I’m very grateful for the Journal’s coverage of my difficulties with the Land and Property Services and even though they have now deferred the case I feel that I have to follow up the story.
A number of issues have arisen as a result of the ‘‘Journal’s intervention and there remains core issues that have to be addressed.
From the very beginning of this saga I have been at pains to explain to the rates office that my unpaid rates were not as a result of an unwillingness to pay rates but due to an inability to pay rates .
As a result of the failure of Bookworm due to competition from Amazon, supermarket selling of books and a number of other factors I was left in a position where I could not pay the rates nor the payment on my commercial mortgage. Unfortunately for me two of my three other tenants ceased their tenancy.
WHY BANKRUPT BUSINESSES AT ALL
As OKT (O’Connor Kennedy Turtle) estate agents had valued the premises at £2.2 m and my total debts were less than £840k I felt comfortable that in the worst case scenario I would sell the property and clear my debts .
However even though the rates office had a charge against the property which would mean that after all secured debts were paid they would be first in line for payment once the property sold, the rates office decided to bankrupt me.
I was not alone , a whole legion of people were bankrupted by the rates office. Even though my debt to the bank was seven times as much as my debt to rates office it was the rates office that chose to take the bankruptcy option. Banks were reluctant to bankrupt people as the property market had collapsed.
The rates office as part of Government have a duty to look at the strategic impact of their actions.
THE DEGRADATION OF
BUSINESS IN CITY CENTRE
In the nightmare that followed over the six years since the bookshop collapsed I watched as more and more businesses were forced into closure and letting out commercial property became increasingly difficult . As commercial properties are still liable to rates even when empty ( a process introduced to stop developers sitting on empty properties waiting for prices to rise but now completely redundant) property owners were effectively forced to hand over their properties to charities rent free to avoid the rates burden on properties not bringing in a commercial return.
This has led to an explosion of charity shops which in turn has devalued the commercial value of surrounding sites. The reality of all of this is that each property handed over to charity not only undermines existing retail outlets but also ceases to be a rate paying property.
It would clearly be a much better system if property owners could rent out their property at a reduced rent and pay a percentage of the rent as rates.
BANKS PLAYING GAMES WITH TECHNICALITIES OF
In my own particular circumstance one of the difficulties with the rates office is that although I was bankrupted , the property was never taken off me ie nobody took ownership of the property.
Neither the trustees of bankruptcy nor my main secured creditor, ie the bank, actually took possession of the property in Bishop
Street. Despite the fact that I can’t rent, lease or sell the property it remains technically mine until such time as the fixed asset receiver sells the property.
In the eyes of the Land and Property Services they have to collect rates and so even if the banks have technically seized the property they avoid paying rates by using this process.
For the unfortunate property owners like myself this matter is compounded by the appointment of estate agents from Belfast who are happy to devalue Derry properties for a quick sale; their commission is unaffected by the price achieved.
The banks will take the first offer and come after you for the balance.
It’s bad enough to lose your business and what you hoped would be your pension but if they sell my property which had been valued at £2.2m for £400k they could come looking for the £150k shortfall.
DO WE WANT TO SEE A
RECOVERY IN OUR CITY?
Given the economic tsunami that has laid waste so many of our developers and business leaders it is crucial that we enable those with the courage and vision to rebuild our economic fortune.
Since the collapse of Bookworm I have been working with the Verbal Arts Centre to create a cafe on the City Walls that will help drive tourism on the Walls.
I have been working with the City Council to create a joint marketing hospitality initiative that will enable the hospitality sector to become the marketing drivers for Council assets such as the Tower Museum, The Guildhall, Railway Museum, Maritime Museum.
Most importantly I have been developing a website www.welcome-to-derry.com which is dedicated to making the advertising spend of local businesses become the marketing thrust of the city.
We cannot expect the City Council to continue to fund tourist initiatives on their own.
We need the private sector to step up to the plate and use sectoral marketing to market our food, accommodation, events, attractions etc.
The issue of rates has been on the agenda for a number of years now and we need our politicians to stop party politicing and get down to the real issue of governance.
Here are a number of suggestions that need serious consideration.
1.Consideration needs to be given about the effects of bankrupting businesses in rates default. If a charge against the property is put in place then the rates has a good chance of being paid.
2.Unless a secured creditor like a bank is going to take possession of a property it should not be able to prevent a commercial property owner enter into a short term lease to provide some repayment of the commercial loan while you wait for an upturn in the property market.
3.Commercial property owners should be able to opt for a process where they rent their property at a reduced short term let and pay a percentage of the rent in rates.
4.Council needs to consider the impact on local businesses of bringing in out of town , non-rate paying traders taking business out of the city.