The Upgrading Empty Commercial Property Fund is aimed at companies that are planning to refurbish, upgrade or convert empty or underused commercial premises.
The fund is £500,000 and the maximum funding that can be applied for per application is £120,000. Typical funding per application is expected to be £50,000.
Funding can be in the form of a loan, equity share, percentage of rental income or viability gap grant which is decided on a case by case basis.
This fund is delivered by Locate East Sussex, which is the first point of contact for applicants. All applications are appraised by the Grants and Loans Panel.
The Upgrading Empty Commercial Property Fund is for commercial buildings and is aimed primarily at light industrial or office buildings. Retail properties will not generally be considered.
The property must have been unoccupied or only partly occupied and demonstrably inappropriate for commercial use for a minimum of six months prior to application.
The property must be over 10 years old.
Refurbishment costs should normally be less than £19,214 per job created. Costs will however be negotiated on ‘exceptionals’ depending on the negative impact the building has on the near environment and proven demand in the area.
The estimated end value of the refurbished property must be equal to, or more than the pre- refurbishment value plus the value of the funding.
The minimum floor space considered for this fund is 1,000 sq ft. / 92.90 sq m.
The final scheme must have a use with a job density of over one job per 36 sq m (Gross Internal Area).
A maximum grant or loan is available of £120k per property. The match funding level (excluding value of the building) will be at a minimum of 30%. A charge may be put on the property so that in the case of a sale, the investment by East Sussex County Council can be reclaimed.
Depending on the individual situation and ownership of each building, the funding contract could be:
- a deferred loan to the property owner to be paid back on or around 75%+ occupancy at favourable terms when the scheme is viable in the medium term.
an equity share, where the building conversion could be viable in the medium term but the owner cannot support a loan. In this case East Sussex County Council will take a share of the ownership of the property and receive an equivalent and negotiated share of net rental profit.
- a deferred percentage of rentals as a proportion of the investment by East Sussex County Council providing a return over an agreed period.
- a direct viability gap grant to property owners to refurbish, sub-divide, upgrade part of and let the property on easy terms where the works are not financially viable without public sector financial intervention. This is suggested for smaller scale refurbishment requirements in the order of £20,000 - £50,000 total cost. This may include an overage agreement whereby some of the grant may be claimed back if the property yields a higher level of income than predicted.
An initial site visit and assessment of the premises will be carried out by Locate East Sussex.
Assessments are likely to cover the estimated cost to refurbish or sub-divide, financial viability of planned development, evidence of demand for completed units, projected number of jobs refurbished premises would accommodate.
Projects which pass the initial assessment will be notified to the Economic Development Team for Stage 1 Approval.
Stage 1 Approval will be dependent on demand and allocation across the county. It is at this stage that the terms of the possible funding will be negotiated.
Successful Stage 1 applications will be presented to the Grants and Loans Panel which will make a recommendation to the Director of Communities, Economy and Transport.
Applicants for funding of more than £50,000 will be required to attend the panel.
If the project is recommended and approved by the Director of Communities, Economy and Transport, a contract will be drawn up to include the following points:
- Tender evaluation process. All building projects must go out to tender to include using the Build East Sussex Network. At least three costed tenders must be provided for each building project. The contractor does not have to be a member of Build East Sussex. The rationale for selection will be required.
- Up to three stage payments can be made on receipt of surveyor’s signing off.
- Agreement that no funds will be paid in advance of works completed.
To find out more email email@example.com or call 01424 205085.