Owners of a town centre lounge in Reading, providing working space for small businesses, say the Government’s Covid-19 measures have failed to support them.
The Curious Lounge at The Pinnacle in Tudor Road, close to Reading Station, was opened in November 2019 by Louize Clarke and her team.
It aims to be a mix of coffee shop and workspace and was ahead of its projections when lockdown began. However, it cannot get the rates relief benefits available to either.
The 5,400 sq ft lounge closed from March until early July but did not qualify as a hospitality venue so Covid business rates relief was not available and empty office rates relief was denied because the council said it was not empty enough.
Ms Clarke said all members’ subscriptions were cancelled overnight once lockdown began because no space could be offered.
She added: “We had been open five months, we were ahead of where we wanted to be, budget-wise, but lost every single penny (of income) overnight for four months and not many members have come back yet.
“We put a case to the council that we’d fallen through the cracks because we weren’t really an office, we are really a coffee shop so we should have been included in the hospitality relief. We’ve now put three cases in but they’ve turned every single one down. We’ve had no rates help at all.”
Ms Clarke said serviced office operators coped better in lockdown because many occupiers were tied into 12 or 18-month deals whereas the Curious Lounge works on a subscription system offering daily, weekly or monthly passes. Office providers are also able to claim small business rates relief through sub-dividing their spaces.
Ms Clarke said using the bounce back loans available to small firms would have been inappropriate.
She added: “We weren’t going to take a loan out to pay rates. That would just be irresponsible. We wouldn’t be able to pay it back so that’s not a route we wanted to go down.”
Business secretary Alok Sharma has told the team councils have discretion to assist firms which fell between the cracks but the council has refused to change its position. The lounge falls within Reading East and Ms Clarke said she has tried to contact Reading East MP Matt Rodda but has had no response.
A submission has now been made to the Valuation Office Agency with regards to change of use for the property.
Since re-opening, the Curious Lounge has operated on around 10 per cent of its previous number of users. Its meeting rooms, previously much in demand, are now little used because of social distancing requirements.
Desks in the lounge have been rearranged and temperature monitoring and extensive cleaning is carried out.
Events, previously running at a rate of three a week, are no longer possible so online events are being held to keep subscribers in contact. A survey of subscribers showed many did not wish to return until reliable track and trace or a vaccine was available.
Ms Clarke says the lounge is surviving month-by-month and the 12-month rates relief available to hospitality operators would have enabled them to at least ‘muddle through’.
She added: “The thing that really frustrates me is there is no mechanism to have a sensible conversation and have a proper appeals process.”
A spokesman for Reading Borough Council issued a statement to Thames Tap. It states: “For properties to qualify for retail relief the property should be wholly or mainly used for either retail, leisure or hospitality purposes and open to visiting members of the public.
“We considered the Curious Lounge’s request for this relief, whilst there is a café within the office complex, this cannot be considered the whole/main use of the property and therefore the relief was declined.
“Properties that are empty could also be entitled to empty rates relief if proof can be shown that the premises are completely empty.
“With regards to office buildings this would include the removal of all non-standard office equipment and the disconnection of broadband lines.
“We were unable to award empty property relief as it could not be demonstrated that the premises was completely empty. The Rating Law has not been amended as a result of Covid and therefore we have to treat office closures as occupied, unless rate payers can demonstrate complete departure.
“Whilst the authority was given a relatively small sum of discretionary funding to support businesses that were ineligible for the original grants schemes (Small Business Grant and Retail, Leisure & Hospitality Grant) , guidance from the Ministry of Housing, Communities and Local Government requested we prioritise four business types.
“Demand for the four business types alone outweighed the funding and therefore we could not extend our discretionary scheme past the four priority business types defined in the guidance, these being:
- Small businesses in shared offices or other flexible work spaces which do not have their own business rates assessment
- Bed & breakfasts which pay Council Tax instead of business rates
- Regular market traders who do not have their own business rates assessment
- Charitable businesses in receipt of Charitable Business Rates Relief, who would otherwise have been entitled to Small Business Rates Relief
“We were unable to award the Curious Lounge a discretionary grant as they did not fall into one of the four priority groups.”
Image shows the Curious Lounge with plants spaced out to allow for social distancing.
© Thames Tap No 225 (powered by ukpropertyforums.com).
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