaSchemeissubmitted;see“QualifyingTemporaryMarket
Trader”,Sch.2,p.9 DDVanddiscussedbelow).Graingerhasadiscretiontomake
anynon-QualifyingTemporaryMarketTraderanidenticalofferforafixed
LicenceFeeand30%discount(para7.10, Sch.3,DDV)butthereisno
requirementtodoso.
4.116. AswiththeTemporaryMarket,anynewincomingtraderwhotakesaNew
MarketArealicenceafterthefinalrelocationwillhavetheirlicencefeessetbythe
MarketOperatoraftertheusualprocessofnegotiationandonlyhaveonerent
riseperyear(para. 7.7, Sch.3,DDV).TheMarketOperatorwillthereforebein
controlofthelicencefees,saveforGrainger’sobligationtoensurethatNew
MarketArealicencefeesareatalevel“consistentwiththeCouncil'spolicy
objectivetoattractandpromotelocalindependenttraders”(see“NewMarket
AreaScheme”,Sch.2,p.9, DDV).
4.117. TheCouncilandGraingerthereforeretainoversightofthefeeschargedby
theOperator, evenafterthefirst30monthsintheNewMarketArea,whilstthe
specificfeelevelsarefortheOperatorhimself.Thisis entirelyreasonableinmy
view,inprotectingthecurrentandanyincomingTraderswhilstnotsettingthe
exactlicencefeeschargeablebytheOperatortonewtraders.
43
SECTION5:Grainger’sObligationsunderthes.106AgreementandDraftDeed
ofVariation
5.1. InthissectionIconsiderthe undertakings givenbyGraingerinthes.106
agreementwiththeCouncil(“thes.106”)andintheDraftDeedofVariation
(“DDV”).ThepurposeofthissectionoftheProof istoassesswhetherthe
undertakingsaresufficienttoprovideallreasonableassurancesthatasmany
Tradersaspossible fromthecurrentMarketwillsuccessfullynavigatethetwo
transitions:first,fromtheMarkettotheTemporaryMarket and,second,fromthe
TemporaryMarkettoathrivingandbuoyantNewMarketArea.
5.2. Insummary,inmyexperiencethelevelsofsupportprovidedbyGraingertothe
TradersinrelocatingtotheNewMarketAreaareunprecedentedintheir
thoroughnessandcommitmenttodeliveringtheNewMarketArea.
5.3. Iwillexaminethefollowingissues:
i) TheObligationtoProvidethe NewMarketArea
ii) TheMarketFacilitator
iii) TheNeedforaTemporaryMarket
iv) TheLocationoftheTemporaryMarket
v) TheTotalSizeoftheTemporaryMarket
vi) ClosingtheCurrentMarket
vii) TheOffertorelocatetotheTemporaryMarket
a. TheDefinitionofa“QualifyingTrader”
b. TheTraders’PeriodforConsideringtheOffer
c. TheReleaseSum
d. TheContentoftheRelocationOffer
viii) AdvertisingtheTemporaryMarketandtheNewMarketArea
ix) TheSizeoftheNewMarketArea
x) TheLayoutoftheNewMarketArea
xi) The NewMarketArea Scheme
a. TheDefinitionofa“QualifyingTemporaryMarketTrader”
b. ThePeriodforConsideringtheOffer
c. Traderswhodonotrelocate
d. TheNewMarketAreaOffer
xii) ClosingtheTemporaryMarket
xiii) OtherMatters
i) TheObligationtoProvidetheNewMarket Area
5.4. GraingerhascommittedtoprovidingaNewMarketAreaasanintegralpartofthe
DevelopmentwhichhasbeengivenplanningpermissionbytheCouncil.The
“NewMarketArea”isdefinedintheDDV as“thatpartofthegroundfloorofthe
44
Developmentintendingtocompriseanetinternalareaofat leasteighthundred
andsixtyfivesquaremetres(865 sqm)andtobesuitableforlocalindependent
tradersbyway ofareplacementoftheMarket”(Sch.2,p.8,DDV).
5.5. BelowIsetoutthe twosituationsinwhichGrainger’sobligationtoprovidethe
NewMarketAreacouldfallawayunderthepresents.106andDDV.Inmyview,
neitherislikelytoeverarise andtheTradersaresuitablyprotectediftheydo
arise,asIwillnowexplain.
5.6. Thefirstsituation,underwhichGraingermightnotbeobligedtoprovidetheNew
MarketAreaisthatthe“MarketCondition”mustbefulfilled; otherwisethereisno
“requirementtoenterintotheMarketLeaseorprovidetheNewMarketArea”
(para.3.3(a), Sch.3, DDV).
5.7. FulfillingtheMarketConditionmeansthat“nolater than12monthsbefore
PracticalCompletion”oftheDevelopment,Graingermustreceiveanofferfroma
“MarketOperator” toenterintothe“MarketLease”toruntheNewMarketArea
(orabindingandunconditionalagreementtoenterit)(Sch.2 p.8, DDV).
5.8. UndertheDDV,Graingercommitstousing“ReasonableEndeavourstoappoint
theMarketOperator”(para.3.2,Sch.3;“ReasonableEndeavours”,Sch.2,p.9
DDV).“MarketOperator”is“anexperiencedindoormarketoperatorableto
demonstrateasufficienttrackrecordinthesuccessfulmanagementofindoor
marketsand whoisapprovedby theDeveloper”(Sch.2,p.8, DDV).“Market
Lease”isdefinedasa“LeaseoftheNewMarketAreatobeenteredintobetween
theDeveloperand theMarketOperator” (Sch.2,p.8, DDV),incorporatingthe
HeadsofTermsinSchedule8 andwithregardtoGrainger’sobligationsunderthe
DDV.TheseHeadsofTermsspecify thattheOperatorwouldberesponsiblefor
thecostoffittingout:theNewMarketAreawouldbeprovidedto“shell
condition”.
5.9. OnceGraingerhasreceivedsuchanofferfromaMarketOperator,fulfillingthe
MarketCondition,Graingermustthenuse“reasonableendeavours” toenterinto
theMarketLease(para.3.3,Sch.3,DDV).
5.10. Thesecondsituation, whenGrainger’sobligationtoprovidetheNewMarketArea
mightfallawayisif,despiteanofferfromaMarketOperator, thereisneithera
signedMarketLease noranagreementtoenterinto it bysixmonthsbefore
PracticalCompletion.Again,inthissituation,Graingerisnotrequiredtoprovide
theNewMarketAreaorenterintoaMarketLease(para.3.3(b),Sch.3,DDV).
5.11. ThereisnorequirementtoappointtheMarketOperatororagreetoenterintothe
MarketLeasebeforetheTemporaryMarketisopened.
5.12. AstheMarketisfullyoccupiedatpresentandtheTemporaryMarketwillopen
45
fullylet,oratleastclosetofullylet, Iamconfidentthattheimprovedpremises,
businesssupportandmarketingwillimprovetradingconditions.Thiswillresult
inabuoyantTemporaryMarket andanattractivepropositionforanoperator
consideringwhether toenterintoanagreementfortheNewMarketArea.
5.13. Inmyview,itisveryunlikely thatGraingerwouldnotreceiveanofferfroma
suitableMarketOperatortooperatethenewMarketArea.Grainger’s
commitmenttouse“reasonableendeavours”toappointaMarketOperatorisa
usefulandhelpfulobligation.ThisshouldgivecomforttoTradersthatGrainger’s
commitmenttoasuccessfulNewMarketAreaissincereandthatthe
arrangementsformanagingthisstageofidentifyinganewMarketOperatorare
reasonableandsufficient.ThereisthereforeonlyaverylowriskthattheMarket
Conditionwouldnotbefulfilled.
5.14. Similarly,thereisonlyaverylowriskthatthesecondsituationwouldoccur– that
GraingerwouldfailtoenterintoaMarketLeasewithaMarketOperatorbysix
monthsbeforePracticalCompletion.
5.15. ThesuccessoftheTemporaryMarketwillbeafactorinhoweagerornota
MarketOperatorwouldbetosignaleasefortheNewMarketArea.Ifthe
TemporaryMarkethasbeentradingwellandisatcapacity plusawaitinglist,
thenaMarketOperatorismorelikelytobekeentotakeonaleasefortheNew
MarketArea,withtheprospectofafullandvibrantmarket.IftheTemporary
MarketwastradingparticularlybadlythentheprospectoftheNewMarketArea
mightbecomelessattractiveand theremaybedifficultiesinidentifyinga
companywillingtosign theNewMarketArealease.However,given thecurrent
fulloccupationoftheMarket pluswaitinglist,thelevelsofsupportforTradersin
theDDVandthecompetitiveTemporaryMarketLicenceFeessetbyGrainger,
thereiseveryreasontothinkthatthe TemporaryMarketwillbeasuccess.
5.16. Inmyview,GraingerwillnothavedifficultyinappointingaMarketOperator:the
proposedHeadsofTermsforthecontractwiththe MarketOperator(Sch.8,
s.106)arereasonableandanyrealisticoperatorwouldfindthemattractive.
5.17. IaminstructedthatitisverylikelythatMAMSSL,thecurrentoperator,iswilling
tocontinueactingasMarketOperatorfortheNewMarketArea.MAMSSLhas
writtenGraingeraletterexpressingitsinterestinconcludingtheMarketLease
andIaminstructedthatnegotiationsarealreadywellunderway(seeletter
appendedtoMrKiddle’sProof).Itisthereforehighlylikelythat theMarket
Operator fortheNewMarketAreahasalreadybeenidentified.
5.18. Inanyevent,if theTraderseverbecameconcernedthattheMarketConditionor
theMarketLeasewillnotbefulfilledandthattheNewMarketAreaisinjeopardy,
theTraderscould nominateacompanytobetheMarketOperator.TheDDV
46
providesthattheMarketOperatorcouldbe“nominatedbyanyotherorganisation
orindividual”(see “MarketCondition”,Sch.2,p.8,DDV).Thisshouldprovide
comfortthatTraderscantakesteps topreventtheMarketfrombeing
permanentlyclosedbecauseGraingercouldnotagreeaMarketLease.
5.19. Finally,InotethattheobligationonGraingertoprovidetheTemporaryMarketis
separate totheneedtofindaMarketOperatorfortheleaseoftheNewMarket
Area.EvenifGraingercannotfindaMarketOperatorfortheNewMarketArea,
GraingerstillhastoprovidetheTemporaryMarketinthemeantime,sothe
Traders’immediatefutureissecured.
5.20. Inmyview,theobligationsprovidedbyGraingerinthes.106andDDV are
sufficientandreasonabletoprotecttheTraders’interestsandgivereasonable
assurancethatthisstageoftheprocesswillsucceed.Traderscanthereforebe
confidentthattheirinterestsareprotected.
ii) TheMarketFacilitator
5.21. HereIexamine theroleof“MarketFacilitator”assetoutinparagraph2.1,Sch.3
oftheDDVandhowitislikelytoassistwiththerelocationprocessfortheMarket.
Ifurtheraddressfacetsoftherole belowastheybecomerelevant.
5.22. The“MarketFacilitator”isdefined as“Quarterbridgeof2WestStockwellStreet”
(Sch.2,p.8,DDV).QuarterbridgeLtd isasistercompanytoMAMSSL(thecurrent
marketoperator)andtheMarketFacilitatorwillbethesameindividual asthe
marketoperator.IaminstructedthatGraingerwillmeetQuarterbridge’sfees
incurredinperformingtheseDDVobligations(suchasadvertisingtheMarket).I
amsatisfiedthattheseobligationswillbecarriedoutandtoanappropriate
standard. Idonotanticipatethatanyissueswillariseasaresultofthesame
individualbeingboththeMarketOperatorandtheMarketFacilitator;Ibelieve
that theattentionrequiredbytheFacilitatorrolewillbedelivered.Therewas
alwaysgoingtobesignificantoverlapbetweenthe two roles;itmaybebeneficial
thatthesameindividualperformsbothroles,asthe Facilitatorcould guarantee
thedelivery,asOperator, ofanynegotiations(suchasfitoutrequirements).
5.23. TheMarketFacilitatorhasaspecificobligationto“promotetheinterestsofnon-
EnglishspeakingtradersintheTemporaryMarketandtheNewMarketArea”.
TheMarketcurrentlyhasabilingualmanagerwhospeaksbothSpanishand
English;thisisessentialfor ensuringclearlinesofcommunicationbetweennon-
EnglishspeakingTraders andtheoperatorduringtherelocations.Information
abouttherelocationsneedstobeeffectivelycommunicatedandtherewillbe
issuesrequiringnegotiationandcompromise.Goodcommunicationwillbevital
tomaintaininggoodandeffectiverelationshipsandeasingtensionsduringa
periodofchange.
47
5.24. ThemostimportantroleoftheMarketFacilitator,apartfromensuringthese
communicationchannels,willbefindingamethodofharnessingthestrengthof
theethnicatmosphereandappealoftheseTradersasawhole andtappingeven
furtherintothepoolofcurrentand potentialcustomersattractedbythesocial,
culturalandcommercialpackageofferedbytheMarket.
5.25. Therearemarketswhichmakeafeatureoutoftheirethnicorcultural
background butIhavenotbeenabletoidentifyanyindoormarketswhichmake
similaruseoftheirbackgroundasamarketingdevice.Thereareindoormarkets
whicharepre-dominantlymadeupofoneethnicgrouporanother– forexample,
WoodGreenhasahighproportionofethnically Asiantraders.Thisisnot
followedthrough,however,intermsofmarketingthisgroup oftradersasan
“AsianMarket”withauniquesellingproposition(“USP”)linkedtoAsianculture.
5.26. Therearethewell-knownexamplesofoutdoorandtravellingFrench,Italianand
Germanmarketswhichdoexploittheirethnicintegrity aspartoftheirUSP
throughavarietyofmethods.Examplesincludecommonthemesacrossthe
marketstalls(suchastheGermanic-style,ski-resort-likehutsoftheseasonal
GermanChristmasmarketontheSouthBank),orintherangeofproductson
offer,orthetraders’backgrounds(likethefarmers’marketswhere mosttraders
aresellingtheirownfreshproduce).Tradersinthesekindsofmarketshave
identifiedtheirgroup’sUSP andtakenstepstoenhancethispotentialto
differentiatethemselvesfromothermarketsandincreasetheirattractivenessand
interesttocustomers.Advertisingreflectsthisaspectofthemarket’sidentityand
tradersarerecruitedandencouragedtoremainwithaneyetobolsteringand
improvingthemarket’sculturalsellingpoint.
5.27. ThereisanopportunityfortheSevenSisters Markettoapplytheseprinciples
fromthesemarketsandharnessitsethnicintegritytoitsownadvantage,soasto
increaseits appealbothtomembersoftheLatin-Americancommunityandmore
broadly.TheroleoftheMarketFacilitatorshouldbeusedtoexplorethis
opportunitywiththeTraders.
5.28. Aspartoftheobligationto“provideappropriate businesssupportandadviceto”
TradersandothersworkingintheMarket,IwouldexpecttheMarketFacilitator
toworkwitheachindividualTraderinordertomakesuretheyunderstandhow
topreparefortherelocation.Inparticular,theMarketFacilitatorneedsto
addresshowtheindividualcanmovehisorherbusinesssoastokeepclosuretoa
minimum.Thisisofparticularsignificanceascashflowisextremelyimportantto
Tradersandmustbemaintainedandprotectedasfaraspossible.Iwouldexpect
theMarketFacilitatortomakesureeachTraderhasanindividually-tailored
movingplan;manyofthefactorswillbegenerictoallbutsome(suchasthecafés)
willrequiremuchmoredetail.
48
5.29. Anypro-active,professionalmarketoperatorwillprovidebusinesssupportto
newtraders (asrequiredbypara.2.1(b),Sch.3,DDV)andtheMarketFacilitator’s
previousundertakingsandexperiencewillprovidethetemplatesforthiskindof
support.IwouldexpecttheMarketFacilitatortocontinueandbuildonany
previoussuccessfulinitiativesthattheyhaveusedtosupportnewtraders
enteringtheirmarkets.
5.30. Itisgoodpracticeforfacilitatorsandmarketoperatorstouseresourcestobuild
relationshipswithexistingtraderswithaviewtokeepingthem,ratherthan
constantlyseektoreplacetraders.Vacantstalls inamarketcreateariskof
stagnationordecline.Fillingvoidsastheyarise becomescrucialfortheoverall
well-beingofthemarketandallpartiesinvolved,inwhichcasesupportinganew
traderbenefitsallparties.
5.31. TheobligationontheMarketFacilitatortoassistlocalindependenttraders
interestedintradingfromavacantstallin either theTemporaryMarketorNew
MarketAreaisthereforesensible.ItstandstobenefitthecurrentTraders,inthat
theMarketwouldremainfullandmaintainmomentum,tothebenefitofall.
5.32. Inmyview,theobligationstoappointandprocurethattheMarketFacilitator
providestheadviceandsupportsetoutabovearesensible and appropriate.The
overallobjectiveoftheMarketFacilitatoris“maximisingthenumberofTraders
andotherindependentlocaltraderswhoelecttotradefromtheTemporary
MarketandtheNewMarketArea.”Iamsatisfiedthatthecurrentobligationsin
theDDV,theMarketFacilitatorroleandtheindividualappointedwillassist
considerablywithachievingthatobjective.
iii) The Needfora TemporaryMarket
5.33. TheTemporaryMarketistobetheinterimlocationfortheMarketwhilsttheNew
MarketAreaisbeingconstructed,avoidingtheneedtoshuttheMarketduringthe
constructionoftheNewMarketArea.
5.34. IntheDDVtheTemporaryMarketisdefinedas
“atemporarymarket(havinganetinternalareaofnolessthaneighthundred and sixty five squaremetres (865 sqm)) to be provided inpart of the ground floor of the property known as Apex House asshownondrawingnumber160176-3DR-CO-00-DR-TN-0001P01asisattached to thisDeedor, in thecaseofaForceMajeureEventwhichpreventsoccupationofApexHouseasatemporarymarket,suchotherlocationwithintheCouncil'sadministrativeareaasmaybeagreedinwritingbetweentheDeveloperandtheCouncil.”(Sch.2,p.10)
5.35. 865 sqmequatesto9,310squarefeet(“sqft”).
5.36. TheDDVrequiresGrainger“nottopermanentlyclosetheMarket(aspartofthe
49
Development)unlessanduntiltheTemporaryMarkethasbeenPractically
Completedandisreadyforoccupation” (para.2.2, Sch.3).
5.37. ProvidingaTemporaryMarketfromwhichtheTraderscanoperateduring the
NewMarketArea’sconstructionisabsolutelycrucialtothegoalofmaintaining
theMarketinitscurrentform.Ifnoprovisionweremadeforatemporarymarket
andtheintentionwassimplythattheMarketwouldshutduringany
refurbishmentperiodandre-openafterwards,theMarketsimplywouldnot
surviveinitscurrentformandyoumightaswellbestartingagainfromscratch.
5.38. Thereisnowaythat smallindependenttradersofthiskindcouldtreadwater
withoutan incomestreamduring anysignificantperiodofclosurebefore
returningtoare-openedmarket.EvenifsomeTradersweredetermined tohold
onandwaitfortheMarkettoreopen,itisalmostcertainthatmanywouldnotbe
ableto.Inreality,Traderswouldveryprobablymakethedecisiontorelocateand
thegroupwoulddispersetoothermarkets.Itwouldthenbevirtuallyimpossible
toreassembletheoriginalgroupoftraders,especiallyiftheirrelocationwas
provingsuccessful.Itwouldbevirtuallyguaranteedthatthepresentcommunity
wouldhavebeenlost duringtheconstructionorrefurbishmentperiod.AsI
statedabove,IdonotfeelthattheWCC’sAlternativeSchemehasaddressedthese
importantmattersatallconvincingly.
5.39. Traderswhorespondedtothe 2012 BusinessSurvey raisedthesameconcern.
Question13asked“whatadditionalmeasures,ifany,doyoufeelareneededso
thatyourbusinesscancontinuetooperateduringreconstruction?” Answers
stressedtheneedforatemporarylocationwithsimilartransportlinksduringany
redevelopmentorrefurbishment:
i. “Berelocatedtosomewherewecancarryonthebusinessinthemeantime”;
ii. “Realocate [sic] ittosomewhereelseinthemeantime”;
iii. “Transitorylocationclosetocurrentlocation”;
iv. “Relocatewithinthelocalareawithhighlevelofcommutingaswehave
here…”.
5.40. Traders also expressedthespecificconcernthat,withoutatemporarylocation,
theMarketwouldnotbeabletore-establishitselfafteraperiodofclosure:
i. “…Duringreconstructiontheclosureofbusinesswillmakecustomersgo
somewhereelse.Itisnotguaranteedthatclientswillcomebackwhennew
developmentisready”;
ii. “Stay[ing] closedduringallthattimewillbehighlynegativeforthe
business”.
50
5.41. ItwasalsosuggestedthatTraderswouldbeunabletosupportthemselvesifthere
wasnotradingduringtherefurbishmentperiod:
i. “…Ifreconstructionwouldhappen,inthemeantime,to compensatewe
wouldneed2 millionGBP todividebetweenallofusandhaveamonthly
rentforthetwoyears,whiletheworkshappen.”
ii. “Minimum2million betweenalltradersforsupportovertwoyears- 62
unitstobedividedbetween.Tooexpensiveoutsidewiththecompensation
proposed.Wanttokeepthecommunitytogether…”
5.42. Grainger’sobligationtoprovideaTemporaryMarketis thereforeinvaluable to
ensuringthecontinuityoftheMarketwhilsttheNewMarketAreaisunder
construction;itshouldproviderealcomforttotheTraders.
iv) TheLocation oftheTemporaryMarket
5.43. GraingerhasacceptedmyadvicethatApexHouseshouldbedesignated as the
locationoftheTemporaryMarket.InotethattheDDVreferstotheTemporary
Marketbeingin“partofthegroundfloorofthepropertyknownasApexHouseor,
inthecaseofaForceMajeureEvent…suchotherlocationwithintheCouncil’s
administrativeareaasmaybeagreed”(Sch.2,p. 10).ApexHouseisimmediately
acrosstheroadfromthecurrentMarket.InotefromMrKiddle’sProof thatthe
demolition worksatApexHousehavealreadybegunandthatconstructionis
expectedtocompleteinearly2020.
5.44. TheimmediateproximityofApexHouse totheMarket’scurrentandfuture
permanenthome isabsolutelycrucialtomysupportfortherelocationscheme as
itprovidescontinuityfortheMarketintheclosestpossiblelocation.
5.45. AsIexplainfurtherbelow,inadditionto thelocationofApexHouse,theMarket
willbenefitenormouslyfrombeinginApexHouseasanewlyfitted-outmarket
hallwithallthebenefitsofincreasedcirculationspace,morenaturallight,new
andcleanfittings,improvedandsaferservices,moreattractiveandvisible
entrances,betteradvertisingandsignageandsoon.Thesebenefitsofbeingina
brandnewhallmustbestressedasitismyopinionthat– evenwiththeMarket
movingacrosstheroad– theycreateafantasticopportunity fortheTradersto
increasetheircustomerbaseandprofits.
5.46. ApexHouseisacrosstheroadfromthepresentsite:itisthereforenotdirectly
abovetheundergroundstation andsomecustomersmayneedtocrosstheroad
toreachit.However, anydisadvantagesarefaroutweighedbythebenefittothe
Traders’businesscontinuity fromitsproximity.Ihavealreadydiscussedabove
thattheMarketdoesnottakeadvantageofitslocationabovetheunderground
anyway;thiswillchangeintheNewMarketArea.
51
5.47. I aminstructedthatApexHousehasbeendiscussedastheTemporaryMarketsite
atmeetingsoftheMarket’sSteeringGroup(discussedinMrKiddle’sevidence).A
letterinMarch2017 fromSteeringGroupmemberMsM.C.HinestrozadelaOssa
confirmedthat “100%oftradershadbeenconsulted”andthoughtthatthiswould
beasuitablelocationfortheTemporaryMarket(appendedtoMrKiddle’sProof).
5.48. IfirmlybelievethattheApexHouse/NewMarketAreaproposalfromGrainger
offerstheTraderstheirbestchanceofcontinuingtheMarketasclosetoits
presentformaspossiblewhilstalsodramaticallyimprovingtheirconditions.AsI
havediscussedabove,thesituationoftheMarketinitscurrentlocationandstate
isuntenableduetotheconditionofthe buildingandthebelow-marketrates
chargedbylandlordandmarketoperator.EvenwithoutGrainger’sproposal,
somethinginthatequationwouldhavetochangesoon,attheTraders’expense
andwithouttheextensiveprotectionsofferedbyGrainger.
5.49. Ishouldnotethattheoriginals.106agreementwassilentontheTemporary
Market’slocation.IwasinstructedthatApexHousewastheintendedlocation
andIadvisedthatitwasessentialtogiveassolidaguaranteeaspossiblethatthe
TemporaryMarketwouldbeinApexHouse,givenitsimportance.Myadvicewas
acceptedandtheDDV now guarantees thattheTemporaryMarketwillbeinApex
House,barringforcemajeureevents,inwhichcaseitwillbein“suchother
locationwithintheCouncil’sadministrative area”asisagreedinwriting(Sch.2,
p.10, DDV).Thisisasignificantimprovementtothecurrents.106.
v) TheTotalSize oftheTemporaryMarket
5.50. Grainger’sobligationsinthes.106andthe DDVareclearlydesignedtoensure
thatthecommunityofcurrentTraderssurvives.TheobligationsonGrainger
ensurethat,essentially,allofthosecurrentlytradingintheMarketandstill
tradingattherelocationstageareguaranteedastallintheTemporaryMarket.
ThesizeoftheTemporaryMarketisthereforeclearlycrucial:theremustbe
enoughspacetoaccommodateallexistingTradersandGraingercannotassume
thatanyTraderwoulddecidenottorelocate.
5.51. Withinanymarket,therentablespaceforstallsisalwayssignificantlylessthan
thetotalgrossavailablespace.Thisistoallowspace forcustomerstomove
betweenstalls,forfireexits,publictoiletsandamanagementoffice,amongother
matters.Oldermarkethallstendtousemoreroomfortraders’stallsbutmodern
bestpracticeistoincreasetheamountoffreespace.Asageneralruleofthumb
fornewlyfittedoutornewlybuiltmarkethalls,55%ofthetotalavailableareais
usedfortraders’stallsandtheremaining45%isrequiredforcirculationand
safetypurposes.Improvingthecustomerexperienceisonereasonforthis
(crampedspacesandcorridorsbetweenstallsareunwelcomingtocasual
customers)andhealthandsafetyrequirementsareanotherreason(intheevent
52
ofafire,forinstance,itmustbepossibletoeasilyleavethebuilding).Iwould
expecttheseroughproportionstoapplytotheTemporaryMarketandtheNew
MarketArea,asnewlyfitted-outorrefurbishedmarket halls.
5.52. IaminstructedthatthecurrentMarkethasagrossinternalareaof9,730sqft:
6,200 sqftisusedfor stalls and408sqftisusedforservices.70%ofthetotalarea
isthereforeusedforstalls andservices and30%forcirculation.Thisiscommon
foroldermarketsbutinconsequence,however,theMarketisbesetbyproblems
which havedevelopedovertheyears:inparticularthegangwaysbetweenstalls
arenarrowandcramped andtherearenocommunalareas.
5.53. IaminstructedthattheTemporaryMarketwillhaveatotalgrossinternalarea of
12,472sqftandatotalnetinternalarea of7,740sqft.TheTemporaryMarket will
thereforehavemoretradingspacethanthecurrentMarketandtherewillbe
morespaceoverall,inlinewithbestpracticeanda55:45division.Thecurrent
draftfloorplansfortheTemporaryMarketshowingZonesAandBforLicence
FeepurposesareatAppendix 5.
5.54. ThedrawingsshowthattheTemporaryMarketbacksontoalockablecourtyard
ofaround1,000sqft.IaminstructedthatGraingerownsthis spaceandit willbe
availabletouseaspartoftheTemporaryMarketasseating,communalspaceand
othersimilaruses.Theadditionof1,000sqftofoutsidecommunalspaceisa
fantasticopportunityforthevibrantcommunitylifeoftheMarkettoflourish.
5.55. AtalaterstageitwillbenecessarytoagreeafloorplanshowingtheTraders’
relocationintotheirindividualstalls,services,communalspacesandsoon.Itis
notpossibletoallocatetheexactlocationsofindividualstallsatthisstage,not
leastbecauseitisnot reasonabletoexpectTraderstocommittorelocation now.
5.56. Graingermust consulteachTradermovingintotheTemporaryMarket“aboutthe
proposedlocationofhisunitwithintheTemporaryMarketandtohaveregardto
anyreasonable representationsandviewsthatarereceived” (para.2.4,Sch.3,
DDV).Thisconsultationmusthappen atleasttwomonthsbeforethe“Temporary
MarketOfferDate”,thedeadlineforTraderstoaccepttherelocationOffer.
5.57. ItisreasonableandappropriateforGraingerandtheOperatortoconsultwiththe
Tradersandconsidertheirspecificneedsfortheirbusinessandideasabout
wheretheywanttobeintheTemporaryMarket.However,itisvitalthat
GraingerandtheOperatorretainthefinaldecisionoverhowthebusinesseswill
belocatedacrosstheTemporaryMarket,tobeabletomakethebestdecisionsfor
theMarketasawhole.Thetimingofthisconsultationisalsoappropriate:no
laterthantwomonthsbeforetheTemporaryMarketOfferDate.TheTraderswill
beabletogivetheirviewsabouttheirstalllocationbeforetheymaketheir
decisionontheofferandwillhaveanideaofwhattheTemporaryMarketwill
53
looklike.GraingerandtheMarketOperatorwillthenhavetwomonthstomake
thefinaldecisionontheTraders’locationswithinthemarket, allowingthemto
makefinalplansforarapidandefficientrelocation.
5.58. Ofcourse,thefinedetailsofthiswillneedconsiderationattheselaterstages.
TherewillalsobeavitalongoingrolefortheMarketFacilitatortoplayinthis
process,aspartofproviding“appropriatebusinesssupportandadvice”to
Traders(para.2.1,Sch.3,DDVandsee below).
5.59. Asaverygeneralobservation,thereisaprecedentforthegroupingtogetherof
hotfoodtradersandoutlets.A “foodcourt” styleareawithsharedseatingworks
wellandwillencouragethecommunityaspectofthemarket.Thismayalso
doubleasacommunalspaceforentertainmentandevents,whichwouldalso
contributetothecommunityatmosphereofthemarket.
5.60. Theinternallayoutwill,ofcourse,berequiredtocomplywithrelevantbuilding
regulationsandhealthandsafetyregulations.Thiswillaffectthesizeofpublic
walkways,fireescapes,drainage,ventilationandtheconstructionofmezzanines.
5.61. ClearlytherewillneedtobedetailedplansworkedoutfortheTemporaryMarket
stallsandtheirindividualfittingout.Inmyview,atthisstage itisnotnecessary
forGraingertoprovideadditionalobligationsintermsofthefinaldesignofthe
TemporaryMarketoritslayoutintheformal legalagreement;theTraders’
interestsaresufficientlyprotectedbytheformal obligations.
vi) ClosingtheCurrentMarket
5.62. GraingermaynotclosetheMarketunlessanduntiltheTemporaryMarkethas
beenprovidedandisreadyforoccupation(para.2.2,Sch.3,DDV).Graingermust
servea“ClosureNotice”ontheCouncilandallTradersoperatingstallsinthe
Marketatleastsix monthsbeforetheCommencementofthe Development (para.
1.1,Sch.3, DDV;seealsop.2s.106).
5.63. TheClosureNoticemustincludethe“ClosureDate” forclosingtheMarket,which
canbenolessthansix monthsafterthedateoftheserviceoftheClosureNotice
(Sch.2, p.6,DDV).Itmustalsostate,asatthedateoftheClosureNotice:
i) thenameoftheoccupierofeachunit;
ii) therateablevalueofeachunit;
iii) thesizeofeachlicensedunit;and
iv) theTemporaryMarketOfferDate.
5.64. TherequirementthattheTemporaryMarketmustbereadytooccupybeforethe
MarketmaybeclosedprotectstheTraders’interests,itprovidesreassurance
54
that,whenevertheClosureNoticemightbeservedandwhatevertheClosureDate
mightbe,theMarketcannotbecloseduntiltheTemporaryMarket isready.The
Traderscanthereforebeconfidentthat theMarketwillnotbeallowedtosuffera
prolongedperiodofclosurebetweenthecurrentMarketclosingandthe
TemporaryMarketbeingreadyforoccupation.Althoughitisinevitablethatthere
willbeashortperiodforphysicallyrelocatingthestalls,duringwhichtheMarket
willnotoperate,thisobligationensuresthatthisisnolongerthannecessary.
5.65. TherequirementthattheClosureNoticegivesTradersaminimumofsixmonths’
noticebeforetheMarketisshutisanappropriatelengthoftimeto keepTraders
informed,toallowthemtoconsidertheirpositionandmakearrangements.
5.66. Theinclusionofeachstall’ssize,occupierandrateablevalueintheClosureNotice
isalsoasensibleprovision.Identifyingtherateablevalueforeachstallmeans
thateachTraderknowswhathisorherindividualReleaseSumwouldbe,inthe
eventthatheorshedeclinesrelocation.
5.67. Settingoutthelicensedsizeofeachstallgivesthe upperlimitto thestallsizethat
anyTradermightexpecttorentintheTemporaryMarketandtheNewMarket
Area.Thisinformationisalsousefulinasecondway:IaminformedbyMAMSSL
andfrommyownvisitstotheMarket thatthereareanumberofstallstrading
fromalargerareathan permittedunderthetermsoftheirlicence.Forexample,
someTradershaveconstructedunauthorisedmezzaninesorareusingcorridor
spacefortheircateringbusinesses.MAMSSL isworkingtoaddresstheseissues
nowandtoensureTradersunderstandthattheyonlypayforuseofadefined
areaandthattheymayonlytradewithinthatarea.Itisprudenttobeginthis
now;todelaywouldstoreupproblemsforwhenrelocationapproaches,an
alreadystressfulperiod.
5.68. ItisveryimportantthatTradersunderstandtheactualsizeoftheirlicensedunit
andwhattheycanthereforereasonablyexpecttobeallocatedintheTemporary
MarketorNewMarketArea.
vii) TheOffer toRelocate totheTemporaryMarket
5.69. Iwillnowexaminetheissuesraisedbythe“Offer”thatGraingerisobligedto
providetoevery“QualifyingTrader”intheMarketatthedateoftheClosure
Notice.FirstIdealwiththedefinitionofa“QualifyingTrader”,thenthedefined
periodforacceptingorrejectingtheOffer.Thirdly,Ilook atthe“ReleaseSum”
payableshouldaTraderdecidenottoaccepttheOffertorelocate.Finally,Ilook
atthefour aspectsoftheOfferdefinedintheDDV.
a. TheDefinitionofa“QualifyingTrader”
5.70. LookingfirstatwhowillreceiveanOffertorelocate:underparagraph24.4,Sch.4
55
ofthes.106,Graingerwilloffer“eachTrader”astallintheTemporaryMarket.
“Traders” aredefinedasthoseindividualslistedinSchedule7asoccupyingstalls
inJuly2012.TherehavebeenasignificantnumberofchangesintheMarketover
thepastfiveyears:ofthe38Traderslistedinthes.106only14werestill in the
MarketinFebruary2017.Theconfiguration ofstallsandbusinesseshasalso
undergonesomechanges.Moststallshavethereforehadatleastonechangein
occupation andSchedule7ofthes.106isthereforenolongeraccurate.
5.71. TheDDV statesthata“QualifyingTrader”isa“Traderwho:a)isoperatingastall
attheMarketasatthedateoftheClosureNotice;andb)hasbeenoperatinga
stallattheMarketwithoutinterruptionforaperiodofthree monthsimmediately
precedingthedateoftheClosureNotice”(Sch.2,p.9,DDV).
5.72. Graingeralsohasthediscretiontooffernon-QualifyingTradersaspaceinthe
TemporaryMarketonthesametermsasQualifyingTraders(para2.7,Sch.3,
DDV)although thisonlybecomesrelevantifthereisroomintheTemporary
MarketafterallQualifyingTraders havebeenaccommodated (giventheexpress
obligationtoofferall “QualifyingTraders” astall).
5.73. IhaveexaminedtheDDVobligationstoensurethatGrainger isrequiredto
provideanalternativesiteforallofthoseTraderswhogivetheMarketthe
composition,communityandcohesionwhichitenjoystoday andwhichare so
highlyvaluedbyTradersandtheircustomers.Iamsatisfiedthatthepreservation
of the currentbalanceofbusinesses,andthecommunitycreatedby thatbalance,
isthepurposeof Grainger’s“Offer”offreerelocation,astallofthesamesize(orat
least90%)oftheTrader’scurrentstallandathreemonthlicence-feefreeperiod.
5.74. Itisthereforereasonable torequirea Tradertohavebeentradingfromthe
MarketforthreemonthsbeforetheClosureNotice,inordertobenefitfromthe
generousOfferpackage.A minimumtermofthreemonthsintheMarketwould
ensurethattheTraderwasapartofthelifeofthecurrentMarketandintendedto
continuetradingandcontributingintheMarket’stemporary home.
5.75. Imposinga longerqualifyingperiodbeforeaTradercouldreceiveanOffer offree
relocationmightdiscouragenewtradersfromtakingavacantstallinthecurrent
Market,shouldanyarise beforerelocation.Traderswhowereconsidering
whethertotakealeaseinthecurrentMarketbeforetherelocationwouldbe
awarethattherewould beamoveintheimmediatefutureandthattheywould
riskbearingsomeoralloftherelocationcoststhemselves.Thiswouldcreate
significantriskanduncertaintyforlocalindependenttraderswhootherwise
mightbewillingtorentunitswhichbecomevacantbetweenthedateofthe
InquiryandtheClosureNotice.
5.76. Thisuncertaintycouldput theviabilityoftheTemporaryMarketatriskbefore
56
relocation eventookplace: it wouldincreasethepossibilityofvacantstalls atthe
timeofthemove.Vacantstallsalwayscarryarisktoamarket andparticularlyon
relocation.Asmentionedabove,thesuccessoftheTemporaryMarketmayalso
haveanimpactonmarketoperatorcompanies’willingnesstotakeontheMarket
LeaseoftheNewMarketArea.ItisthereforeintheinterestoftheTraders,the
MarketOperatorandGraingertohaveafullandthrivingMarketatthetimeofthe
movetotheTemporaryMarket.Further,as thedesireistoprotectandencourage
localindependenttraders,therewouldbenoreasontoexposethemtotheriskof
payingforrelocation;thiscouldonlyleadtovoidspacesintheTemporary
Market.ItisthereforeofrealbenefittothesurvivaloftheMarketthatthe
qualifyingperiodisasshortas threemonths.
5.77. Inmyview,therefore,itisreasonablethataQualifyingTrader needonlyhave
beentradinginthecurrentMarketforthreemonths beforethedateofthe
ClosureNotice inordertoreceiveanOffer,inlinewith myrecommendedperiod
foracceptingtheOffer assetoutbelow.
b. TheTraders’PeriodforConsideringtheOffer
5.78. InowexaminetheperiodoftimefortheTraderstoconsidertheOffer.
5.79. TheDDV isasignificantimprovementonthepreviouspositionunderthes.106
fromallparties’perspective:theTradersare nowguaranteedtoreceivetheOffer
atleastsixmonthsbeforetheMarketisclosed.TheTraders’deadlinefor
accepting theOfferisthreemonthsbeforetheClosureDate.Theguaranteed
minimumperiodforconsideringtheOffer isthereforethree months.
5.80. Graingermustgive QualifyingTraderstheOfferwiththeClosureNotice(para. 2.3,
Sch.3,DDV).This Noticemustbeservedatleastsixmonthsbeforethe“Closure
Date”,whentheMarketmustbeclosedandtheTemporaryMarketreadyto
occupy(paras1.1and2.2, Sch.3and“ClosureDate”,Sch.2,p.6,DDV).Traders
willthereforebemade theOfferatleastsixmonthsbeforetheClosureDate.
5.81. Theperiodforconsidering the Offerrunsfromwhenit is serveduntilthe
“TemporaryMarketOfferDate”,threemonthsbeforetheClosureDate (see
“TemporaryMarketOfferDate” p.10and“ClosureNotice”p.6,Sch.2,DDV).So,if
theClosureNoticeisservedtheminimumofsixmonthsbeforetheClosureDate
andtheTemporaryMarketOfferDateisthreemonthsbeforetheClosureDate,
theminimumfortheQualifyingTraderstoconsidertheOffer willbethree
months.TheNoticecouldbeservedmore thansixmonthsbeforetheClosure
Date, inwhichcasetheperiodforconsiderationwouldbe longer.
5.82. CalculatingtheTemporaryMarketOfferDatebackwardsfromtheClosureDateis
asensibleandreasonablemechanism.ItprovidesenoughtimefortheTradersto
maketheirdecisionanditprovidesGraingerandtheMarketOperatorwiththe
57
certaintyofknowingwhichTradersneedrelocatingtotheTemporaryMarket.
5.83. DealingfirstwiththeneedsoftheTraders:ifthe ClosureNoticeisserved atleast
sixmonthsbeforetheClosureDate,therewillcertainlybefloorplansandvisuals
oftheTemporaryMarketavailable(asit wouldhavetobenearingcompletion,to
bereadybytheClosureDate).It mightnotbefinishedenough,however, for
Traderstobeabletopicturethemselvestrading init,particularlyifGrainger
served theClosureNoticemore thansixmonthsbeforetheClosureDate.
5.84. Byproviding thattheTraders’decisionperiodrunsuntilthreemonthsbeforethe
ClosureDate,theDDV providesreasonableassurancesthattheTemporary
MarketwillbeinasufficientlycompletedstateforTraderstoviewitbefore
makingtheirdecision.Thethree months alsoprovide areasonableperiodfor
Traders totakeadvicefromtheMarketFacilitatororanyothersource.Theywill
alsohavetimetoconsidermatterssuchas theirstockdeliveries,relocationissues
andtheirbusinesscaseformoving.
5.85. Inmyview,theDDV provides sufficientguarantees thatTraderswill beableto
makeaninformeddecisiononwhethertoaccepttheOfferortaketheRelease
Sum.
5.86. The needs oftheTraderstoviewtheTemporaryMarket mustbebalanced with
those ofGraingerandtheMarketOperatortoplantherelocationandtoletvacant
stallsifTraderschoosenottorelocate.Imposingatimelimitforacceptingthe
Offerwillallow GraingerandtheMarketOperatortoplaneffectivelythe
relocationforallremainingTradersandtofillanyvacantstallswithnew
applicantstokeeptheTemporaryMarketthrivingandbuoyant.
5.87. Further,Inoteagainthatthelevelofassistancebeingofferedinrelocatinggives
theTradersaveryhighchanceofnotonlysurvivingbutalsoimprovingtheir
tradingconditions.Giventhis, itisentirelyreasonablefortheTraderstohavea
timeframefordecidingwhethertoaccepttheReleaseSumortheassistanceto
relocatebeingoffered,inorderthattheMarketOperatorandGrainger cantakeall
necessarystepstoprotecttheinterestsoftheMarketasa whole.
5.88. InmyviewthearrangementsforclosingtheMarketaresuitableandprovideall
reasonableassurancestotheTradersthatthisstageoftheprocesswillcompleted
assmoothlyaspossible.
c. TheReleaseSum
5.89. IftheTradersdecidenottorelocatetotheTemporaryMarket,theywillbepaid
theReleaseSum,whichistherateablevalueoftheTraders’unitsatthedateof
theClosureNotice(see“ClosureNotice”p.6 and“ReleaseSum” p.10,Sch.2,DDV).
UndertheDDV Graingermust paytheReleaseSumwithin28 daysofthe
58
QualifyingTradersigningtheReleasedocument(para2.6(a), Sch.3,DDV).
TradersthereforehaveoneopportunitytoaccepttheReleaseSum,atthemoment
ofdecidingwhetherornottorelocatetotheTemporaryMarket.Thereisno
equivalentReleaseSumforaTemporaryMarketTraderwhodoesnotrelocate
againtotheNewMarketArea.
5.90. Iamnotawareof anyexamplesofclosingorrelocatingmarketsinwhichasimilar
releasefeewas offered,especiallyasanalternativetoarelocationpackage.Inmy
experience,ifatraderdecidesnottorelocatewithamarket,theysimplygiveup
theirleaseorlicenceandleave themarket;thereisnocompensationpayable.It
isunusualtohavetherelocationoptionsthattheTradershavewithGrainger.
5.91. Further,at presenttheTraders’licences canbeterminatedbyeitherpartyon
veryshortnotice– themarketoperatormustgiveoneweek’snoticeandTraders
mustgivefour weeks– andnocompensationwouldbepayablewhatsoever.The
obligationtopaytheReleaseSumtoTraderswhodecidenottorelocatetothe
TemporaryMarketandwhoarerelinquishingtheirlicences is thereforegenerous.
5.92. TraderswhoelectnottorelocatealsoreceiveassistancefromtheMarket
Facilitator,whowill“assistindividualsworkingattheMarkettofindsuitable
alternativeemployment”iftheydecidenottomovetotheTemporaryMarket
(para.2.1(f), Sch.3, DDV). This offerofassistancewill beofgreatbenefitto
departingTraders.AnexperiencedFacilitatorwillhavecontactswithinthe
industryandwillbeabletoadviseonopportunitieswhichwillsuittheindividual
Trader.Itisunusualinmyexperiencetofindsuchassistancebeingofferedwhen
suchaviablerelocationplanisinexistence.
5.93. Overalltherefore,Iamsatisfiedthatthese obligationsprovidedbyGrainger
provideallreasonableassurancesthatasmany Tradersaspossiblewillelectto
movetotheTemporaryMarketandwillbeabletotransitionsuccessfully.
d. TheContentoftheRelocationOffer
5.94. WithregardtotheOfferitself,underparagraph24.4,Sch.4ofthes.106,Grainger
mustoffereach“Trader”“astallintheTemporaryMarket”with“athreemonth
rent-freeperiodintheTemporaryMarket.”Thisobligationissignificantly
expandedundertheDDV:Graingermustmakeeach“QualifyingTrader”an
“Offer” (para.2.3,Sch.3),whichmust include:
(a) freerelocation(includingallreasonableremovalcostsandexpenses
butexcludinganydangerousorunlawfulorunauthorised
equipment)fromtheMarkettotheTemporaryMarket;
(b) aLicenceofaunitintheTemporaryMarket,whichshall:(i)havethe
benefitofallServices;(ii)benolessthanninetypercent(90%)of
59
thesizeoftheQualifyingTrader'sunitintheMarket;(iii)beofan
appropriatelayouthavingregardtotheQualifyingTrader'sunitin
theMarket;
(c) athree(3)monthlicencefee-freeperiodinrelationtohisunitintheTemporary Market commencing on the date when the QualifyingTrader'sunitintheTemporaryMarketisfirstopenedtothepublic;and
(d) theLicenceFeeforsolongastheTemporaryMarketisinoperation.”(see“Offer”,Sch. 2,p.9 DDV)
5.95. Inowconsiderthe“freerelocation”obligationandtheunitsizeandservices/
facilitiesintheTemporaryMarket.Ihaveconsidered LicenceFeesinSection4.
i. FreeRelocation totheTemporary
5.96. Underthecurrents.106Graingerwas to providethetotalrateablevalueofthe
Marketasa“TradersFinancialAssistanceSum”(p.4,s.106,“TFAS”),whichwasto
bepaidtotheCouncilandthendistributedamongtheTraders.Forthosewho
wishtorelocate,itwastobea“contribution”tothemovingcosts(para24.3,Sch.
4,s.106).
5.97. Inmyview,theDDV now providesabetterandmoresecuredealfromthe
Traders’perspectiveby replacing theTFASandsimplyoffering“freerelocation
(includingallreasonableremovalcostsandexpensesbutexcludingany
dangerousorunlawfulorunauthorisedequipment)fromtheMarkettothe
TemporaryMarket”.ThisisagreatopportunitytosmooththetransitiontoApex
HousefortheTraders.IfanindividualTraderdecidesnottorelocate,heorshe
willbepaidtherateablevalueoftheir stall asa“ReleaseSum”(Sch.2,p.10 DDV).
5.98. FromtheTraders’perspective,the DDV isasignificantimprovementintwo
respectsonthes.106:
a) Thes.106providesthatfinancialassistancefromGrainger“is
providedbywayofacontributiontowardsthecostsincurredbythe
Tradersinrelocating”(para24.3,Sch.4,emphasisadded).TheDDV
guaranteesa“freerelocation(includingallreasonableremovalcosts
andexpenses…” (“Offer”,Sch.2,p.9);
b) Thes.106providesthatthebudgetforthe relocationwastobe
drawnfromtheTFAS,whichwas “theaggregaterateablevalueofthe
Market”(p.5s.106).TheDDV nolongerlinkstherelocationbudget
totherateablevalueoftheMarket.Thisissensibleinmyview,as
thereisnologicallinkbetweena stall’srateablevalueandthe
probablecostinrelocatingit totheTemporaryMarket.
60
5.99. Inmyview,itispreferablethattheprocessofmovingshouldbeadministeredand
paidfordirectlyby Grainger,asprovidedintheDDV,ratherthantheCouncil
distributingsmallindividualsumstoeachTrader asintheoriginals.106.A
centrallyrunprocessprovidesgreaterassurancetoallpartiesthatallofthe
Traders’equipmentandstockwillbemovedsafelyandthateveryTraderwillbe
installedinascloseto theircurrentpositionasreasonablypossible.Further,
engagingaprofessionalmovingcompanytomovetheTradershasattendant
subsidiarybenefits,suchasinsuranceshouldanything bedamagedinthemove.
5.100. Atalaterstagetherewillneedtobedetailedplansforthepreciseprocessof
movingtheTraders: thepackingprocess; thesequenceinwhichTradersmove
across; thedateofthemove(includingdatestoavoid);asuitablereopeningdate
(ideallytocoincidewithanappropriatefestivalor holidaytoenhancethe
reopeningevent)andsoon.This willensurethesmoothestmovepossibleandto
minimisethetimewhentradingwouldbesuspended.Theactualprocessof
movingstockandequipmentwill requireacarefulinventoryofthestalls’
contents andtheuseofacentralcontractortodeliverit totheTemporaryMarket.
5.101. IamtoldthatGraingerhavecontacted removalscompanyJ.A.Steel&Sonto
obtain aquoteandtodiscusstheremovalprocessfromtheMarkettoApexHouse
indetail.IattachatAppendix 7 aletter fromthecompanysettingoutits
experience,qualifications,detailsoftheir visittothesiteandkeyfactorsfor
consideration.Ihavespokenwithacompanyrepresentativeandamsatisfied
thatthe companyhasextensiveexperienceofcommercialmoves.Inparticular,
theyareaware oftheneedforarapid,resource-intensivemove;thisisimportant
giventheTraders’ needtoreopenquickly tomaintainbusinesscontinuity.Iam
satisfiedthatJ.A.Steel&Sonare suitabletocarryout therelocationprocess.
5.102. IaminstructedthatGraingercontinuestosetasidetherateablevalueofthe
Market(theformers.106TFAS)asarelocationbudget, around£201,000 (seeMr
Fourt’sProof).Iamalsoinstructedthatthe Mayorhaspledged£284,000towards
thecostsoftemporaryrelocation (seedecisionappendedtoMsJohnson’s Proof).
Thisprovides arelocationbudgetof£485,000. FurtherIaminstructedthat
Graingerhascommittedtopaythefullcostsshouldthey exceedthisbudget
(subjecttoSch.2,p.9,DDV: “excludinganydangerous… equipment”).
5.103. J.A.Steel&Sonhasestimated£1,000- £1,500tomoveeachstall.Assuming
£1,500perstallacross60individualunits isatotalof£90,000.Evenifthis
budgetweretobeexceededby100%,itisclearthatthefundsallocatedwillbe
enoughandleaveplentytosparefortheNewMarketArearelocationand
advertisingcosts.
5.104. InMarch2017IwasinvolvedintheCoventGardenFlowerMarket:thiscost
around£100,000 tomove38traders using50,000sqftoftradingspaceand
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significantlymoreequipmentthantheSevenSistersMarket.Weusedeight7.5
tonnevehiclesandapproximately40staff.ThemovecommencedonSaturday
lunchtimeandallequipmentwasinplacefortheunitstobeopenfortradingon
Sundayevening.Thiskindofspeedisessentialforensuringbusinesscontinuity.
5.105. IamthereforeconfidentthatthekindofmoverequiredbytheTradersisfeasible
andalsothatthebudgetof£485,000andtheproposedmovingcompanyare
suitablefortheTemporaryMarketandtheNewMarketArea relocations.
5.106. TheDDVstatesthatGraingerwillpayallreasonableremovalcosts“excludingany
dangerousorunlawfulorunauthorisedequipment”.Thislimitationisentirely
reasonableinmyview.
5.107. Frommy visitsto theMarket,itseems verylikelythatatleastsomeoftheTraders
haveoldoroutdatedequipment,andtheremaywellbeissueswithotherTraders’
apparatuswhichIdidnotidentify.Itseemsverylikelythatsome equipmentwill
beoutofdateornon-compliantwithhealthandsafetyregulations bythetimeof
therelocation.Some Traderswouldthereforehavetoinvestinequipmentinthe
shorttomediumterm anyway.Itwould beunreasonabletoexpectGraingeror
theMarketOperatortobear,asostensiblerelocationcosts,businessdevelopment
costsofTraderswhichwouldhavebeenincurredinanyeventoverthenextfew
years.Further,itwouldnotbeappropriateforGraingertoassistTradersin
continuingtouseequipmentwhichmightbeunsafeornon-compliantwithhealth
andsafetyregulations.
5.108. ItisindividualTraders’ responsibilitytohaveappropriatetestsconductedon
theirequipmentandobtainallappropriatecertificates(suchasPATtestsfor
electricalitemsorcertificatesforgascookers).BeforetherelocationIwould
expecttheMarketOperatortoremindTradersofthis.Iwouldalsoexpectthe
MarketOperatortodoafullauditofallequipmentbeforetherelocationand
identifyequipmentthatwillnotbemovedonsafetygrounds.Itremainsthe
Traders’responsibilitytogettheappropriatechecksdone.
5.109. Grainger’sexclusionofpayingmovingcostsfor“anydangerousorunlawfulor
unauthorisedequipment”isthereforeappropriateandreasonable.
5.110. InotefromMrKiddle’sProof thatGraingerhascreateda“Community
EngagementStrategy” (CD4/35).ThisCommunityEngagementStrategyhasled
tothecreationofthe MarketSteeringGroup,discussedabove.Meetingsare
attendedbyTraders,GraingerandMAMSSLtodiscusstheMarket’sfuture,daily
maintenanceandmanagementissues.TheStrategyalsoencourages meetings
betweenGraingerandindividualTradersto discusstheneedsofspecific
businesses inbeginningtoplanfortheTemporaryMarket relocation.AllTraders
havebeeninvitedtoanindividualmeeting:therehavebeen28meetingssofar
62
and Iaminstructedthat Graingercontinuestotrytoarrangethesemeetingswith
theremainingTraders.Thisisagoodbeginningtowhatwillneedtobeadetailed
andongoingprocess.
5.111. ItshouldalsoberememberedthatsomeTradersmay ceasetrading betweenthe
dateoftheInquiryandtheClosureNoticeorthatTradersmaychoosenotto
relocate.ItisthereforenotreasonableatthisstagetoexpectGraingerandthe
TraderstodiscussinprecisedetailwhattheTraders’movingneedsare,when
theymightnotberelocatingatall.
5.112. Givenallthis,thecurrentprovisionfor“freerelocation(includingallreasonable
removalcostsandexpenses butexcludinganydangerousorunlawfulor
unauthorisedequipment)”isappropriatelydetailedand doesnotneedto beany
morespecific atthisstage.
5.113. IamsatisfiedthattheformalobligationsprovidedbyGraingeraresufficientto
provideallreasonableassurances thattherelocation totheTemporaryMarket
willbesuccessful.TherelocationpackageofferedbyGraingeriscomprehensive
andinlinewithmyrecentexperienceoftheFlowerMarketmove.
ii. UnitSizeandFacilities intheTemporaryMarket
5.114. ThesizeoftheTemporaryMarketasawholeisdiscussedabove;hereIaddress
theissueofthesizeofTraders’individualunits.
5.115. Thes.106agreementprovided thattheTraderswouldbeoffered“astallinthe
TemporaryMarket”:therewas noguaranteethatthestallwouldbethesameora
comparablesize.ThiswasinsufficienttoprotecttheTraders’needto securea
stallasclosein sizeaspossibletotheircurrentunit,so Iadvisedthat,asfaras
possible,individualunitsizesshouldbemaintainedacrossboththeTemporary
MarketandNewMarketArea.MyadviceresultedinthecurrentDDVobligations.
5.116. TheDDV isthereforeasignificantimprovement onthepreviousagreement;
Grainger must
“usereasonableendeavours toprovideeachAcceptedQualifyingTraderwithaunitintheTemporaryMarketwhichisnosmallerthantheAcceptedQualifyingTrader’slicensedunitintheMarketPROVIDEDTHATinanyeventeachAcceptedQualifyingTradershallbeprovidedwithaunitintheTemporaryMarketwhichisnolessthanninetypercent ofthesizeoftheAcceptedQualifyingTrader’slicensedunitintheMarket” (myemphasis,para.2.5,Sch.3)
5.117. The“Offer”definitionrepeatsthefall-back guarantee of90%:Graingermustoffer
eachQualifyingTrader aunit“whichshall...benolessthanninetypercent ofthe
sizeoftheQualifyingTrader’sunitintheMarket”(Sch.2,p.9,DDV).
63
5.118. Assetoutabove,theTemporaryMarketatApexHousewillhave12,472sqft
gross space,with7,740 sqftofavailabletradingspacerentabletoTraders (the
currentMarkethas6,200 sqft ofavailable tradingspace).Iamthereforesatisfied
thattherewillbesufficient netspacetoaccommodateallofthecurrentTraders.
5.119. AsdiscussedaboveinSection4,theTemporaryMarketwillnotbethesame
shapeasthecurrentMarket.Usingthelatestfloorplans fortheredevelopedApex
House(Appendix5),IcanconfirmthatallTraderscanbeaccommodatedinstalls
whichareatleastthe samesizeastheircurrentunits.Iconductedthisexercise
withoutconsideringwhichbusinesswouldgoinwhichunits,however,asthiswill
besubjecttoindividualdiscussionswithalloftheTraders.
5.120. GiventheshapeofApexHouse,itmay thereforebedifficulttoprovideevery
Traderwithexactlythesamefloorspace and layoutand positioninthe
Temporary Marketastheircurrentunit.Therewillneedtobeanelementof
compromiseandnegotiationoverthesizeandpositionofsomeTraders’units.In
myview,itisthereforeacceptabletoallowa10%degreeoftolerance overthe
sizeofeachTrader’sTemporaryMarketunit.
5.121. A10%degreeoftolerance willallow GraingerandtheMarketOperator,in
consultationwiththeTraders,tomakethebestpossibledecisionsonthe
positioningand layoutoftheTraders’units, intheinterestsoftheindividual
TradersandtheMarket asawhole.Grainger,ofcourse,remainsthroughout
underthe obligationtouse“reasonableendeavours”toprovideeachTraderwith
aTemporaryMarketunitwhich is“nosmaller”thantheircurrentunit.Thefall
backguaranteethataTemporaryMarketunitwillbenolessthan90%ofthe
relevantcurrentunit’s sizeprovidesadditional assurancethateveryTraderwill
berelocatedintoaunitofatleasta comparablesize withtheircurrentone.A
10%differenceina100sqftunitisunlikelytohavea significantimpactona
Trader’sabilitytoruntheirbusiness.Itshouldalsoberememberedthatthe
LicenceFeesarecalculatedpersqft:iftheTrader’sunitissmaller,theirLicence
Feewillbelower.
5.122. TheTraderscanthereforebeconfidentthatGrainger willnotpaymerelipservice
to“trying”toprovideTemporaryMarketstalls ofequalsizetotheircurrentunits
andwillnotbeableto“getawaywith”offeringmuchsmallerunits.Itisalso
necessarytobearinmindthattheTemporaryMarketisonlyatemporary
solutionandthattheNewMarketAreawillbeslightlylargerthantheMarket.
5.123. Thedefinitionof“Services”obligesGraingertoprovide“water,electricity,
telecommunications,decoration(painting),flooringand(asappropriate)gasand
drainage” (Sch.2,p.10, DDV).Thisobligationisentirelysufficientatthisstage
andcoversthestandardservicesthatIwouldexpecttoseeprovided.Iam
instructedthateachindividualstallwillhaveameansofsecuringit,probably
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rollershutters.SomeTraderswillalsorequire extraction (businessesincluding
foodpreparation,salonsandnailbars)andeithertilingorstainless steelontheir
walls forpreparingfood.These matters(suchasextraction andotherdetailed
business-specificmatters)willbetheresponsibilityoftheMarketOperatorand
willonlybecomeclearoncethedetailedplansaremadeforindividualunits.Itis
thereforereasonablethatsuchmattersarenotdetailedinthes.106orDDV.
5.124. Finally,Ishouldagainmentionthatsomeunitswillbeonamezzaninelevel(this
isthecaseinthecurrentMarket,althoughthisisnotpermittedundertheterms
ofthe Traders’agreements).AssetoutinSection4,therewillbesignificant
discountsonmezzanineunits tooffsetanylossoftrade andIexpecttheMarket
OperatorandFacilitatortoworkwiththeTraderstoidentifybusinesseswhich
relylessoncasualcustomersandarethereforelesslikelytoexperienceadecline
inturnoverthroughbeingonthemezzanine.Preciselocationsshouldtherefore
notbedealtwithinthes.106agreementbutitwouldbebestpracticetoadoptthe
approachsuggestedhere.Ofcourse,GraingerandtheOperatormakethefinal
decisiononTraders’locationsin theTemporaryMarket (para.2.4,Sch.3,DDV).
5.125. IamthereforesatisfiedthattheDDV providesallreasonableguaranteestothe
Tradersinrespectofindividualunits’sizeandfacilitiesintheTemporaryMarket.
Overall,Iamsatisfiedthattherelocation“Offer”provides appropriateassistance
totheTradersastheyrelocateto theTemporaryMarket.
viii) Advertising theTemporaryMarketandtheNewMarketArea
5.126. TheDDV providesatparagraph2.1thattheMarketFacilitator“workswith the
Tradersinorderto...
(e) advertisetheproposedrelocationfromtheMarkettotheTemporaryMarketandfromtheTemporaryMarkettotheNewMarketArea(asthe case may be) so as to raise awareness about the proposedlocationandopeningoftheTemporaryMarketandtheNewMarketArea,respectively;
(f) advertisetheTemporaryMarketandtheNewMarketAreaonceeachfacilityhasbeenopenedtothepublic”.
5.127. AsdiscussedinSection3,theMarketlackscoordinatedmarketing,hasverypoor
signageandiswellconcealedbehindunobtrusiveswingdoors.Italsolacksa
coordinatedonlineandsocialmediapresence.
5.128. Inmyviewthis wholeredevelopment isarealopportunityfortheTemporary
MarketandtheNew MarketArea,workingwiththeMarketFacilitator, toattract
significantlymorecustomersandtoencouragecasualvisitors.Effective
advertisingwillbeessentialinhelpingtocarrycustomersfromtheMarketacross
totheTemporaryMarketandthentotheNewMarketArea.Adeliberateand
65
sustainedadvertisingeffortbytheMarketFacilitatorinconcertwiththeTraders
thereforehasthepotentialtobeofsignificantbenefittotheMarketasawhole.
5.129. IwouldexpecttheMarketFacilitatortobeginaddressing thisissue earlyon,
especiallysocialmedia.Theuseofsocialmediaisalsoanissuethatshouldbe
includedinthebusinesssupportpackagedeliveredbytheFacilitator throughout
theMarket’stimeinitstemporaryhomeandintotheNewMarketArea.
5.130. Frommyownexperience,socialmediacanbeofgreatassistancetobothoutdoor
andindoormarkets.Forexample,Facebookpagescreatedandmanagedbymy
companyforourmarketshavebetween5 and10,000“likes”,withsomeposts
reachingover100,000people.EngagingwithsocialmediasiteslikeFacebook
enableustoadvertiseeffectivelyinformationlikedatesformarkets,newstalls,
specialevents,aswellasthebasictaskofkeepingcurrentcustomersengagedand
returningtothemarketand attractingnewclientele.OurNorthWealdMarket
Facebookpagehas8,000“likes”andisusedbytradersandcustomers
interactivelytopromotethemarket.Itisa much-emphasised policyofSaunders
MarketsLtdthatweengageactivelywithsocialmediaandwehavefoundit
highlyeffective.
5.131. Socialmediaadvertisingisanissuethatreallymustbedrivenbythemarket
managementteam;inmyexperienceindividualTradersrarelyhavethe
experienceortheimpetustoinitiateandsustainsuccessfulsocialmedia
campaigns.Itismosteffectivelydrivenatan“overallmarket”level,ratherthan
an“individualtrader”level.
5.132. DrivingforwardtheissueofadvertisingtheMarket– physicallyandonline–
makesobviouscommercialsenseandwouldbeinallparties’ interests.Itis
thereforesensiblethattheDDV specificallyallocatesresponsibilitytotheMarket
Facilitatorforthisimportantaspectoftheprocess.
5.133. Withoutwaivingprivilege,InoteherethatthepreviousdraftsoftheDDVdidnot
mentionadvertising.IadvisedthatIwouldexpectanidentifiedindividualtotake
responsibilityforadvertisingthe relocations;myadvicewasactedonin
specificallyincorporatingthisobligationintotheDDV.
ix) TheSizeoftheNewMarketArea
5.134. TheNewMarketAreaisdefinedintheDDV as:
“that part of the ground floor of the Development intending tocompriseanetinternalareaofatleasteighthundredandsixtyfivesquaremetres(865 sqm)andtobesuitable for local independenttradersbyway ofareplacementoftheMarket.” (Sch.2,p.8,DDV)
5.135. TheNewMarketArea(thegrosssizeofwhichcanbeincreasedto11,270sqft
66
(see theindicativelayoutappendedtoMrBeharrell’sproof) toprovide arentable
retailareaof6,200sqft and5,070sqft for circulationspace)wouldcomply with
themodernapproach discussedaboveof55%ofthetotalavailableareafor
Traders’stallsandtheremaining45%forcirculationandsafetypurposes.The
NewMarketAreawillthereforeprovideexactlythesameamountofspacefor
Traders’unitsandprovidethemuchneededadditionalspaceforcorridors,
servicesandhealthandsafety.
5.136. IamthereforeconfidentthatallofthosecurrentlytradingintheMarketcanbe
accommodated intheNewMarketArea.
x) TheLayoutoftheNewMarketArea
5.137. Underparagraph7.2,Sch.3 oftheDDV,Graingermust
“NolaterthantwomonthsbeforetheNewMarketOfferDate,consultwiththeTemporaryMarketTradersabouttheinternallayout oftheNew Market Area (including the proposed locations of theirindividual unitswithin theNewMarketArea) and... have regard toanyreasonablerepresentationsandviewsthatarereceived…”
5.138. AswiththeTemporaryMarket,itisappropriatetoincludearequirementto
consult theTemporaryMarketTradersonlayoutandtheirunits’location inthe
NewMarketArea,astheTraders’inputmaythrowuppossibilitiesthathadnot
beenidentifiedorthoughttobeviablebytheOperator.Aprofessionaloperator
wouldhaveopenlinesofcommunicationwithTraders onmatterssuchasthis
andIwouldexpectaprocessofrepeatedconsultationasthelayoutevolves.
5.139. ItislikelythatthemostcontentiousissuewillbewhichTradersobtainwhich
positionsintheNewMarketArea;atthispointtheoverallgoodofthemarket
tendstobecomesecondarytoeachindividual’sneeds.Inordertoensurethatthe
bestpossibledecisionsaremadefortheMarketasawhole,theMarketOperator
mustretainoverallcontrolofthelayoutprocess.Itisthereforeappropriate that
Grainger’sobligationisto“haveregardto”Traders’views.
5.140. AswithmyobservationsontheTemporaryMarket,itwillbenecessaryatalater
stagetoproduceafloorplanshowing theTraders’unitsintheirexactNew
MarketArealocations.IwouldexpectGraingerandtheMarketOperatorto
considerthisinmuchgreaterdetailatalaterstageand,aswiththeTemporary
Market,theroleoftheMarketFacilitatorwillbeessential inproviding
“appropriatebusinesssupportandadvice”totraders(para.2.1,Sch.3,DDV).I
alsowouldexpectthe“fitout”ofanynewmarket,aswiththeTemporaryMarket,
tobeaddressedindetailatamuchlaterstage.Theinternallayoutwill,ofcourse,
berequiredtocomplywithrelevantbuildingregulationsandhealthandsafety
regulations.Thiswillaffectthesizeofpublicwalkwaysbetweenthestalls,fire
67
escapes,drainage,ventilationandmezzaninelevelsaboveindividualstalls.
5.141. Inmyview,atthisstageitisnotnecessaryforGraingertoprovideadditional
obligationsintermsoftheNewMarketArea’sfinaldesignorfitout;theTraders’
interestsaresufficientlyprotected,particularlybytheobligationtoconsult.
xi) The NewMarketArea Scheme
5.142. InthissectionIconsidertheprovisionsregardingtheNewMarketAreaScheme,
whichisadocumenttobesubmittedbyGraingertotheCouncilwhichsetsoutthe
rateablevalueofeachTemporaryMarketstallandtheofferthatTemporary
MarketTraderswillreceivefortheirfinalunitsintheNewMarketArea.
5.143. Under paragraphs 7.4-5,Sch.3 oftheDDV,theNewMarketAreamaynotbe
occupieduntiltheNewMarketAreaSchemehasbeenapprovedbytheCouncil,
andtheNewMarketAreamustthenbeoperated inaccordancewiththeScheme.
5.144. Below,IcommentonaspectsoftheNewMarketAreaoffer.AstheseNewMarket
Areaobligationsareidenticalinmost respects tothosefor theTemporaryMarket,
myconclusionsarethesame.Iamsatisfiedthattheobligationsprovidedby
GraingerandtobeimposedontheOperatorwillbesufficienttoensurethatas
manyTradersaspossiblerelocatetoathrivingNewMarketArea.
a. TheDefinitionof aQualifyingTemporaryMarketTrader
5.145. AswiththeTemporaryMarket,theobligationtomakeanOfferforaLicenceofa
NewMarketAreaunitis limitedto“QualifyingTemporaryMarketTraders”,
althoughthereisadiscretion tomakeanequivalentoffertoanytraderwhodoes
notqualify.AQualifyingTemporaryMarketTraderisdefinedasaTrader
operatingintheTemporaryMarketforthreemonthsbeforethesubmissionofthe
NewMarketAreaScheme (Sch.2,p.9 DDV).
5.146. Therequirementthata“QualifyingTemporaryMarketTrader”hasbeen
operatingintheTemporaryMarketforthreemonthsbeforethesubmissionofthe
NewMarketAreaSchemeisreasonableandappropriateforthesamereasonsas
givenaboveforthedefinitionofthe“QualifyingTrader”.Allrelocationscarry
withthemanelementofrisk.Successwillbebestassured,however,byensuring
thattheTemporaryMarketisthrivingandbusyat thetimeoftherelocation,with
novacantstalls andtradersmakingprofitandabletopaythelicencefees.Ifthe
samefavourableofferisgiventoallTemporaryMarketTradersofthreemonths’
standingbeforetheNewMarketAreaScheme’ssubmission,thiswillprovide
certainty andencouragementtoanynewtradersconsideringwhethertotakea
unitintheTemporaryMarketinthemonthsleadinguptothe relocation.
5.147. Committing,inparticular,toprovideafreerelocationandalltheadvantagesof
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theMarketFacilitator’sexperiencewiththepreviousmove,willbeofgreat
assistanceinensuringthat,shouldanyTemporaryMarketunitsbecomevacant,
therewillbetraderstofillthem.TemporaryMarketTraderswhoreceivethe
assistanceofafreerelocationwillalsobeunderlessfinancialpressurewhenthe
NewMarketAreaopensandhavethereforeagreaterchanceinmakingasuccess
oftheNewMarket.
5.148. ItisthereforeimportanttomakethisoffertoasmanyTradersoperatingfromthe
TemporaryMarketaspossible– notjustthoseTraderswhomovedfromthe
Market– inordertoprotecttheinterestsoftheMarketasanentity.Itisvery
muchintheinterestofallparties– Traders,MarketOperatorandGrainger– that
thefinalmovetotheNewMarketArea isasuccess.
b. ThePeriodforconsideringtheOffer
5.149. TheperiodforconsideringtheofferissimilartothatfortheTemporaryMarket:a
minimumofthree months andpossiblylonger.
5.150. TheNewMarketAreaSchememustinclude the“NewMarketOfferDate”,whichis
“thedatebywhentheofferofaLicencemustbeaccepted(ordeclined)beingthe
datewhichisthree(3)monthsbeforethedatewhentheNewMarketAreais
projectedtoopentothepublic”(Sch.2,p.9,DDV).
5.151. ThereisnofixeddateformakingtheTraderstheirNewMarketAreaoffers.
However,GraingermustprovidetheTraderswithatleastsixmonths’noticeof
theNewMarket Area’s openingdateandtheTemporaryMarketclosure(para.
2.12,Sch.3,DDV).Graingermustalso“submittheNewMarketAreaSchemeto
theCouncilnolaterthansixmonthspriortotheprojectedopeningoftheNew
MarketAreatothepublic”(para.7.3,Sch.3,DDV).Graingerisalsoprohibited
fromoperatingtheNewMarketArea“otherwisethaninaccordancewiththe
approvedNewMarketAreaScheme”(para.7.5,Sch.3,DDV).
5.152. Althoughnotexpresslystated,itseemsclearthattheintentionistomirrorthe
obligationsfortheTemporaryMarketandprovidetheTraderswiththeirNew
MarketAreaOffersatleastsixmonthsbeforetheTemporaryMarketclosesand
theNewMarketAreaopens.Onthatbasis,Traderswillhavethreemonths for
considering theofferbeforetheNewMarketOfferDate.Iamthereforesatisfied
thatTraderswillhavesufficienttimetoconsidertheirNewMarketAreaoffers.
5.153. Thisarrangementis thereforeappropriate,forthesamereasonsaswiththe
TemporaryMarket.Insummary:
i) Tradersareprovidedwiththeofferdetailsingoodtime;
69
ii) Traderswillhaveaminimumofthreemonths forconsideringtheoffer,
bywhichpoint theNewMarketAreaislikelytobesufficiently advanced
thattheycanseetheirunitlocationandmakeaninformeddecision;
iii) Havingacut-offpointforacceptingtheofferassiststheMarket
Operator:hecanrecruitanyreplacementtraderstoensureafullMarket
onrelocationandalsoplanthelogistics foranefficientrelocation.
c. Traderswhodonotrelocate
5.154. ShouldaQualifyingTemporaryMarketTradernotwishtotakeastallonthese
terms,theMarketOperatorcanthenofferthatstall“tosuchotherpersonasit
shalldetermine” (para.7.9,Sch.3,DDV).Clearlythisissensibleinordertoensure
thattheMarketremainsatfullcapacityandcontinuestothrive.
5.155. IfaTraderdoesnotwishtotakeaNewMarketAreaunit,theMarketFacilitator
must“assistindividualsworkingattheMarkettofindsuitablealternative
employment”iftheydecidenottomovetotheTemporaryMarket and/orthe
NewMarketArea (para.2.1(f), Sch. 3,DDV).Asnotedabove,thiscommitment
couldbeofgreatbenefittoTraderswhochoosetoleavetheTemporaryMarket
beforetheNewMarketAreamove.
d. TheNewMarketAreaOffer:
5.156. TheNewMarketAreaSchememustinclude:
AnobligationtoofferQualifyingTemporaryMarketTraders:
(1) ALicenceofaunitintheNewMarketAreawhichshall:
(A) HavethebenefitofallServices;
(B) Be of an appropriate layout having regard to: i) the QualifyingTemporaryMarketTrader’slicensedunitintheMarketinthecaseofaQualifyingTemporaryMarketTraderwhohadaLicenceofaunit in the Market; or ii) the Qualifying Temporary MarketTrader’s licensed unit in the TemporaryMarket in the case of aQualifyingTemporaryMarketTraderwhohadaLicenceofaunitintheTemporaryMarketbutnottheMarket;
(C) Subject to (D) below, a licence feewhich equates to the LicenceFeeforthefirstthirtymonthsfromtheopeningoftheNewMarketArea;
(D) A licence fee which equates to a discount of thirty percent lessthantheLicenceFeefortheReducedLicenceFeePeriod.
(2) Freerelocation(includingallreasonableremovalcostsandexpensesbutexcludinganydangerousorunlawfulorunauthorised
70
equipment)fromtheTemporaryMarkettotheNewMarketArea.(Sch.2,p.8-9,DDV).
5.157. Further,theDDV providesthatGraingerwill
“provideeachAcceptedQualifyingTemporaryMarketTraderwithaunitintheNewMarketAreawhichisnosmallerthan:
(a) the Accepted Qualifying Temporary Market Trader's licensedunitintheMarketinthecaseofanAcceptedQualifyingTemporaryMarketTraderwhohad aLicenceofaunitintheMarket;and
(b) theAcceptedQualifyingTemporaryMarketTrader'slicensedunitintheTemporaryMarketinthecaseofanAcceptedQualifyingTemporaryMarketTraderwhohadaLicenceofaunitintheTemporaryMarketbutnottheMarket.”(para.7.8,Sch.3)
5.158. ThislargelymirrorstheOfferfortheTemporaryMarketandmyconclusionsare
thesame.
5.159. The“Services”obligationissufficientatthisstage;againanyremainingmatters
(suchasextraction andotherdetailedbusiness-specificmatters)willbethe
responsibilityoftheMarketOperatorandonlyariseoncethedetailedplansare
beingmadeforindividualunits.Itisthereforereasonablethatsuchmattersare
notdetailedinthes.106orDDV.
5.160. Intermsofsizeandlayout:GraingermustprovideeachAcceptedQualifying
TemporaryMarketTraderwithaunitnosmallerthantheirMarketunit(forthose
whohadaLicenceintheMarket),orthantheirTemporaryMarketunit(forthose
arrivingaftertheTemporaryMarketmove).Itis appropriatetoguaranteethat
theNewMarketAreawillprovideTraderswithatleastthesameamountof
tradingspaceasthecurrentMarket.
5.161. GraingeralsoprovidesacommitmentthateachQualifyingTemporaryMarket
Trader’sunitintheNewMarketAreawill“beofanappropriatelayout having
regard” totheTrader'slicensedMarketunit(iftheyhadone)orTemporary
Marketunit(iftheyarrivedaftertherelocation).Itwillbereallyhelpfulto
Tradersthatthelayoutoftheir NewMarketunitswillrelatetotheTraders’
originalunits,whichtheywillhavebeenabletocustomiseandadaptovertime.
Thisisnotsomethingoftenguaranteedduringrelocationsasitnecessitatesextra
effortanddiscussions;inmyviewthisobligationdemonstratesGrainger’sefforts
tomaketherelocationsassuccessfulforTradersaspossible.
5.162. Ofcourse,thedetailedplansandnegotiationsforeachindividualTraderarefarin
thefutureatthispoint.Atthisstage,theobligationisreasonableandsufficientto
protect theTraders’interests.
71
5.163. The “freerelocation”offer isidenticaltothatdiscussedabove (paras 5.96-113).
AswiththeTemporaryMarket,giventheunknownfactors,thecurrentobligation
hasanappropriatelevelofdetailand itisnotfeasibletobemorespecificatthis
stage.Asbefore,itisclearthatGraingerandtheOperatorareawareofthese
mattersandIamconfidentthattheywillbeaddressedattheappropriatetime.
5.164. Atthisstage,Iamsatisfiedthattheobligationsaresufficienttoprovideall
reasonableassurancethatthemovetotheNewMarketAreawillbesuccessfully
carriedout.Also,theOperatorandthemajorityoftheTemporaryMarket
TraderswillhaveexperiencedtherelocationtotheTemporaryMarket. Iwould
expectbothpartiestoapplytheexperiencelearnedthentothissecondmove.
5.165. IamthereforesatisfiedthatthecontentoftheOffersetoutinthe“NewMarket
AreaScheme” definitiongivessufficientandappropriatedetailatthisstageand
gives allreasonableprotectiontotheTraders’interests.Theseobligationsare
likelytocreateasituationinwhichTradersmakeasuccessfulreturntoathriving
NewMarketArea.
xii) ClosingtheTemporaryMarket
5.166. ThearrangementsforclosingtheTemporaryMarketmirrorthoseforclosingthe
currentMarket.GraingercannotclosetheTemporaryMarketuntiltheNew
MarketAreahasbeen“PracticallyCompletedandisreadyforoccupation” (para.
7.6,Sch.3,DDV).TheMarketFacilitatorisunderanobligationtoassist
TemporaryMarketTraderstokeeptradingforaslongastheTemporaryMarket
isopen(para.2.1(c), Sch.3,DDV).TheTradersarealsotobegivenatleastsix
months’noticeoftheTemporaryMarket’sclosure(para.2.12, Sch.3,DDV).These
obligations provideimportantreassurancethattheinevitableperiodofclosure
forphysicallyrelocatingthestallswillbe nolongerthannecessary.
5.167. Finally,“fromtheopeningoftheNewMarketArea tothepublic,”Graingermay
not“operatetheTemporaryMarket” (para7.12,Sch.3,DDV).This obligation
ensuresthatGraingerdoesnotdeveloptwomarketsatthesametime afterthe
relocationtotheNewMarketArea (oneintheNewMarketAreaandoneinApex
House).ThisprotectsthecurrentTradersfromGraingercreatingintenselocal
competitionbyallowingasecondmarkettodevelopinApexHouse.
xiii) OtherMatters
5.168. HereIaddressfour matterswhichareoutsidethescopeofthes.106agreement.
5.169. OpeningTimes:asdiscussedinSection3,IaminstructedthattheTemporary
MarketandNewMarketAreawillbeopenonSundays,makingtheMarketopen
sevendaysaweek.Theopportunitytotradeonanother52primedays is
valuable,however itshouldnotbecompulsorytotradesevendaysaweek,asthe
72
pressurecanbetoogreat.Smalltradersmustbeableshutonedayaweek.With
theindividuallylockableunits,Iamconfidentthatthiswillbepossibleinboththe
TemporaryMarketandNewMarketArea.
5.170. ResidentialImplications:Iaminstructedthattherearenorelevantrestrictions
inthe planningpermissionsforeitherApexHouseortheNewMarketAreawhich
might unduly restricttheTemporaryMarketorNewMarketArea’sopeninghours
ordeliverypatterns asaresultoftheflatsabove.
5.171. ServicingandDeliveryfacilities: Ihaveseendrawingsandplansforthe
servicinganddeliveryfacilitiesforbothApexHouseandtheNewMarketArea.
ApexHouseprovidesfourloadingbays:twowithintheserviceyardanda
minimumofoneeach(dependingonthesizeofvehicle)onSevenSistersRoad
andStonebridgeRoad.TheservicingoftheMarketwillrequireadetailedplan
butIamsatisfiedthatthefacilitiesareappropriatefortheMarket’sneeds.Three
ofthemarketssurveyedabove(paras4.49-61)haveless inthewayofservicing
spaceandallstillfunctionwell.TheNewMarketAreawillhavetwoloadingbays
inSuffieldRoad,directlyadjacenttooneoftheMarketentrances.Therewillalso
beasecureserviceroadthat Traderswillhaveaccess tofordeliveries:this
containsspacefortwo 11-metrelorriesandthreevans.Throughthecombination
ofthesefacilities IamsatisfiedthatthattheTraderswillbeabletoservicetheir
unitscomfortably withtheassistanceofadetailedservicingplan.
5.172. Parking: Iaminstructedthattherewillnotbeanyparkingavailablespecifically
fortheMarket,eitherTradersorcustomers.AlthoughtheMarketcurrentlyhas
limitedparkingfacilities,threeoutoffouroftheMarketssurveyeddonothave
anyatall(Section4).Inmyview,thisisaluxuryandnotaprerequisitefora
successfulmarket:loadingandservicingfacilitiesarefarmoreimportant,
particularlygiventhattheMarketenjoys suchexcellentpublictransportlinks.
73
SECTION5:Conclusions
5.173. Insummary,theobligationsinthes.106andtheDDV arecomprehensive,
generousandreasonable.Everystageandeveryaspectoftherelocationprocess,
theoccupationoftheTemporaryMarket,andtherelocationtotheNewMarket
Areahasbeencarefullyconsidered.Theobligationsrelatingtoeachstageare
necessaryanduseful.Therearenofurtherimprovementstobemadetothe
existingobligationsthatIcan identify,norcan Ithinkofanyadditional
precautionswhichwouldfurtherassistinensuringtheMarket’scontinued
successthroughoutthisprocess.
5.174. Lookingbeyondthelegalobligations,thisisauniqueopportunitytocreate
somethingexciting:anewandinvitingenvironment forthispopularMarket
whichwillensureitscontinuedandgreatersuccess.TheMarkethassufferedfor
decadesfromunderinvestmentandtheUSMReportconcludedthat“visually
thereisabiglackofsparkinthemarketwhiletheambienceisoftenthevery
opposite– itislivelywithmusicandactivityatmosttimes”(p.11).Thisscheme
presentsthechancetocreateaphysicalsettingworthyofthatatmosphere.
5.175. IcanpositivelyconfirmthatIbelievethattheDDVands.106presenttheTraders’
bestpossibleandlikelyopportunityforcreatingasecureandbrightfuturefor
theirMarket.
74
SECTION6:Considerationofthe2008“SevenSistersMarketReport”byUSM
6.1. TheNewDealforCommunitiescommissionedthe“SevenSistersMarketReport”
ontheMarket whichwascompiledbyUrbanSpaceManagementinMay2008
(CD11/6), towhichIhavereferredabove.ThisReport hasbeenrepeatedly
referredtointheMarketTraders’StatementofCase.Manyofitsassumptions
andconclusions wereappropriateinthecircumstancesof 2008.However,the
position in2017isdifferentinmanycrucialways:theReport’sconclusionson
futurerentlevelsandtheMarket’sviabilityarenolongerrelevant.
6.2. TheMarketdescribedbyUSMin2008is verysimilartotoday,asIhavenoted
throughoutthisProof:thesoreneedforinvestment;thepoorconditionofthe
building;thecomparativelylowrents;thevibrancyoftheatmosphere;the
Market’sinvisibilityfromthestreetandsoon.
6.3. Grainger’sscheme in2008,however,wasentirelydifferent.First,the
developmentbriefforthesiteatthetime“didnotincludethemarketasagiven”
and,asaconsequence,“notasingleretailunitintheGraingergroundfloordesign
isaslargeasthecurrentmarket”(p.16).Grainger’sschemein2008wasfor
individualretailunitsalongSevenSistersRoad,theHighRoadandWestGreen
Roadofvaryingsizes.TherewasnounitspecificallydesigntoreplacetheMarket
hall,asnotedintheReport: “notasingleretailunitintheGrainger groundfloor
designisaslargeasthecurrentmarket” (p.16).Thiscanbeclearlyseenfromthe
draftfloorplanforthe2008application(Appendix8).
6.4. Given thepremiumrentlevelsontheHighRoad, USMconcluded that “thebest
optiontoevaluateiswhetherthismarketcouldoccupytheSevenSistersRoador
WestGreenRoadsides”(p.13).Evenwhencombined,however,thesetwoareas
ofretailspaceonlyprovided9,149sqftingrossspace,producingapproximately
5,489sqftinretailspace.Neitheroptionwouldthereforehaveaccommodatedall
oftheTraders,whoneededatleast6,150sqftin2008.Thisclearlyhadanimpact
onUSM’sviabilityassessment,giventhelossofatleastsomeoftheTraders.
6.5. IdiscussedinSection4 mycriticismofUSM’s estimateofTraders’licencefeesin
2008:bymycalculationsUSMiswrong tostatethatthelicencefeewas£31/sqft
(seeUSMReport,pp. 8-9).Onthefigurescited,thelicencefeep.a.wasactually
£39.41/sqft.Asaresult USM’s calculationsbasedonafeeof£31/sqftare
incorrect.AlsoIhavenoted thatthesefees for“internal”units haveincreasedby
52.25%since2008 andIassumethattherewillsimilarlyhavebeenafeeincrease
for“front”units(asexplainedaboveatpara.4.9-11).This isclearly sustainableas
theMarketisfullyletwithawaitinglist of14traders.
6.6. AtSection5.b,USM estimates thatTraders’feeswillrisetoaround£90/sqft,an
increaseof197%from£31/sqft.These calculationsaretotallyirrelevantin 2017:
75
i. Traders’LicenceFeeshavenowbeenfixed,asperSection4;
ii. TheaveragelicencefeespresentlypaidbytheTradersare£60/sqft
and£64/sqft,sothepercentageincreaseis inaccurateanyway;
iii. USMhad torelyonrentfigures/sqftforGrainger’s2008plan,based
onhavingmultiplesmallerunitsandnothingthesizeoftheMarket
hall.Thisisasignificantdifferencefromthepresentposition:
GraingerisnowobligedtoprovideasingleMarketspacetoshell
condition,whichtheMarketOperatorwillfitout.
iv. USMassumedanadditionalservicechargeof£3/sqft andan
additionalcostof£15/sqftthroughtheMarketOperatorpassingon
itsrunningcosts– thisisnotthecaseunderthefixedschemeof
LicenceFees;
v. USMassumedthattheTraderswouldhavetopayincreased
businessratesof£10/sqft,anincreaseoftentimestheirpositionin
2008.IaminstructedthatonlyoneTradercurrentlypaysbusiness
rates:everyotherTraderwillbeexemptastheirpremisesarebelow
thecurrentrateablevaluethresholdof£12,000.
6.7. Crucially,inthecircumstancesconsideredbyUSM,therewasnoprovisionfora
TemporaryMarket:“Thedevelopmenttimespanmeansthatimpetusand
momentumwouldbelost.Thetradersallneedtocontinueoperatingtheir
businessesnowandwouldnotsustainabreakof2-3years.Itismorelikelythat
thefragilityofindividualbusinesseswouldmeanthatmanywouldsimplyclose
down” (p.4).Assetoutabove,theTemporaryMarket isan essentialelementof
theGraingerscheme:withoutit,theMarketwouldbelost.
6.8. AllofthesefactorsledUSMtoconcludethat“wethinkthatitwillnotbesensible
oreconomicallyviabletorelocatethismarkettothe[2008]scheme”(p.20)and
advisedthat“thefutureviabilityofthetraderintheSevenSistersMarketisnot
dependentonoperatinginthislocation.Thereisachanceofsavingthetradersby
movingthemtoalternativelocations”.Thisiscertainlynotmyviewinthe
circumstancesof2017:IamsatisfiedthattheMarkethasauniqueopportunityto
relocateandthriveintheNewMarketArea.
6.9. Inmyview,therefore,theUSMReportprovidesusefulbackgroundandhistoryfor
theMarket.Italsoshowsthat themajorityofTradershavealreadyweathereda
significant increaseinlicencefees.However,theReport’sconclusionsonthe
Market’sviability,onrentincreasesandothersuchmatterscannot bereliedon in
anymeaningfulwaywhenconsideringthecurrentScheme.Theseconclusions
are basedonfacts,estimatesandcircumstanceswhichhavechangedenormously
overtheinterveningnineyears.
76
SECTION7:ResponsetotheMarketTraders’StatementofCaseandtheWardsCornerCoalitionScheme
7.1. IhavebeenprovidedwiththeStatementofCase onbehalfoftheSevenSisters
MarketTraders.EveryissueraisedbytheTraderswhichisspecifictotheMarket
initscapacityasamarket(ratherthanasacommunitycentreorhumanrights
issues)hasbeenaddressedindetailintheabovesections.
7.2. InthissectionIidentifytheseissuesandstatewheremyopiniononthemcanbe
foundinmyreport,whereIamqualifiedtogiveanopinion.Paragraphnumbers
refertotheMarketTraders’StatementofCase.IalsoaddresstheWardsCorner
CoalitionScheme(alsocalledthe“AlternativeScheme”),assetoutintheDesign
andAccessStatements(“DAS”)submittedwiththatplanningapplication.
i) TheTraders’StatementofCase
7.3. Paragraph11(a)and(b)refertowebsitesrecognisingtheMarketasa“significant
Londontouristattraction”andtoastatementbyformerMayorBorisJohnson’s
spokespersoninsupportoftheMarket.Iappendscreenshotsofthesewebsites
andthetextofthestatementatAppendix9.
7.4. Paragraph46 (a),(b),(c) and(d) allreferenceincorrectandoutdatedlicencefee
estimates. Section4setsoutmydetailedcommentaryonGrainger’supdated
commitmentsontheLicenceFees:asIhaveshowntheincreasesin feeswillbe
nothinglike300%(InotethatIamnotqualifiedtoaddressthepointsonEquality
ImpactAssessmentissues).
7.5. Paragraph46(a) statesthattheexistingrentsinthemarketareapproximately
£31/sqftperyearbutthatthe“likelyfuturerentpayablebymarkettraders”
wouldbe“around£90/sqftperyear”.Ihaveexplained inSection4 thatIdonot
understandwhereUSMhavegotthefigureof£31/sqftp.a.from:itseemstometo
bewrong.MycalculationssuggestthatrentsinMay2008were£39.41/sqftp.a.
for“internal” units,themajorityoftheMarket.8
7.6. TheUSMReport’scalculationsonthelikely futurerentpayablebymarkettraders
weremadeinsignificantlydifferentcircumstancesfromthecurrentsituation,asI
setoutinSection6.Thebasesforthecalculationsofanincreasefrom£31/sqftto
£90/sqftareno longerrelevant.
7.7. Paragraph 46(b) isbasedonanincorrectunderstandingoftheformers.106
which,inanyevent,hasbeensupersededbytheDDV’sLicenceFeesschemeand
8 AsIexplainabove(atpara.4.9-11)Idonotbelievethatlicencefeesin2008were“roughlydouble”(£80/sqft)for“front”units(giventhattheyarenowanaverageof£64/sqft),althoughitisverylikelythattheywouldhavebeenchargedmorethan“internal”unitson£39.41andlessthanthecurrent£64/sqft.
77
theobligationtohaveregardtotheCouncil’spoliciesontheMarket("New
MarketAreaScheme”,Sch.2,p.8-9 DDV).Ihavealsodiscussed abovethatitisin
theMarketOperator’sinteresttomaintainthecurrentmixtureoftheMarket,in
thatpreservingtradersisabetteruseofresourcesthanseekingnewonesandin
thatthereisalot ofuntappedpotentialinthisuniquecombinationofTraders
fromLatinAmericaandotherunusualnationalitiesandculturalgroups.
7.8. Further,assetoutabove(para.4.5),currentlicencefeesare,onaverage, £60/sqft
forinternalunitsand£64/sqft p.a. forunitsfrontingtheHighRoad.Idonot
understandthefigureof300%increase,unlessitisamistakeincalculatingthe
percentagedifferencebetween£30and£90/sqft(anincreaseof200%).This
miscalculationofa300%rentincreaseisalsomentionedatparagraph60,as
evidencethattheTraders“arelikelytolosetheirbusinessesandlivelihoods”.As
IsetoutinSection4,inmyviewitisascertainasitcanbethattheTraderswillbe
abletoweathertheLicenceFeeincreasesproposedinthe DDV:theworstcase
scenarioisanaverageof6%increaseperyearacrossthefiveyears.
7.9. Paragraph46(c)statesthatanincreaseinrentfrom£30/sqftto£90/sqftwould
“decimatetheexistingMarketbypricingoutthecurrentTradersandremoving
LatinAmerican,Afro-Caribbean,AfricanandotherBMEbusinessowners”.In
Section4I notedthatIhavenotseenfiguresforindividualTraders’turnoveror
profitsbutthattheMarkethasalreadyhadanincreaseinlicencefeesfrom
£39.41/sqftto£60/sqftfor“internal” unitsandfromanunknownrenttoan
averageof£64/sqftfor“front”units.ClearlythishasnotdecimatedtheMarket
andthereisstillavibrantmixofculturespresent:itisfullandthereisawaiting
listof14traders.
7.10. Paragraph 50 statesthatthe“Councilhas…overlookedthefindingsintheUrban
SpaceManagementReport“theimpactoftheincreasedcostsmeansthenew
developmentisunviablefortheexistingmarketbusiness”.” Ihaveanalysedthe
USMReportinSection6:theReport’sconclusionsontheMarket’sviabilityand
estimatedincreasesinrentorcostsfrom2008arenolongerrelevanttothe2017
situation:circumstancesareverydifferent.
7.11. Paragraph54 statesthat "theavailableevidencestronglysuggeststhat, forthe
vastmajorityofmarkettraders, theOrderSchemeisunlikelytoenabletheir
continuedtrading”.Asmentionedabove,theevidencecitedintheStatementof
Caseregardingrentisincorrectandthisstatementisbasedonanincorrect
readingofthesupersededs.106agreement.TheDDV,inmyopinion,provides
everyreasonableassurancethateveryTraderwhowantstomaketherelocations
willbeabletodosoandcontinuetrading.
7.12. Paragraphs87-92arguethatthes.106failstosecurethefutureoftheMarket.
The licencefee figurescitedareagainbasedonamistakenunderstandingthat
78
currentMarketrentsare£31/sqft.Thequotedpercentageincreasesare
thereforeincorrect,evenonthepreviouss.106,andaresupersededinanyevent
bytheLicenceFeesintheDDV.
7.13. Paragraph88(c)arguesthatthes.106wouldnotenablea“significantproportion”
ofTraderstorelocate,citinginsupportdatafromthe2012MarketandBusiness
Survey(presentedintheEqualityImpactAssessmentbyAecom,takenfrom
Question11oftheSurvey,CD11/4).Thesequestionsandanswersare basedon
outdatedproposalswhichhavebeensupersededbytheDDVobligations.I
remainconfident,asIhavedescribedindetailinSection5,thattheTraderswill
besupportedincontinuingtheirbusinessesintheTemporaryMarketandNew
MarketArea.
7.14. Paragraph89statesthat anysuggestion thatthelong-termfutureoftheMarketis
secured“byreasonsofprojectedincreased footfallorspendingisalso
fundamentallyundermined”byastatementmadetothePlanningSub-Committee
on25th June2012that“therecouldbenocertaintyaroundthisissueasitwasnot
possibletopredicthowsuccessfulthenewmarketwouldbe”.Ofcourseitisright
thatpredictinghowsuccessfultheNewMarketAreawillbeisdifficultandcannot
possibly beacertainty.Inmyview,however,theanticipatedimprovementsin
thebuiltenvironment,acoordinatedmarketingandadvertisingplan,amore
visibleandeye-catchingentrance, andthelongstandingcommunitysupport
alreadyenjoyedbytheMarketmeanthatIamascertainasIcanbethatthe
Markethaseverychanceofthrivinginitstemporaryandpermanenthomes.
7.15. Paragraphs121-127statethattherearealternativeplansandlocationsforthe
development.InsofarasthisargumentreliesontheWardsCornerCoalition
schemeforre-providingtheMarket,Idiscussmyconcernswiththisbelow.In
summary,theseare:
i. ThereisverylittledetailintheDesignandAccessStatementsthatI
haveseenwhichdescribetheplan:therearethereforenoguarantees
orobligationstothelevelofdetailgoneintobytheDDV.
ii. TheWCCplantousethecornerbuildingasaTemporaryMarketfor
theTradershasnotbeenthoughtthroughinanyseriousway:using
theentirecornerbuildingwouldnotbeenoughspacetohousethe
currentTraders,andtheschemeonlysuggestsusingtheground
floor.Thetotalgrossareaofallthreefloorsis620sqm,or6,674sqft.
The Traders'stallsaloneneed6,200 sqftevenwithoutspacefor
circulationandservices.
iii. Assetoutabove(paras4.39-40), there isnodetailgivenonrent
althoughitishintedthatanincrease willbenecessary.Usingthe
79
roughfiguresIhaveestimated thattheWCCschemewould
necessitateanincreasetoatleastthefeesintheDDVschemeand
probablymuchhigher,giventheviabilityissues.
iv. TherearenoguaranteesofthekindgivenintheDDV:nothingon
provisionofservicesintheTemporaryMarket, nothingonstallsize
ineithertheTemporaryMarketortheNewMarketArea,nothing
abouthowlongTraderswouldhavetodecideiftheywantedto
accepttheoffer,noguaranteesonlicencefeesandsoon.
7.16. InsofarasIamqualifiedtoaddressthem,IamthereforeconfidentthatmyProof
addressestheobjectionsraisedintheTraders’StatementofCase.
ii) TheWardsCornerCoalitionScheme
7.17. AtthispointInotethattherearenoalternativeproposalsatallprovidingany
kindofdetailalongthelinesoftheDDVands.106agreement.Theonlyother
schemeofwhichIamawareisthatsetoutintheWardsCornerCoalition’s
planningapplication.Ihaveseen theDesignandAccessstatementforthis
scheme(CD9/15) butitcontainssolittlepracticaldetailthatitisdifficultto
compareitinanymeaningfulwaywiththeGraingerplans.HereIpickoutthree
keyissueswiththeWCCschemeaspresentedinthe DAS.
7.18. Thereare no othercomparable guaranteesinanyotherschemethatthe Traders
wouldbeprotectedinreturningtoarefurbishedMarketastheyareunderthe
currents.106andDDV.Amarketoperatorthat hadtospendsignificantsumson
refurbishinga market would beabletoterminateeverylicenceintheMarket and
refurbishtheMarketwithoutthecostanddistractionoftryingtokeepthecurrent
Traderstrading.Themarketoperatorcouldthenseeknewtraderstofillthenew
Marketinkeepingwiththedevelopmentstyle.AsI haveexplained,thiswouldbe
unusualbut possible:themarketoperatorcanterminateanylicenceonaweek’s
noticeandtheTradersneedreassurancethatthiswouldnothappen.Underthe
Graingerscheme,theTradersareprotected.
7.19. IntermsofprotectingtheTraders’continuityofbusinessduringrefurbishment,I
notethattheWCCDASproposesrelocatingtheTraderstothe“cornerbuilding”
duringtheirproposedworks(pp. 76-77,DAS).Itappearsthattheplanistouse
onlythegroundfloorofthecornerbuildingtohousetheTraders(thefirstand
secondfloorsareintendedtobeusedasflatsandanartgallery).
7.20. Thereis nothinglikeenoughspacetohousethecurrentMarket here:evenusing
theentirecornerbuildingwouldbeinsufficient.Drawings in theWCCDAS
indicatethatthetotalgrossareaofallthreefloors is620sqm,or6,674sqft (pp.
42-44,DAS).Traders’stallsaloneneed6,200 sqftevenwithoutspacefor
circulationandservices.
80
7.21. IcannotemphasiseenoughhowimportanttheTemporaryMarketistomy
supportfortheGraingerscheme.Withouthavingapre-preparedspacewhichis
properlysetupasafunctioningmarkethallwithappropriateservices,enough
room,easilyaccessiblebythepublic,andclosetotheexistingMarket,theMarket
anditscommunityofTraderswouldbeataseriousriskofsimplydisintegrating.
Ihavealreadydescribedhow difficultitwouldbefortheseTraderstosurvive
withouttradingforanythingmorethanacoupleofweeks.
7.22. Inmyview,theissueofprovidingatemporarymarketisaseriousweaknessin
theWCCscheme.Ontheinformationavailable,theWCCschemehasnotgrasped
thescaleoftheissuesinvolvedinre-providingtheMarket orkeepingtheMarket
tradingwhilstrefurbishmenttakesplace.There arenoguarantees forTraders
thattheywouldbeabletotradeanywhereduringanyrenovationsperiod,neither
arethereanyindications ofhowlongthatrenovationperiodmightbe.Farfrom
guaranteeingthe Market’scontinuedexistence,theWCCschemeposesarisktoit.
7.23. Ihavesetoutmyestimatesforthelicencefeesthatwouldneedtobechargedina
WCCrefurbishedmarket above atparagraphs4.42-43.The DASprovidesvery
littledetailbutitseemstomesimplyinevitablethattherewouldberent
increases.Again,therearenocomparableguaranteestotheGraingerscheme
thatthelicencefeeincreaseswouldbelimitedtoanythinglikethecompetitive
DDVrates.
7.24. Inmyview,theWCCschemedoesnotpresentacomparablealternativetothe
OrderScheme.Theguaranteesgiveninthe DDVands.106areessentialto
protectingthecontinuedsuccessoftheMarket.Thefactthattherearenosimilar
guaranteesinanyotherplanfortheMarket’sfuture,indeedthatthereisnoother
planatallwiththislevelofdetail atall,isacrucialconsideration.Intermsofrisk
reductionfortheTraders,theOrderSchemepresentsfargreatersecuritythan
anyalternatives.Aschemewhichfailstomatchalloftheobligationsprovidedby
GraingerwouldbefarriskiertotheMarket’schancesofsurvival.
81
SECTION8:ConclusionsandSummary
8.1. ThepurposesofmyproofaretoreviewthestateoftheMarket;toassess
Grainger’scommitmentstoafixedschemeofLicenceFeesandpossible
alternatives;andtoreviewandcommentontheobligationsinthes.106and
DDVforre-providingtheMarketintheNewMarketArea.Ialsoconsiderthe
2008 USMReportandrespondtotheMarketTraders’StatementofCaseandthe
WardsCornerCoalitionScheme.
8.2. MyoverallconclusionisthattheMarketclearlyneedssignificantinvestment
andthisOrderschemeoffers thebest,mostcomprehensiveandsafestrouteto
achievingthegoalofaflourishing,reinstatedMarketinthesamelocation.
8.3. InSection3,Ireview theMarket andconcludethattheMarketisunique,vibrant
andtradingtocapacity:Tradersarebeingsuccessfulindifficultconditions.
However,theMarkethasverylittleappealtoanybodynotalreadyusingit;the
entrancesarepoorandundefinedanddonotencourageacasualshopper.
8.4. Thepoorconditionofthebuildingmeansthatchangeisinevitableand
necessary tosecuretheMarket’sfuture:itissimplynotfeasiblefortheMarket
tocontinueoperatingindefinitelywithoutinvestment.TheMarketistherefore
notoperatingatanythinglikeitsbusinesspotential:itlacksdirection,leadership
andabasic marketingplan.Thisisnotacriticismbutanindicationofthescale
oftheopportunitiesavailable. Thereisachance tocreateahighprofile,modern,
clean,spaciousmarketwhichwillonlyencourageadditionalfootfall.
8.5. ThisMarketisripeforchangeanddevelopmenttoenhanceitscurrentoffering
andcomposition,nottochangeit. ThisOrderSchemerepresentstheTraders’
bestpossibleopportunitytokeepandimprovetheirMarket.
8.6. InSection4Idiscuss licencefees,which werealwaysgoingtobeamajor
concernfortheTraders.Graingerhascommitted to afixedschemeofLicence
Fees,beginningintheTemporaryMarketandending after30monthsinthe
NewMarketArea(includinga30%discountforthefirst18months).The
LicenceFeesunderthisschemearecapped andrepresentamanageable
increase.This decisionisahugebenefittoTradersintermsofbusiness
planning:theyearsofcertaintythatthisprovides willbeofrealvalueasthe
TraderssettleintotheirnewMarket.
8.7. Iamconfidentthatthese figuresandincentives are affordableandgivetheNew
MarketArea everychanceofsuccess.Infact,underthefixedscheme,some
Traderswillpayless thantheydonow.ForTraderswhosefeesincrease,even
includingVATthelargestincrease overandabovepresentaveragerents is
33.55%overfiveyears.IamasconfidentasIcanbethatasmanyTradersas
wanttowillbeabletocontinuetradingintheNewMarketArea.
82
8.8. WithoutGrainger’sscheme,licencefeeswillalmostcertainlyincreasewhatever
happenstotheMarket– whetheritcontinuesasitisona“donothing”basis,or
withrepairsona“makedo”basis,orundertheWCCscheme.Theadditionof
VATtoTraders’licencefees is,realisticallyspeaking,inevitableinanysituation
involvingrepairs.Underanyofthese alternative options,Traders’feesarelikely
tobehigherthanundertheGraingerscheme.
8.9. Althoughthereisanelementofspeculation – giventhatthisissomeyearsaway
– myinstinctisthat,inthelongterm,thistrendwouldcontinue and theTraders’
feeswouldbelowerunderGrainger’sschemethanunder the otheroptions.
8.10. Itisveryimportanttoemphasisethatsettingaviablerentistherefore inthe
MarketOperator’sinterestsjustasmuchasitisintheTraders’:market
operatorsneedtokeeptheirmarketsfullandbustling.Iamthereforeconfident
that,evenafterthefirst30monthsintheNewMarketArea,theLicenceFee
levelswillnotsuddenlyincreasebeyondthebudgetoftheTraders.Comfortcan
betakenfromtheobligationtosetLicenceFeesat“alevelthatisconsistentwith
theCouncil’spolicyobjectivetoattractandpromotelocalindependenttraders”.
8.11. InSection5Ianalyse theprovisionsofthes.106andDDVproposedbyGrainger.
TherearecriticalissuesthatmustbeaddressedfortheMarkettosuccessfully
relocateandthrive initsfinallocation.Alloftheseissueshavebeenconsidered
andaddressedinthes.106andDDVobligations.Iwouldgoasfarastosaythat
therearenofurtherreasonableadditionstothes.106thatIcanidentify.
8.12. TheobligationtocreatethenewMarketismetbythes.106andDDV,with
currentfloorplans showingenoughspacetorelocateallTraders matchingtheir
existinguseoffloorspaceintheNewMarketArea,hencetheguarantee ofan
identicallysizedstallintheNewMarketArea.Graingermustgivesixmonths’
noticebeforeclosingtheMarketandtheTemporaryMarketatApexHousemust
be readyforoccupation.Ihavediscussedtheimportanceofa rapid relocation
witha movingcompany andIamconfidentthiscanbeachieved.Thiswillallow
businesscontinuitywhichiscrucialto maintainingcustomersupportand
Traders’cashflow.
8.13. ThelocationoftheTemporaryMarketiscrucialtodeliveryoftheNewMarket
Area;ApexHouseanditsproximitytotheMarketandtheNewMarket Area are
vitaltotheMarket’sretainingitsidentity overtherelocations.TheTemporary
MarketisgoingtoprovidemorefloorspacethanisavailableintheMarket:the
latestfloorplanshows12,472sqftofgrossinternalareaproviding7,740sqftof
rentablespace(compared with6,200sqft now).TheOperatorwillbeableto
accommodateallexistingTraderswithadegreeofflexibility.Thisdemonstrates
arealwillingnessonGrainger’spartfortheprojecttosucceed,astoooftenthis
isspacethatissacrificedtocommercialpressures.
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8.14. TherelocationOfferwillbeofferedtoa)anyTraderwhoisoperatingaunitat
thedateoftheClosureNoticeandb)hasbeenoperatingaunitforthreemonths
beforetheClosureNotice.ThisguaranteesthatallcurrentTraderswillbe
offeredapositionintheTemporaryMarket,ensuringthatthecurrentcultural,
ethnicandretailbalanceisgoingtobepreserved.TheOffertoQualifying
Tradersalsospecifiesfreerelocation,guarantees“reasonableendeavours”to
ensureanequalsizeofunit(withaminimumof90%),a threemonthrent-free
periodandfixed LicenceFees.Thisconstitutesacomprehensivepackageof
inducementsalldesignedtoenhance thesuccessoftherelocation.
8.15. TheClosureNoticewillbeissuedsixmonthsbeforetheclosureoftheMarket
andTraders willhaveaminimumofthree months todecideiftheywishto
accepttheOffer,whichprotectsallparties.TheTraderwillbeabletoseethe
TemporaryMarket inanearly-finished state andtheOperatorwillhavetimeto
recruitnewtradersifnecessary.A “Releasepayment” isunusual;Tradersdo
nothavesecurityoftenureandtheOperatorcouldservenoticeandcarryout
therefurbishmentwithanemptybuilding. Instead,Graingerhasdevelopeda
planthatgiveseveryopportunityfortheMarkettosurviveandflourish.
8.16. TheTemporaryMarketcannotbecloseduntiltheNewMarketAreaisreadyfor
occupation.Thisprovidesthesamelevelsofprotectionandcontinuityasthe
previousrelocation.Theprocess forTradersmoving fromtheTemporary
MarkettotheNewMarketArealargelymirrorsthemove totheTemporary
Market.ThisprovidesthesamelevelofcomfortforthefinalrelocationandIam
confidentthatalloftheseincentivesalongwithadiscountedandknownrent
givetheNewMarketareatheoptimumchanceofasuccessfullaunch.
8.17. TheproposedNewMarketArealayout(thegrosssizeofwhichcanbeincreased
toprovideatotalfloorareaof11,270sqft,providingaround6,200 sqftof
rentable space andmorethanthecurrentMarket) demonstrates adesireto
ensuretheMarket’ssurvivalwhencommercialpressuresoftendictatethe
reductionofthespaceavailable.Theredevelopment providestheopportunityto
openuptheMarket;itwillhavealarger frontagewithmoreunitsdirectlyfacing
theHighRoad.Thisisalsoachancetoimprovethekerbappeal drastically.
8.18. TheMarketFacilitator role andtherequirement toadvertisebothrelocationsis
asignificantassettotheMarketanditsfuture.TheMarket lacksacoordinated
marketingstrategyandlargelyreliesonwordofmouthandexistingcustomers.
ThereisanopportunitytoembracetheLatinAmericanculturewithinthe
Marketandwidenitsappealtothisdemographicandthewiderpublic.
8.19. TheTraderswill alsobenefitfromthebusinessplanningaspectoftheMarket
Facilitatorrole,whichwillbeespeciallyimportantwhenconsideringwhetherto
registerforVAT tomitigatetheinevitableadditionofVATtotheirrent.Iwould
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expecttheFacilitator toproduceadetailedplan,tailoredtoeachTrader,
showingtimelines andkeystagesoftherelocation alongwiththeintricate
detailsofhowtherelocationswillwork. TheFacilitatorshouldalsoworkwith
Traderswhorequireadditionalsupportindeveloping theirskillsets.
8.20. Thereisanopportunitywhenfinalisingtheinternallayoutofbothmarketsto
makeimprovements,especiallyaroundseatingforcateringunitsandthe
encouragementofthesocialaspect.InbothoftheseareastheMarketlacks any
coordinatedthoughtasthelayouthasgrownorganicallyovertime.The
requirementtoconsultwiththeTraderswillensurethatallaspectsarecovered.
8.21. Insummary,inmyexperiencethelevelsofsupportprovidedbyGraingertothe
TradersinrelocatingtotheNewMarketAreaareunprecedentedintheir
thoroughnessandcommitmenttodeliveringtheNewMarketArea.
8.22. InSection6Iconsider the2008USMReportanditsconclusions.First,itseems
tomethatthereisan errorinthecalculationofthelicencefeespayablein2008:
thefigureof£31/sqftshouldhavebeenroughly£39.41for“internal”units.
Secondly,theReportprovidesusefulbackgroundfortheMarketandshowsthat
Tradershavealreadyweatheredasignificantincreaseinrent.TheReport’s
conclusions,however,ontheMarket’sviability and rentincreasescannot be
reliedon whenconsideringthecurrentScheme.Theseconclusions arebasedon
facts,estimatesandcircumstanceswhichhavechangedenormouslyoverthe
nineyearssincetheReportwaswritten.
8.23. InSection7Iconsider theMarketTraders’StatementofCaseandbrieflyanalyse
theWardsCornerCoalitionschemeforre-providingtheMarket.TheTraders’
StatementofCaseislargelybasedonamisunderstandingaboutthelicencefees
currentlypayable.ItisalsorespondingtoproposalssupersededbytheDDV.I
amconfidentthatIhaveaddressedtheseissuesinmyProofandtheTraderscan
beconfidentthattheirinterestsareprotectedunderthes.106andDDV.
8.24. IntermsoftheWCCscheme,ontheinformationavailableitdoesnotpractically
guaranteethere-provisionoftheMarketatall,letalonewithanythinglikethe
detailof theOrderscheme.Significantly,theplansfortemporarilyinstallingthe
Market inthe“cornerbuilding’s” groundfloor donotprovideenoughspace: the
entirecorner buildingwouldnotbeenough,letalonethegroundfloor.
8.25. TheOrderSchemeisaunique opportunitytosecurethelongtermfutureofthe
Market.Changeisinevitableandthisdevelopmentprovidesafantastic
opportunitytocreateanewMarket, whileallowingforbusinesscontinuityin
theclosestpossibletemporarylocation. Theseconditionsareunlikelyto
presentthemselvesagain.The DDV obligationsarecomprehensiveandwill give
theMarketeverychancetorelocateandthriveinanew,permanenthome.