THE “lights could go out” at the Storey Creative Industries Centre after councillors decided that Lancaster City Council should not take control of the centre.
That was the warning of Michael Gibson, managing director of digital marketing company Fat Media after the decision at Wednesday’s full council meeting.
“The decision leaves us in no man’s land, with the potential for no one to be in control, the doors to close and the lights to go out,” said Mr Gibson, whose firm is due to leave the building in September.
Both Fat Media and mobile app developer Moshen decided to move out after the Storey board hiked service charges.
The council bailed out the Storey Creative Industries Centre Ltd (SCICL) with a £90,000 loan in February after it failed to break-in and generate a surplus following the withdraw of council grant support in April 2011.
Councillors at Wednesday’s full council meeting were told that cabinet’s decision earlier this month to take over management of the centre “was now more difficult to achieve and had greater costs and risks than was the case two weeks ago.”
A council report said that could cost council chiefs at least £200,000-£250,000 and it was now “reasonable to assume that the costs could not be managed within existing budgets”.
It said surplus balances would have to be used to cover the costs, which will include liabilities like energy bills.
Council chief executive Mark Cullinan admitted he would not have recommended that the council should take control of the centre if he had known the financial implications.
Mr Cullinan was also grilled by councillors about why he had approved the £90,000 loan.
Conservative councillor Roger Mace and Morecambe Bay Independent (MBI) member Coun David Kerr compared the situation to the Blobbyland crisis, with Coun Mace claiming the SCICL accounts showed it had been insolvent for two and a half years.
Councillors reconsidered cabinet’s decision after it was ‘called in’ by four Conservatives and one MBI councillor.
The situation developed rapidly after the quintet asked the council’s overview and scrutiny committee to consider six proposals at its meeting on Tuesday.
They said their proposals would help to safeguard existing businesses and help the centre to become self-financing.
In their ‘call in’ request they said the aim of the cabinet decision had been unclear and ignored “the financial implications of the preliminary actions decided upon and potential future costs”.
The overview and scrutiny committee agreed to refer two of the call in proposals to a specially-convened cabinet meeting later that evening.
One re-affirmed the council’s support for the vision for the centre, while the other said the council should negotiate to remove restrictions on the type of businesses taking tenancies “so as to increase the potential for full occupation of the lettable space in the building at an early date”.
At its meeting on Tuesday night, cabinet decided that because of the financial implications full council should make the decision.
Earlier on Tuesday, the council’s budget and performance panel requested a report on the situation and agreed a number of questions it wanted answering.
One demanded to know why a decision to loan the SCICL money was taken without democratic accountability.