City centre traders: We're being driven out

RETAILERS fear Glasgow's oldest street could become a series of empty shops.

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Traders say High Street is becoming a “graveyard of businesses”

The Evening Times can reveal worried traders in High Street have set up an association to defend themselves from their own landlord amid concerns that rent increases and tough new lease conditions are driving them out of businesses.

Dan Taylor is about to open a cafe just off High Street – in two shops rented from City Property, the arm's-length external organisation set up to run what used to be the council's portfolio of commercial premises.

He said: "Every month, the area where my cafe – McCune Smith – is located grows more and more like a graveyard of small businesses, with 'To Let' signs acting like headstones."

Mr Taylor is a member of the High Street Merchants' Association, a body set up to represent tenants of City Property.

The 35-year-old cites one long-established business that faces closure after new lease terms were imposed by City Property.

The retailer, which asked not to be named, has been told it must make tens of thousands of pounds of repairs to the property to secure a new lease.

Mr Taylor said: "If they sign their lease they will be liable for extensive repairs and if they don't they will lose their business.

"What the council should be doing is working with the shop to fix the problems for the benefit of everyone concerned.

"Instead, what the council is going to do is put it out of business."

Several business spoken to by the Evening Times declined to be named on the record but cited problems with rent rises, distant and unapproachable officials at City Property and delays dealing with paperwork.

Tenants are also deeply unhappy with the state of the buildings they rent, many of which are old and have suffered decades of under-investment.

Nina Baker, the Green Party councillor for the city centre, has long championed small retailers in the area and chaired the first meeting of the High Street Merchants' Association at Mr Taylor's cafe premises.

She said: "Neither the council nor City Property is doing anything to support small enterprises.

"The result is we are seeing small retailers put out of business or teetering on the edge of an abyss.

"People have agreed to the rents they paid when they first took their leases – whatever they were. But it is understandable that businesses will complain if their rents are put up by 50%-70%."

City Property is part of Glasgow City Council's group of arm's-length external organisations set up late last decade.

In 2010 City Property bought the council's portfolio of 2000 commercial premises, including shops in High Street, for £120m.

The local authority used this money to fund a round of early retirements currently under investigation by Audit Scotland, Scotland's public sector spending watchdog.

City Property was only able to pay for the investment portfolio by mortgaging all the assets.

Now it raises more than £15m a year in rent, most of which goes to pay off the mortgages.

However, City Property does not manage its assets directly. In 2010 – after a public tender – it hired agents Ryden to do the job. Most of the "To Let" signs are, therefore, from Ryden.

Mr Taylor believes Glasgow is getting its shopping strategy badly wrong.

For the last 30 years the city has refocused its centre to shopping and leisure – and continues to do so despite the marked downturn in retail spending.

It is investing £85m in a controversial expansion of Buchanan Galleries, and associated public realm work, including the aborted £15m scheme to revamp George Square.

Mr Taylor said: "Glasgow's attitude to retail is top down rather than bottom up. It has spent a fortune on huge developments in Buchanan Street to encourage big chains stores that, in themselves, put a strain on small business.

"Right now, investment in Glasgow is overwhelmingly aimed at big retail outlets that sell the same stock wherever they are in the country or online.

"But I believe small business stands a far greater chance of revitalising ailing city centres that have lost out to the internet and out-of-town shopping."

City Property insisted it had every right to review rents in line with market conditions – and insisted it could cut costs for its tenants, especially if they made investments in their property.

A spokesman said: "There is the possibility the process results in rents going up or down depending on the terms of the lease and the market evidence.

"We lease commercial property on full repairing terms and this has always been the case. This means the tenant is responsible for external and internal repairs to a property.

"It is standard practice in rent review negotiations to discount improvements undertaken by tenants and we are of the view it would be unreasonable for a landlord to benefit from a rental increase as a direct result of a tenant's investment to a property. Again, this is standard practice for rent reviews involving commercial premises."

david.leask@ heraldandtimes.co.uk

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