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Liability for Unlet Units

6.1 What is the projected maximum cost to the ACC council tax payer, of unlet units at the Project, per annum?

The annual rent has been quoted in the media at 5million. This assumes that no space within the development is let.

  • As previously noted contingency sums are available in the initial years.
  • The Council has a long term agreement for the hotel and strong interest in other parts of the development.
  • The development has not yet been assessed for rates.
  • The level of service charge will be finalised depending on the final tenant mix and services they require.
  • Repairs are the responsibility of sub-tenants.
  • The Council's liability for repairs is restricted as it takes ownership of the site at the end of the lease.
  • It is normal for developers to establish sinking funds within developments to safeguard future income or liabilities.

 

6.2 What is the minimum level of occupancy required for the Project to break even?

Were the Council to divulge this information the market/potential tenants may be able to calculate the minimum level of rent that the Council may accept and as such affect the negotiating position of the parties. It could result in reduced income for the Council. Keeping commercially sensitive information confidential is an established practice for the public sector when working with other parties - particularly if disclosure could damage commercial dealings.


6.3 What is the level of occupancy that must be achieved, annually, for the Project to achieve the 100m profit claimed by Council Leader Jenny Laing?

Were the Council to divulge this information the market/potential tenants may be able to calculate the minimum level of rent that the Council can accept and as such affect the negotiating position of the parties. It could result in reduced income for the Council. Keeping commercially sensitive information confidential is an established practice for the public sector when working with other parties - particularly if disclosure could damage commercial dealings.