We recently announced that the planning application to redevelop the Dyke Pub was withdrawn. Following this, on 7th October, the owners notified the council of their intention to sell the pub. This is in line with regulations set out in the Localism Act 2011 with regards to disposal of Assets of Community Value (ACV). The sale is being handled by the agent Fleurets, with an asking price of £1.35m.
There are two main approaches we can consider to help safeguard the future of our local:
1. Approach potential buyers who would be a good fit for our community
2. Make a Community Bid to purchase the pub ourselves
The huge community interest in the pub makes it an attractive prospect for potential purchasers, and we have a number of pub contacts we can use to publicise the sale. We can also provide information about the community’s interest in the pub to the owner’s agent, Fleurets. The strength of local feeling is demonstrably high, with the nomination as an Asset of Community Value supported by a petition of over 1000 local people (excluding signees from further afield), and the recent planning application to redevelop the site receiving over 500 objections. The agent is obliged to tell any prospective purchaser that the pub is listed as an Asset of Community Value (ACV). Our wishes are not too onerous – we would like the whole of the ground floor to be run as a friendly community pub and restaurant, with ancillary uses or pub compatible uses (eg. B&B) on the floors above, and the whole garden used as a beer garden.
In addition, because the pub is an Asset of Community Value, the community now has a right to bid. The process is as follows:
- Following the owner’s notification of intention to sell, the council will write to us (as the group who nominated the building to be an ACV) and put up a public notice outside the Dyke.
- This starts a 6 week moratorium during which time we have the opportunity to express interest in bidding to purchase the Dyke. During this time, the pub cannot be sold to anyone other than a community group but the owner can continue negotiations with private purchasers.
- If we (or another community group) do express interest, the moratorium is extended to 6 months. This period allows the community to raise funds, including organising a mortgage, grants and community shares. During this 6 month period, the pub cannot be sold to anyone other than a community group. The owners can, however, continue negotiations with private purchasers. At the end of the moratorium, the owner is free to accept or decline any offers from the community or private purchasers. The community group does not have first refusal and the owner has no obligation to sell.
It is worth noting that there is no way of cutting the 6 month moratorium short if we withdraw from bidding, it is effectively locked in once an expression of interest is made by the community. The only way to cut the moratorium short is if a sale is agreed with a community group (either the nominating group or another eligible group).
We are all keen to see the Dyke operating as a full sized thriving community pub and restaurant again, be that in private or community ownership. As a community, we have a short period of time to decide how we want to move forward. The Save the Dyke group and the associated Dyke Pub Preservation Society are keen to hear whether the wider community want to concentrate campaign efforts on engaging private buyers, pursuing a community bid, or run both in tandem. Whichever route we choose, there is work to do and volunteers will be needed!
The Dyke Pub Preservation Society was formed in February 2017, with a view to purchasing the pub as a community. Woody Alva, who set up the group, remains committed to a community purchase and is excited to see it on the market:
“There is a real buzz in the community about the potential to buy the pub. If we own the pub as a community, we can take control of its future. We have already negotiated a preliminary community mortgage and there are several community funding opportunities. BUT there is still a lot of work needed. We will need people to buy shares, help with fundraising, and be prepared to get involved managing the pub in future to make it a success. It would be great to hear from people who want to pitch in. They did it at the Bevy in Bevendean – I don’t see why we can’t do it at the Dyke!”
We want to hear from you! Please let us know what YOU think. Do you think a community bid is the best way forward or do you think a private buyer would be best for our local?
Please e-mail us your thoughts on: email@example.com AND join us at the next community meeting held by the Dyke Pub Preservation Society on Tuesday 7 November at 8.30pm at The Church of The Good Shepherd Hall (please note venue change) – full details to be confirmed.
Sales and valuation history of the Dyke
- The current owners secured the lease from Enterprise Inns in 2010
- Various improvements were carried out before the pub re-opened, including a kitchen extension and new cold store, to facilitate a higher standard of catering.
- The current owners purchased the freehold for £900,000 in 2013, running the pub as a freehouse for the next 3 years.
- The pub changed use to retail in September 2016, and is no longer a going concern. The ground floor is currently vacant and the first floor is residential. Assuming the change of use to retail was lawful*, planning permission would be required to change use back to a pub.
- The Dyke Pub Preservation Society (DPPS) was established in February 2017 with a view to exploring a community bid.
- The current owners agreed to an independent valuation to allow the DPPS to make a community offer. The valuation was £965,000. An offer to purchase the pub for this amount was made in March 2017, but was declined by the current owners.
- Since the valuation, the historic bar has been removed from its original location and other building work has been part carried out. Work halted when a Building Preservation Notice was issued, and it appears that considerable making good and finishing is required.
- Fleurets are currently representing the owners with regards to the pub sale. The asking price is quoted as £1.35m for the freehold. Management figures provided by Fleurets for 2013-2015 show the business was comfortably profitable at that time.
Q – Would the current owners really want to sell to the community after so many objected to their recent planning application?
A – The owners have always said they would sell to the community at the right price. The DPPS had a positive and constructive relationship with the current owners when discussing the previous community offer.
Q – The current owners say they couldn’t make it work financially, so why would a new owner / community be able to make it work?
A – Management figures provided by Fleurets show that it was profitable from 2013-2015. Figures are not provided beyond that year. A local survey in 2016 showed that local people felt that, for whatever reason, the service and quality of the pub degenerated in the last couple of years. A new owner could inject new energy in the pub, tailor it to community needs and benefit from the huge uprising in the community since its shock change of use back in September 2016.
Q – If a private buyer was interested in buying the pub, wouldn’t they have come forward already?
A – Although the owners have been open to approaches from prospective purchasers, it has not been openly marketed. Now that it is officially for sale it is likely to generate more interest. And what’s more, we can actively spread the word.
Q – Wouldn’t private buyers be put off from taking interest if there is a community bid ongoing?
A – One of our advisors, Dave Boyle from Community Shares, told us that in his experience a community raising funds for a pub doesn’t drive anyone away. It leads to more bidding. If people are worried that they might be elbowing the community out of the way, then they come to talk to you, because they know you want the best for the pub and the community and they’ll want your support.
Q – If we don’t put in a bid, or aren’t successful in our bid what does this mean for the Dyke’s status as an Asset of Community Value?
A – It would still be an Asset of Community Value. This needs to be renewed every 5 years. Being an ACV has some use in planning, as a material consideration.
Q – Would we need to agree a purchase price in the first 6 weeks for a community bid?
A – No – in the first 6 weeks we would just need to express interest.
Q – The asking price is very high – how could we ever raise that much as a community?
A – Mortgages can be as much as 70%, and community grants are also available. The remainder could be raised as community shares. In addition to the sales price, additional costs include legal fees, start-up costs, and building works. Stamp duty will be significant. Careful consideration would need to be made to pitch the offer price right.
Q – What are the ongoing implications of running a community pub?
A – There are a number of models to consider. The community can be hands-on running the pub, or can appoint a manager to deal with day-to-day running, overseen by a community board. It is, however, a serious undertaking and community volunteers will be critical to its success. Community pubs do not need to generate profits in the same way a private business would, but there would be ongoing costs for staffing, mortgage repayments, building maintenance etc, so a sound business plan and willing volunteers would be essential to its success.
Q – Do we really have the expertise to consider making a community bid?
A – There is a wide range of skills in our local community! There is also a lot of help out there. The Plunkett Foundation, for example, offers advice and grants to community groups. There are around 70 community owned and run pubs across the UK, run by communities with no previous experience, including the Bevy in Bevendean. Many of you have met Dave Boyle from Community Shares at our community meetings, he is able to advise on grants and community shares, with his own fees covered by grants. We have also benefitted from the expertise of Dale Ingram from Planning for Pubs over the past year, and can appoint her to carry out further work in relation to the community bid.
Q – Where can I read more about community bids?
A – There are LOTS of resources online. Here are some of our favourites:
* Note the lawfulness of the change of use was challenged in a planning report made by Dale Ingram of Planning for Pubs http://savethedykepub.org.uk/blog/dale-ingrams-objection-planning-application/. Because the application was withdrawn, the council’s conclusions on this are currently unknown.