Thanet council is expected to agree a 125 year lease on a peppercorn rent for East Kent Colleges Group’s digital and education campus with studios, gallery, café and workshops at the former Marks and Spencer building in Margate High Street,
The Margate Digital scheme is funded with £6.3 million from the governments Levelling Up Fund and £720,000 plus an additional further education budget for programme delivery and student support from EKC.
In 2022 the M&S building, owned in a joint venture between Thanet council and Homes England, was initially agreed to be let to EKC Group on a 10-year, nil rent lease.
But the project hit a snag when shortly after the lease agreement was made the Office for National Statistics (‘ONS’) reclassified further education corporations and sixth form colleges as public sector bodies, forming part of central government.
One part of that change meant colleges could only make capital investment in an asset owned by them in freehold or on a long lease. The Department for Education expects a long-term lease to be 125+ years at a peppercorn or nominal rental.
The new proposal for the 125-year, fully repairing and insuring lease means East Kent College Group can invest in the Margate Digital scheme.
The lease would allow for the use of the property for education and ancillary purposes only. A sublet would be allowed within the property, with approval from the council, and for organisations that fit with the education terms of the planning approval.
The Margate Digital project will include 2,000 sq m of industry-relevant training space which will focus on digital technology.
It will be primarily aimed at 16- to 19-year-olds and the campus will offer a range of qualifications including T Levels, HNDs and HNCs..
Thanet council documents say that EKC Group’s business plan shows an 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.
A report to Cabinet members says: “The 20-year projections are based upon an initial intake of 90 students, rising to an estimated capacity of 220 students by year eight. Income for the campus is provided by way of fee income from a variety of courses including adult learning courses.
“The anticipated revenue also includes operating and service charge contributions from leasing out space within the building. Negotiations are taking place on the type of operation that could happen within the building to support the campus.”
Thanet council would not receive any monies from sale of the building – which has been projected to have a capital value of £390,000, because although the legal title for the property is in the name of Thanet council, Homes England has the benefit of a restriction on title.
The Margate M&S has been shut for some 17 years. The building freehold was bought in 2006 by Thanet council for £4.5 million with grant funding from SEEDA (now Homes England). It has since been used by Turner Contemporary and then Store 21 until its closure in 2017.
In 2021 £750,000 from the Towns Fund from the Ministry for Housing, Communities and Local Government was spent on removing asbestos and renovations to the roof of the building.
A report to Cabinet members says: “The only alternatives are to either give the funding back to central government, or for the council to deliver the Margate Digital campus themselves.
“There are currently no other Further Education or Universities in Thanet that could add a new campus to their provision. The council is not in the position to deliver an education campus, and therefore the only option is to provide East Kent Colleges Group with a lease in order that they can deliver the scheme they put forward for the Levelling Up Fund programme, which was awarded the grant funding.”
The Levelling Up funding for the Margate Digital project must be spent by March 2026.
The lease is expected to be agreed by Thanet council Cabinet members at a meeting on February 29.
