Traders in Brighton Open Market have have lost confidence in the Ethical Property Company.
Traders in Brighton Open Market have revealed that they have lost confidence in the Ethical Property Company to manage what was one of the most exciting developments in the city when it opened in July last year.
They have decided they would prefer to terminate the company's management contract and run the market for themselves. They also want to know how up to £200,000-a-year in management fees and charges has been spent.
The disclosure was revealed to Brighton and Hove Independent on Thursday as councillors prepared to consider a loan of £61,000 after the company blamed business rates and low take-up of temporary stalls for a failure to balance the books of the market.
In a leaked email - sent to leading councillors - three members of the controlling Brighton Open Market Community Interest Company (CIC) said traders had voted overwhelmingly against a council loan and said they are "very keen for the CIC to work with the council to add Brighton Open Market to the growing list of tourist attractions and local shopping facilities to suit all demographics, looking at any marketing opportunities that may be available".
Of 39 traders - three of the 42 units are currently unoccupied - 27 voted against borrowing any money. Three voted in favour; four abstained; and five did not return ballot papers.
Separately, they have called for a "forensic audit" of how Ethical Property Company has spent the money they have received as contractors. Several traders complained the company - as a property management company - was not fit to manage the open market and had refused requests for greater transparency. One said: "We asked to see the accounts and they refused - and then they said we could see what accounts that their accountants would prepare, provided we pay them £1,000."
When it opened, the community-led regeneration scheme aimed at breathing new life into the London Road area. It included in a £20 million investment by The Hyde Group and the city council, with a mixed-use scheme that included 87 affordable homes, 45 permanent market stalls, and 12 workshops for artists and designers.
The shopping scheme is run as a social enterprise, creating around 100 full-time jobs while also supporting local and regional suppliers and producers. It was hoped it would also act as a meeting place for the local community and a must-visit shopping destination for day-trippers and tourists.
Despite the much-publicised fanfare around its opening, traders have complained that management has been costly and poor; they have also questioned what Ethical Property Company has done to justify its management fees, part of a three-year contract that was extended by another years.
A report to yesterday's policy and resources committee stated: “When the market opened the CIC did not have sufficient cashflow to support start-up costs and the initial two-year period of establishing the business and moving into profit.
“Ethical Property Company offered initial financial support by way of a deferred repayment loan to cover these early years.
“While there has been good take up of permanent market stalls, higher-than-predicted business rates and lower-than-expected take-up of temporary stalls within the market square have combined to delay the market moving into profit and a further two to three year period is forecast to be required.”