The Margate School says it has been forced to halt its involvement in a multi-million pound project with EKC Group and Thanet council over demands for rent and capital funding.
TMS partnered with the college group and council in a successful £6.3million bid to the government’s Levelling Up Fund to create a digital and education campus with studios, gallery, ‘Fablab’ café and workshops at the former M&S building in Margate.
The Margate Digital project, which now has delayed its expected opening date until September 2024, will include 2,000 sq m of industry-relevant training space which will focus on digital technology. TMS was due to take 500 sq m of this space to offer postgraduate and professional development provision together with expanded Fabrication Laboratory (FabLab) facilities.
The bid involved using £6,306,078 Levelling Up funding with EKC Group ‘match-funding’ £720,000 plus an additional further education budget for programme delivery and student support.
The M&S building, owned in a joint venture between Thanet council and Homes England, is to be let to EKC Group on a 10-year, nil rent lease.
But TMS director Uwe Derksen says the School is now being told to pay £30,000pa rent and provide a significant capital sum. He says the initial agreement did not involve a financial input and TMS was to provide its reputation, network and facilities and to bring in new courses, mentors, apprenticeships and start-up hubs as well as the expansion of the FabLab.
He said: “At the moment we have been forced to halt our involvement as the conditions of our agreed participation as per the funding bid have significantly changed.
“From partner we have now become a potential tenant with rent liabilities and also a new added condition of having to raise our own capital funding. Unless we are reinstated as partner we are simply in no position to participate.”
Mr Derksen says the current situation has also had an impact on The Margate School because the business plan and a loan had been partially based on the Margate Digital venture and funds had also been spent on a design consultant for the space in the M&S building.
He says once the Levelling Up money was granted TMS was relegated to a back seat, not invited to meetings and had to repeatedly email partners to get sight of the submitted bid.
He added: “The upshot is that there is a demand for rent and capital funds that was not in the bid. EKC now has the repair lease but say they need someone in there paying rent and that we need to bring our own capital funding, which I think is maybe £1m.
“They knew we were not in a position to do this and it seems we are now an inconvenience.
“We can’t do anything about it but it feels like a landlord putting up the rent to get rid of an unwanted tenant.”
The Margate School is now concentrating on its bid to prevent closure of its activities at the former Woolworths building in the High Street. The School must raise some £50,000 to continue running.
In a joint statement Thanet council and EKC Group say the government funding only covers capital costs so ‘any third party’ at the site must fund works for their own space.
They add that service charges, maintenance and management has to be paid for by EKC and the aim is to recover some of that cost through leasing space in the building.
Thanet council documents say that EKC Group’s business plan shows the eventual growth in student numbers will mean the project will start to break even by year eight or nine and they will be able to reinvest by year 10.
To support the project the nil rent lease was agreed and includes the ability for EKC “to sublet to provide a rental income to support the costs of running and maintaining the building.”
The later opening date, understood to be around 12 months behind original estimates, has been blamed on delays in finishing building works.
The joint statement says: “The Margate Digital project bid was developed by EKC Group in engagement with The Margate School (TMS), with Thanet District Council responsible for submitting the bid to government.
“By taking part in the Margate Digital project, The Margate School would be adding to their existing portfolio of activity in Margate.
“The Levelling Up Funds (LUF) must be used to pay for capital works in order to repurpose the building. EKC Group is providing significant match funding in the form of the fit-out of their parts of the building i.e. the interior spaces including electricals, heating, decoration and furnishings that will make it suitable for use.
“Because the LUF only covers the delivery of capital works, any third-party that takes a space within the building must also fund the fit-out of that space. Levelling Up funding cannot be used for equipment or other completion of internal spaces.
“The cost of ongoing service charges, and management and maintenance of the building is also EKC Group’s responsibility. As a public sector organisation, EKC Group doesn’t have funding in place to cover all of these costs and has therefore sought to recover a proportion of them through prospective lease arrangements for parts of the building.
“Since the bid was submitted, the economic environment has seen ongoing increases in inflation and the cost of living, and rising insurance premiums. Recent changes to the classification of Further Education Colleges by the Department for Education also have an impact. As a result the sums needed to cover these costs have increased.
“The council is engaged with central government, and is highlighting the challenges of increasing inflation and its impact on the cost of living and materials. The aim is to identify and mitigate the risks being posed to the project.
“Due to delays to the completion of building works, the proposed opening date for Margate Digital is likely to change. EKC Group proposes that the first cohort of students will now commence in September 2024. If completed earlier, the building may be used for other related activities.”
The LUF funding for the project must be spent by March 2025. When open Margate Digital is expected to cater for around 300 students.
Do they plan to widen the pavement so much that cars would struggle to get through, or is that top image just some architect’s fantasy?
Peter I am glad you highlighted this as disabled and going around we have been fighting to end parking on the already narrow pavements reading up to KFC with lack of inforcement especially at the evening time liberties with drivers are rife the part in front of the building so far is not been taken up by irresponsible drivers like drivers from Uber and other companies ignoring rules at KFC.
They need to put concrete posts there.
Where would you park if you were a delivery driver in the evening the Brian?
The Emperor’s New Clothes strikes again.
Is this the same margate school that’s already to raise 50k ?
As Bazza pointed out in the comments under the article about the fundraiser, the property went on the market recently. The details here: https://www.rightmove.co.uk/properties/130614257#/ show that the current lease expires in June. So the proposed rent increase can’t have come as a surprise.
£6m of government funding, 10 years to break even, project overrunning already before any work has even been done, East Kent College Group having to make staff redundant due to financial issues, junior partners being treated like dirt.
This has all the signs of one almighty white elephant already. Let’s hope the TDC taxpayers don’t get drawn into subsidising this any more.
Yes. Another stink!
What a complete mess. The common theme being the Margate School and its expectation that everything can run on funding or crowd funding. It would seem those ‘gravy-trains’ are a thing of the past and big money is needed to back these projects, not the promise of never ending funding.
I am confused do margate school still want to raise money for the school or has the school pulled out ?
What is going on ? the school what’s 50k but is now pulling out of said building. So does the school still want money or not.
Two different projects. TMS is raising money to stay where it is. Then there is the levelling Up scheme headed by EKC for Margate Digital. TMS was invited to be a partner when the bid for that 6.3m grant went to government and was approved. TMS say they are now being asked for money to be part of Margate Digital that was not mentioned before
Confused – this is a different project to the one in the Woolworths building that The Margate School are trying to raise £50k for to keep afloat. The one in the Woolworths building is their fine art school whereas this new one is currently under construction in the old M&S building. They’re still running the fundraiser to keep their Woolworth’s school open. Sounds like they’ve got their fingers in too many pies and not much to substantiate their involvement.
Oh so the school is trying to run two schools and cant afford to run any of them
If you read the article.. a big part of the current TMS financial situation is *because* of the Margate Digital situation.
You could read it that way, but that explanation seems to me more like an excuse for the situation they find themselves in.
But surely when the Grant’s etc were awarded to margate school their business plan would have to been checked. You cant just dish out our taxes without the business plan being approved.
Who approved the business plan ? Who ever it was seems to have cocked up.
Pull the plug on both the School and the Digital lab project and save us tax payers six million!
For a start, where is the parking for both projects, students can’t afford £1.50 an hour to park!
I’m surprised that students can afford a car.
And have what in the spaces Art School Fools? Empty shells for another decade?
So, you don’t believe all the hype about Art reviving Margate High Street then? Nor do I, but I do know that having any art/creative spaces in a High Street will (has!) make people even less likely to walk down there to investigate the shops.
Perhaps we should look at other Kent towns, and ask why most of their Woolworths have become other shops while Margate’s remained empty (best of all is the one in Faversham, which simply became a Woolworths-type shop, and is extremely popular).
Common sense departure by TMS.
Why wasn’t the capital and lease figures fixed in contract terms? TMS could then sue for any costs incurred if the goalposts move.
One would rather have liked to see the Partnership Agreement – at the second Reinvention Symposium last year the EKC Project Manager and the TMS Director appeared to be partners and of course EKC piggy backed on TMS’s established enterprise to secure that £6+ millions (this on top of the £750K TDC acquired for refurbishing without consulting the Town Deal Board – supposedly that initial input was for Town Deal projects to be completed in the financial year. Not much sign of educational inauguration for this September ? Torpor or turpitude ??) In the meantime we are in danger of losing a creative enterprise in being. Might as well demolish the High Street – what will the revised Local Plan have to say ?
So Tms were expecting to gain some 500m2 of newly refurbished space for nothing other than the reputational gravitas they bring to the table? An organisation that has just 25 students after having operated for a number of years and is currently seeking funding. The digital hub was said to be for 300 students, so is it really feasible to think that TMS is going to find roughly another 75 students?
On top of that, the likely year long delay ( in itself odd seing as its even longer than the time left to the intended opening, so how long has it been known that the timescales were not going to be met) which in itself will raise costs considera bly aside from inflationary increases that would have been seen any way.
Another colossaly expensive thanet herd of white elephants is gathering in a town with no money at the best of times. Can someone not be found to look at this from a independent viewpoint and rationally decide if it has any prospect of succeeding. Who funds it’s losses up to the point it breaks even 10 years after opening , and how realistic is that outcome given it wants more money and is going to be at least a year late already.
Agree with this.
The other thing worth bearing in mind is that the East Kent College Group got more government funding a couple of years ago to open a flagship student training restaurant in Folkestone.
This closed less than a year later as it couldn’t make enough money to stay afloat.
We simply can’t afford for these same mistakes to be made in Margate with this level of government funding on the table.
A year delay to opening this early in the project and partners saying agreements don’t reflect pre-grant application discussions is very worrying indeed.
The Restaurant was one of many affected by loss of revenue following COVID, it still exists although mothballed and if the market recovers significantly no doubt would reopen, as it sits on Folkestone College ground it is unlikely to be sold and following the opening of the new main College building need to be redeveloped.
Sadly, many restaurants have been affected by COVID and have had to close their doors.
In this case, it happened less than a year after a bunch of government funding was received to create it which isn’t the best use of taxpayers money.
Presumably the bosses at East Kent College knew about COVID and the potential to disrupt the hospitality sector when they decided to open it ?
Imagine if EKC Group had expected to walk in and find a fully refurbished purpose built interior ready for them to use? instead they are stumping up the cash, in difficult times following the reclassification of College & 6th Forms that bring them back under Government policies regarding debt and borrowing, and then, according to the report, taking on the repairing lease for the building for a decade! TMS, like EKC, need to ensure they have funsing in place and pay their share.
EKCG seemingly used the good international reputation of Mr Derksen and the Margate School gallery to push their bid then having got the monies awarded decided to jettison the TMS.
With this cut-throat behaviour can EKCG be trusted in anyway whatsoever?
I think not.
In my opinion the teaching and learning is what is important. Projects like this could start to deliver straight away. It would be hard work and need flexibility and creativity but this current approach is unaffordable.
Sharon.. from what I know that is pretty much what happened at the inception of the Margate School in the Woolworths building. The initial tranche of students were clearly there on the reputation of its staff, not on the basis of a modern structure with existing properly equipped studios, etc..
The digital project seems to be costing a lot per student.
Yes, I think you are right about the Margate school
They are making good use of available resources and giving back to their community
If we are not careful it will be years before students benefit from this digital project . Margate needs this sooner rather than later.
In the architects drawing I feel it is simply offensive to act as if the digital project does not have vital , successful neighbours!