Thanet council Cabinet members took just six minutes tonight (August 1) to agree the sale of the freehold for the entire Dreamland site -including the council car park and cinema building – to operaters Sands Heritage Limited.
The sale is subject to agreement from external funders regarding the removal of ongoing grant obligations upon the council, and subject to legal advice.
The sale will include the full complex, rides and the TDC restored cinema and Sunshine Café building, containing the ‘Dreamland Bars’, later famous for being the ‘Bali Hai’.
It will include a restriction prohibiting housing development at the site for 10 years to tackle any possible planning application for development outside of leisure uses.
10 year development restriction
Following a question from Labour councillor Rob Yates about why the restriction is limited to 10 years, council leader Bob Bayford said it was “only a proposal.”
He added: “It is taking a realistic view of what you can impose over and above the normal restrictions on it in planning designations.”
A report to councillors says SHL has stated that it has no plans to develop housing and that it also plans to enter an agreement with the National Lottery Heritage Fund – which provided grant money for the original reopening in 2015 – to maintain the heritage aspects of the park.
Cllr Bayford said the negotiations with the lottery fund was “still a work in progress.”
The council has owned Dreamland since September 2013 following a successful Compulsory Purchase Order against Margate Town Centre Regeneration -later renamed DreamlandLive- which had proposed an amusement park with up to 500 homes at the site.
The CPO was served in June 2011 but a lengthy court battle followed when the then-land owners lodged an appeal which was dismissed by the High Court in May 2013.
However, compensation for the land is yet to be paid and will likely come from the proceeds of the sell-off to SHL, Council documents say the CPO compensation amount will be based on a date applicable at the time of the CPO, not the current valuation.
Councillor George Rusiecki asked at tonight’s meeting whether Crichel Down rules would apply – meaning would here be an obligation if selling to offer the site to the previous owner first.
Cllr Bayford said: “We have taken legal advice and are happy the rules would not apply in this particular case.”
How much money will have to be paid in compensation to the former owners has not been revealed.
The report to councillors says: “Even if there is a risk that a CPO valuation starting point is today’s value, to arrive at the 2012 value, very substantial deductions would apply because of the many millions of pounds spent on the site in the intervening years.”
However, it is also noted there is a risk the council may not achieve the market value of the site although the report adds: “The market value of the site will be established by an up-to-date, independent valuation. The disposal will not take place unless this valuation is equalled or exceeded.”
Just one valuation has been received due, said Cllr Bayford, to the specialised nature of the Dreamland site.
The park initially reopened, with Sands Heritage at the helm, in 2015 following £19.4 million funding from the Department for Culture Media and Sport’s Sea Change programme, the Heritage Lottery Fund and Thanet District Council.
It went into administration in May 2016 after SHL suffered financial difficulty at the end of 2015 and entered a voluntary debt plan. The company had been hit with a net loss of £5 million and owed bills of £2,893,128.
Arrowgrass bought SHL, secured payment of debts to bring the park out of administration and invested some £25million in re-landscaping, vintage rides restoration and the introduction of contemporary street food, eclectic bars, and a main stage.
The cash was secured by placing legal charges on SHL’s 99 year lease of the Dreamland site, and by placing charges on other, non-TDC, properties leased by SHL.
The properties include land at 43-47 Marine Terrace; land at 45-55 Eaton Road: Cinque Ports pub; Ziggy’s; fish and chip shop at 48 Marine Terrace and land at Dreamland amusement centre.
The firm, which owns Dreamland via holding company, Margate Estates Ltd, also has an option to purchase Arlington House.
The investment resulted in a second ‘reopening’ with a greater mix of music and events running alongside the amusement rides.
There has also been the addition of events such as Screamland, large scale gigs and child focused festivals.
The council report says the sale will mean a loss of income from the authority-run car park and a possible loss of a public amenity but adds: “The loss of car park revenue will need to be replaced. A freehold disposal typically generates a one-off capital receipt, rather than recurrent annual income. However, the receipt can be used to repay debt, and so the annual cost of debt repayments will be eliminated – which will offset the loss of income.”
The sale will include a restrictive covenant to guarantee the same number of public parking spaces in future as
Tonight’s meeting approved the agreement with SHL to sell the whole site, including rides and intellectual property subject to the legal advice and external funders.
The council says SHL has wide plans, including establishing the new seafront hotel and conference facilities, which would boost chances of the park continuing to thrive.
In April Dreamland CEO Eddie Kemsley told The Isle of Thanet News that the aim was to look at ways to increase the number of hotel beds in Margate and to hold more events out of the main season, creating a 12 month business and the permanent employment associated with that.
The authority also says a sale will remove authority costs for estate management, maintenance and repairs – and significantly reduce staffing resource dedicated to Dreamland.
The council’s corporate portfolio is under review to ensure the authority only retains assets that support corporate
priorities and deliver value for money. Dreamland “represents a current and potential liability to the council, with current and future costs which are unsustainable.”
Dreamland will celebrate its 100th anniversary next year. Dreamland’s Scenic Railway officially opened on July 3, 1920, and the park is planning a huge programme of events, installations and activities for 2020 to celebrate a century of good times down by the sea.
The park is now appealing to people of all ages to share their best memories – personal moments or ones passed down through their family – on a special Facebook group https://www.facebook.com/groups/1278359372327340/ . The group will stay open over the next 12 months for people to keep sharing moments and memories as the park builds up to its centenary celebrations.