Sparkbrook’s defiant traders fight over Survival Council’s £ 1million site selling plan

Provocative Sparkbrook traders have expressed anger at the council’s plan to sell a start-up business center “to the highest bidder” – for the second time.

Montgomery Street Trading Estate, in the heart of the inner city of East Birmingham, is expected to be marketed to investors soon, with a staggering expected value of almost £ 900,000 to £ 1million. That’s almost DOUBLE its value two years ago.

It was a blow to small business owners who frantically raised funds to buy the council-owned site as a cooperative themselves, to keep it from falling into the hands of for-profit developers. .

Read more: Sparkbrook traders fear they will be kicked out of city council’s Christmas sale plan

Traders based there include ice cream maker, pastry chef, vegan food producer, metal polisher, printer, license plate maker, Vespa scooter reconditioner, organic vegetable delivery company, laundromat, youth training center and chocolate maker.

Together, around 80 jobs are at stake.

They had wanted the board to support their alternative vision of selling the site to them to function as a non-profit, tenant-owned and managed business center.

They believed they had raised the money they would need to submit a viable new bid, based on the expected 2019 sale value of less than £ 500,000, said trader Alex McDonagh, a member of the cooperative.

Alex McDonagh, from the vegan cooperative Beet The System, a member of the Montgomery Street Business Center application team in Sparkbrook

They also believed the Labor-led council would actively support their efforts to secure the future of “a vital community asset”.

“We believe Leveling Up is in action, and that’s exactly the sort of thing the board should be pushing,” McDonagh said of the buyout plan.

But now they’ve been told the site’s value has climbed to nearly £ 1million – and that the board has no intention of considering the ‘social value’ of the co-op’s offering. .

“We have been treated appallingly by the council when our hope is just to keep this site in community ownership,” said McDonagh, who runs Beet the System, a food project providing cafes and stores with food. organic and plastic-free vegans.

“We thought they were committed to the cooperative model, but they clearly prefer to put profit before the community,” he said.

Standing firm: Tenants at Montgomery Street business center, pictured before pandemic

Traders had succeeded in proving the site to be a valuable community asset, earning a moratorium on a sale that ends next week. (December 13)

For its part, the council said it had worked closely with traders to try to reach a deal, without success so far.

They say the explosion in the value of the land is beyond their control and that it is the board’s responsibility to get the best price for all the assets it sells.

The issue was raised at the full Birmingham City Council meeting this week, Mr McDonagh presented his case to Council Chief Cllr Ian Ward in a question and answer session.

In his question, he asked, “Why does the board continue to ignore our social value, which you are legally obliged to take into account?” Why are you determined to sell our canal side site at the highest price to a developer?

“Working with us to keep and improve the last remaining start-up center in Birmingham will ensure a long term investment and a real upgrade, which will really benefit the people of Sparkbrook. “

The commercial area of ​​Montgomery Street in Sparkbrook
The commercial area of ​​Montgomery Street in Sparkbrook

In response, Cllr Ward said he hoped the board could still come to an agreement with the co-op, but it was his duty to get the best deal on any asset sale.

He said the previous valuation dated back to autumn 2018, when it was marketed to investors at auction for an asking price of between £ 450,000 and £ 500,000. This sale then failed and, after an approach from the traders of the domain, the time was given to them to prepare their own offer.

Only one offer received from them so far was well below market value, he said.

Cllr Ward added: “The agents did not agree to the co-op buying below the auction price (in 2018/19) and at no time did the board give assurance as to the level of offer he was willing to accept. The board has always been very clear that any offer must represent market value. “

“I would encourage the dialogue to continue for the short period that remains,” he added.

“The board recognizes social value, but it is also imperative to provide the best possible value when disposing of its commercial real estate assets.

“We do not envision the site being sold to a developer, but to an investor with expertise in industrial asset management. One would expect the investor to purchase the right to collect rent from tenant companies and over time invests capital – capital the council does not have – to improve buildings and ensure longevity of use. “

Ahead of the council meeting, Mr McDonagh and his fellow trader Tom Thompson lobbied the councilors who arrived and handed out leaflets describing their case.

Members of the Cross Party – including Shabrana Hussain, a member of the Labor cabinet, and her fellow Labor advisers Kerry Jenkins, Lisa Trickett and Zafar Iqbal – were among those who showed their support.

Tom, whose company Vegetropolis – an organic fruit and vegetable delivery service – is based on the estate, said the uncertainty and the council’s failure, in its view, to put “community before profit” was a huge disappointment.

He said traders would now face the likelihood of an increase in rents from a new investor and uncertainty about an investor’s future plans.

“I had to suspend investment in my business due to the uncertainty on the site. I built this business from scratch and hoped that a labor council would be there to support people like me and future entrepreneurs. There are things that are worth more than just the value of a property, but it seems those things are not valued in Birmingham. “

He added: “The site is run down, service charges have gone up and there is less money spent on the site than ever before – and now they say it’s worth almost £ 1million? incredible.”

Local activist, Liberal Democrat Izzy Knowles, supported the traders.

She said she thought they had presented a compelling case – and that she was disappointed the board failed to consider the “community value” of a community buyout.

The leader of the Lib Dem group on the board, Cllr Jon Hunt, added: “The board needs to look at its relationship with small businesses in the city. The treatment of this innovative business cooperative is too typical.

A monitoring survey of the council’s work with small businesses will take place in the new year.

The co-op intends to submit another offer and request another meeting with Cllr Ward to discuss their future.

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