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Mill Centre FAQ

Frequently asked questions regarding the Mill Centre in Blackburn

30 January
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1.    Who owns the Mill Centre and whose decision was it to close the centre?

G Dunbar & Sons (Builders) Limited Small Self Administered Retirement and Death Benefits Scheme own the majority of the Mill Centre and their trustees have made the commercial decision to close it as in their opinion it is not financially viable.  Scotmid own their supermarket and two adjacent shops and the council own the adjoining car park which serves the both the Mill Centre and the new partnership centre. 

2.         What is the council's involvement?

West Lothian Council bought the previous shopping centre in Blackburn and transferred ownership to the George Dunbar trustees for nil consideration.  The Trustees, in part, provided their own capital towards the re-development. In addition European Funding was secured by the council to fund the re-development and make it a viable project. 

To secure the Mill Centre's redevelopment in 1999 and the private sector investment from the trustees, West Lothian Council agreed to give a guaranteed income to George Dunbar trustees for the first 20 years, occupying part of the centre and granting occupational sub-leases to retailers for the remainder. 

The council has now fulfilled our obligation under the terms of the 20 year lease and the Council Executive voted in June 2018 not to renew this head-lease when it expires in February 2020. 

3.         Why is the council not renewing the lease?

West Lothian Council has met its obligation to give a guaranteed income to the trustees for the first 20 years of the Mill Centre. The council incurs an operating loss of over £55,000 per year and, taking into account the very challenging financial position facing the council, is not able to subsidise this any further.

West Lothian Council facing an estimated budget gap of £65 million up to 2022/23, so savings must be found to protect essential services such as those for West Lothian's growing young and older people.

4.         What loss has the council and George Dunbar trustees made on the Mill Centre?

In the last three financial years, the council has made an operating loss on the centre of £194,286. It is estimated that the combined loss for the council over the past 18 years is £1.2 million.

Under the current scheme, the council pays a rent of £136,000 per annum to George Dunbar trustees and incurs additional costs of £98,000 per annum for shared costs such as security costs, repair & maintenance, CCTV, lighting and cleaning. This cost of £234,000 per year is partially offset through income from the under tenants who occupy the retail units in the centre.  

The council has paid approximately £2.4 million in rent to George Dunbar trustees over the last 20 years, which should have fully recovered the costs they incurred for developing the Mill Centre back in 1999.

5.         Could the cost to the council of running the Mill Centre be reduced?

West Lothian Council has made considerable efforts to reduce the expenditure associated with the Mill Centre.

Rent to George Dunbar trustees is the main expenditure. An expensive arbitration process had to be used to agree a revised rent for the two rent reviews, as the trustees' rent  growth expectations were in excess of the council's.

The other main expense is security guarding. This was reviewed, but is not possible to reduce the hours due to levels of anti-social behavior.

Other options such as increasing rent or recovering service costs from tenants were considered but could have led to business closing or leaving the centre, which would have affected the viability of the shopping centre.

6.         What about council and community services for the Blackburn community?

The recently opened £8 million Blackburn Partnership Centre offers council, community and health services under one roof. The new centre was required as both the previous health centre and community centre were reaching the end of their working life.

Since the council made a commitment to the community to build Blackburn Partnership Centre (BPC), there has been dialogue with the George Dunbar trustees on the design of the BPC and its relationship with the Mill Centre. 

At a very early stage, the trustees were advised the BPC would not, like other partnership centres, include a café or pharmacy in order to preserve the viability of Mill Centre and the location supports the Mill Centre by generating more visitors to the area. 

Officers also advised Dunbar trustees' representatives from 2013 that they would advise councillors against extending the lease of Mill Centre beyond 2020. This was repeated on various occasions at meetings including those in 2017 and 2018.

7.         Why doesn't the council buy the Mill Centre?

We do not have the funds available as capital funds have already been allocated for essential assets such as schools, roads, lighting etc. In addition, the council does not have any operational need for the Mill Centre. 

West Lothian Council facing an estimated budget gap of £65 million up to 2022/23, so savings must be found to protect essential services such as those for West Lothian's growing young and older people.

8.         Why does the council not reduce the business rates it charges in the Mill Centre?

West Lothian Council only collects business rates on behalf of the Scottish Government and does not have the ability to set or change their level. Under legislation, the rateable value is determined the Assessor for Lothian.  

9.         Is the Mill Centre financially viable?

West Lothian Council believes that the centre could be viable to a commercial operator, with the additional footfall generated in the town centre by Blackburn Partnership Centre creating additional opportunities for business in the village.

The Mill Centre currently generates around £173,000 of income per year.

10.       What about the tenants in the Mill Centre?

West Lothian Council will continue to positively engage with the tenants while requiring them to comply with their lease obligations.

11.       What is the future of the Mill Centre site?

The Mill Centre site is owned by George Dunbar trustees, so this would be a decision for them.

The site is currently zoned as a local neighbourhood centre, which is defined as the heart of communities, providing a focus for economic activity and growth, a sustainable and accessible location for employment and services, and a night time economy and an expression of civic identity and pride. 

Any proposed change of use would need to be considered through the planning process and have regard to this.

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