Millions could be spent creating new flats in Bognor Regis Arcade

The council bought the Arcade in 2017 for investment and regeneration but, while new life has been brought to the shops on the ground floor, the rest of the building has remained derelict and largely unused.

During a meeting of the economy committee on Tuesday (June 13) members supported the idea of borrowing £7,362,747 to pay for the work to build 35 rented flats.

A bid for a grant from the government has already been made in the hope of securing the remaining £628,322.

Other options explored by officers were to sell the whole Arcade – but it was felt unlikely that the council would recoup the £1.9m paid for the building.

Developing it for social housing was also given the thumbs-down as the housing team advised officers that such a scheme would not be able to provide the housing types needed.

Leaving the upper floors derelict was the final option and would lead to high maintenance costs as well as denting the council’s reputation for leaving such an asset in a poor state of repair.

Dr James Walsh (Lib Dem, Brookfield) said the council had been ‘saddled with a millstone around its neck’ when it bought the Arcade.

But he acknowledged that doing nothing with the site was not an option and said they had to ‘get to grips with what was a wrong decision and find a way out of it’.

A report to the committee said borrowing the money to build the flats would cost the council more than £420,000 per year.

Even after taking account of an estimated £362,000 in rental income, there would still be a deficit of £28,646 per year to be found.

Explaining why building the flats was the best thing to do, regeneration consultant Neil Taylor told the meeting that the council was paying more than £29,000 per year in rates for the upper floors as well as ongoing maintenance costs.

And there was a £180,000 budget for roof repairs which had yet to be spent.

Mr Taylor said: “One you look above the vibrant retail on the ground floor it looks quite grim.”