A COUNCIL will underwrite a fee needed for a £244,000 grant to renovate a dilapidated building which will be worth £125,000 once the work is complete.
The vacant building at 95/95a Broad Street, Blaenavon has previously been home to a guitar shop and bookies and is currently valued at only £50,000 and is described as a “prominent property in a poor state of repair”.
Torfaen Borough Council has approved using £244,711.52 from the Welsh Government’s Transforming Towns fund so its private owner can completely renovate the building. Officials who sit on the Transforming Towns Placemaking Programme Board said approving the grant would allow the building to be brought “back into beneficial occupation” with its owner not having sufficent funds to do so.
The renovation will see the ground floor refurbished to accommodate two commercial units for new businesses and the conversion of the redundant upper floor to a one-bedroom flat which will meet Welsh quality standards.
But the council’s cabinet member for finance Sue Morgan will have to approve the council underwriting a £69,711.52 shortfall in the security, or legal charge, required which is equal to the grant amount.
The building’s owner has also provided a further freehold property in order to secure the legal charge, however, this was only valued at £50,000, giving a combined value of both properties of £175,000 on which to place the five-year legal charge.
As a condition of the grant there will be a five year legal restriction on the sale of the property.
A report for Cllr Morgan, who is being recommended to approve the spending when she considers the proposal on Wednesday, April 12, states “the applicant has no intention of disposing of the property” but warns the Welsh Government will claw back all or some of the grant if the “small risk should arise”.
Though that would see the council lose the money it could put up as security the report backs the proposal and states: “This could put at risk the security of £69,711.52, however on balance the risk of this is considered to be so low that it is outweighed by the need for investment.”
The Welsh Government has said the decision on whether to take the risk is for the council and officials say if the renovation isn’t completed the authority could find itself having to foot the cost for making the building, which is within the Blaenavon Conservation Area and the UNESCO Blaenavon Industrial Landscape World Heritage Site, safe.
The area is also considered a “key gateway” to the town where the council is seeking to boost footfall and build on the town’s internationally recognised UNESCO status.
The report states: “Should the grant not be forthcoming the council will need to consider taking enforcement action and making safe a structurally unsound building which would result in a significant financial cost to the council. If the property is left to fall into a further state of disrepair, opportunities of securing future grant funding investment will be unlikely.”
The Welsh Government still has to approve the use of the grant and the unsecured £69,711.52 will need to be guaranteed for five years within the council’s communities reserve budget to satisfy the terms and conditions of grant.
