ET TRADERS at historic Paddy's Market in Glasgow will soon be told they have to move out.
In March, the Evening Times revealed the rundown market, which has become crime ridden, is to be closed and the area transformed.
The arches in Shipbank Lane where Paddy's operates belong to Network Rail which gets £130,000 a year in rent from traders.
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Item 16
Purpose of Report:
To advise the Committee of outline terms and conditions agreed for the lease of the property at
Shipbank Lane (Paddy’s Market)
Recommendation:
That the Committee
• approves the lease terms proposed for Shipbank Lane, as proposed in the report;
• authorises the Executive Director of DRS to sub-let the property to
businesses and organisations, as allowed for within the lease.
1. BACKGROUND
1.1 On 20 March 2008 the Executive Committee considered a report which detailed a range of
issues relating to the operation of the market in Shipbank Lane (commonly known as
Paddy’s Market, and authorised the Director of DRS to negotiate with the property owners
(Network Rail) to take a lease on the property.
2. HISTORY
2.1 The railway arches at Shipbank Lane (Paddy’s Market) are owned by Network Rail. The
properties are currently leased to a range of individuals and businesses on an annual
basis. Network rail receives approximately £130,000pa exclusive of VAT in rental income.
2.2 The development and regeneration of this area of the City is gathering momentum with :
• the St Enoch Centre redevelopment/expansion underway
• the Customhouse Quay Gardens proposals being advanced
• proposals being developed by 2 separate developers for commercial/residential
developments in areas adjacent to the Briggait,
• the WASPS Trust redevelopment of the Briggait about to commence.
• Network Rail considering their longer term proposals for the development of their
property holdings in this area.
2.3 By taking on a lease of the subjects, with vacant possession, it is anticipated that the
Council can positively raise the profile of the area over the next 5 years by using the
subjects for a range of uses including operational requirements, the possible operation of a
new street market under the management of the City Markets LLP, and an Arts related
development to complement the proposals for the Briggait and the Visual Arts Strategy
development at King Street.
2.4 The Board of the City Markets LLP have already instructed their Markets Manager to bring
forward a proposal on how City markets could sub-let the property from the Council and
manage them as part do their own markets business.
3. PRESENT POSITION
3.1 Negotiations with Network Rail have been completed and outline terms and conditions
agreed in principle for the lease of the subjects as detailed below. Network Rail has
agreed to a reduction in rent in order to allow the Council to take over the arches on a
vacant possession basis and thereafter control the type of tenant and use that is permitted
within the arches area. This will give the Council full control over the area, leading to the
potential generation of new income and a reduction in operational costs. In 2006/07 for
example the Council incurred costs of £110,000 (cleansing costs of £80,000 and trading
standards costs of £30,000); Strathclyde Police incurred costs of £95,000, HM Customs
and Excise incurred costs of £42,000, and FACT (Federation Against Copyright Theft)
incurred costs of £30,000.
L:\Cmtserv\EXECUTIVE\MEETINGS\2008\12 September\Item 16.doc
4. PRINCIPAL TERMS AND CONDITIONS
1. The subjects of let to comprise the 14 railway arches at 2 to 28 Shipbank Lane, the 8
railway arches at 2 to 28 Bridgegate and the solum of Shipbank Lane (as shown on
the enclosed plan).
2. The lease shall be for the period of 5 years from the date of entry.
3. The rent shall be One Hundred Thousand pounds (£100,000) sterling per annum
exclusive of VAT.
4. The tenant will be entitled to sub-let the premises in whole or in part without the prior
consent of the landlord subject to the use of the sub-let premises being within the
scope of term 5 above.
5. Other standard terms and conditions generally applicable to a lease of this nature.
5. SERVICE IMPLICATIONS
Financial: Rent of £100,000pa to be paid by the Council. This will be offset by
sub-rentals. Council will also save on costs identified in para 3.1.
Legal: Lease to Council to be formalised.
Personnel: N/A
Service Plan: Improving the environment of the Shipbank Lane (Paddy’s Market) area
contributes to the aims of Service Priority 6.2, the City Centre Action
Plan. Proposal also supports the objectives of the Merchant City Action
Plan.
Environmental: None