TOWNANDCOUNTRYPLANNINGACT1990

ACQUISITIONOFLANDACT1981

INQUIRYINTO:

TheLondonBoroughofHaringey

(WardsCornerRegenerationProject)

CompulsoryPurchaseOrder2016

ProofofEvidenceof

GarySaunders

IndependentMarketExpert

onbehalfofHaringeyCouncil

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CONTENTS

Sections:

1. PersonalParticularsandProfessionalBackground

2. RoleandObjectivesfortheProof

3. ReviewoftheExistingMarketOperation

4. LicenceFees

5. Grainger’sObligationsunderthes.106AgreementandDDV

6. Considerationofthe2008“SevenSistersMarketReport”byUrban

SpaceManagement

7. ResponsetotheMarketTraders’StatementofCaseandtheWards

CornerCoalitionScheme

8. SummaryandConclusions

Appendices:

1) PhotographsofSevenSistersIndoorMarket

2) RepairsAssessmentSummaryReportbyCBRE

3) Calculationsfor“MakeDo”RefurbishmentOption

4) ImagesofNewMarketAreaEntranceandFrontage

5) ZonedFloorPlansforApexHouseandNewMarketArea

6) TablesofProjectedLicenceFeesunderDDVLicenceFeeScheme

7) LetterfromJ.A.Steel&Son

8) FloorPlan forGrainger’s2008Application

9) DocumentsReferencedintheMarketTraders’StatementofCase

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SECTION1:PersonalParticularsandProfessionalBackground

1.1. IamGarySaunders,ManagingDirectorofSaundersMarketsLtd.Ihavebeen

personallyinvolvedinthemanagementofmarketsandretailrelatedeventsfor

thirtyyears.Iamthesecondgenerationofmyfamilytowork withintheindustry.

ThelengthoftimeIhavespentwithintheindustryhasallowedmetogain

extensiveknowledgeofthefactorsthataffectsmallindependenttradersandthe

factorsthathaveadirecteffectonamarket.

1.2. ThecorebusinessofSaundersMarketsLtdisthemanagementofopenairretail

sitescontainingsmallindependentretailers.Wecurrentlyoperateatsixregular

locationscomprising11 tradingdaysperweekanddealwithapproximately650

individuallettingstotradersperweek.Wealsomanageotherareasofbusiness

suchastheoperationofseasonalpopup marketswithinshoppingcentres and

towncentres,aswellaslargeBankHolidayevents.Thefinaldivisionofour

businessistheprovisionofshorttermmarketmanagementarrangements,

alongsideaconsultancyserviceforbothprivateandlocalauthorityclients.

1.3. Wehavetworecentexperiencesofhands-onmarketrelocations: the first is

havingmanagedthesuccessfulrelocationoftheWesternInternationalSunday

Marketin2008.Thisinvolvedmoving approximately 300traderstoanew

locationwithalloftheassociatedplanningandnegotiationsforeachindividual

trader.Secondly,wearethemanagementteamattheNewCoventGarden

Market,whereweareinthemiddleofacompletemarketrebuildwhilsttheentire

marketcontinuestooperate.Thishasrequiredtwolargerelocationsof200retail

tradersand38wholesaletraderssofar,thelatestrelocationwasinMarch2017.

Furtherrelocationsofthewholemarket(400retailtradersand60wholesale

traders)areplannedthroughouttheremainingbuildplanuntilcompletionin

2022.

1.4. Although bothof theserelocationsconcern amixofopenairtraderswith

portablestallsandindoorwholesaletraders,theissuesoflocationplanning,

continuity,trust,maintainingcustomerawareness,communicationandrental

negotiationsarefactorsthatapplytoallsmallindependenttraders alike,

including thoseintheSevenSisters Market.

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SECTION2:RoleandObjectivesoftheProof

2.1. Therearefivemainobjectives oftheproof:

i. To reviewtheexistingstateofaffairsandoperations atthecurrent

SevenSistersMarket(“theMarket”),whichIconsiderinSection3;

ii. InSection4IexaminetheLicenceFeespaidbytheTradersinthe

past,theircurrentfeesandtherentstructureproposedbytheDDV

intheTemporaryMarket andtheNewMarketArea;

iii. InSection5Iassesswhether theundertakings providedbyGrainger

intheSection106 agreement(“s.106”,CD4/28)and theDraftDeed

ofVariation(“DDV”,CD4/38) servetheirpurposeofofferingaviable

planandallreasonableassurancesthatasmanyTradersaspossible

andaswanttowillsuccessfullynavigatethetwotransitionsfromthe

MarkettotheTemporaryMarketandfromtheretoathrivingand

buoyantNewMarketArea;

iv. InSection6I considerthereportontheMarketproducedbyUrban

SpaceManagementin2008 (CD11/6);

v. Finally,inSection7IrespondtoissuesintheMarketTraders’

StatementofCase (CD7/4) which relatespecificallytotheMarket.I

alsoaddresstheWardsCornerCoalitionscheme.

2.2. IwasapproachedbyMrKiddleofGraingerinFebruary 2017todraftthisProofof

Evidence.Iwasaskedtocommenton thecurrentstateoftheSevenSisters

IndoorMarketandontheobligationsforre-providingtheMarketsetoutinthe

s.106agreementbetweenGraingerandtheCouncil.Iwasalsoaskedtomakeany

recommendationsIjudgednecessaryforexpandingandimprovingthes.106

obligationstoensurethesuccessoftheNewMarketArea.

2.3. SinceFebruary 2017, Ihavecarriedoutaverydetailed analysisontheexisting

s.106obligations.Allofthe recommendations thatIjudgedwereimportanttothe

MarketanditsTradershave beenacceptedandincorporatedintheDDV acrossa

numberofdrafts.Withoutwaivingprivilegeonthesedocuments,myadvicehas

resultedinthefollowing changes,amongothers,nowcontainedintheDDV:

i. Establishing theschemeofLicenceFeesforthedurationofthe

TemporaryMarketandtheNewMarketArea;

ii. GuaranteeingthelocationoftheTemporaryMarketatApexHouse;

iii. GuaranteeingtheTraders’NewMarketAreastallswillbethesame

sizeastheircurrentstalls;

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iv. GuaranteeingtheTraders’TemporaryMarketstallswillbethesame

sizeoratleast90%oftheircurrentstalls;

v. AdvisingthattherelocationshouldbefreetoTradersandthatthe

budgetshouldnotbelinkedtotherateablevalueoftheirstall.

2.4. IconfirmthattheDDVreflectsmyadvice and that Isupportthecontentofthe

DDVentirely.IfIdidnotsupporttheobligationsorapproachtakenintheDDV

towardstheMarket,IwouldhaveadvisedGraingerandtheCouncilofthisandI

wouldstatethenatureofmyobjectioninthisProof.

2.5. Iam nowconfidentthatallreasonableprotectionandguaranteeshavebeen

providedinthes.106andDDVandthattheTradersandtheMarketstandthebest

possiblechance ofsurvivingandthrivingintheNewMarketArea undertheOrder

Scheme.

2.6. Mycommentsare basedontheDDVdated16th June2017 (CD4/38);shouldany

changesbemadetotheDDVthereafter,Ireservetherighttodealwiththose

changesinmyoralevidence.

2.7. IconfirmthattheevidenceIhavepreparedandprovideforthisinquiryistrue

andIconfirmthattheopinionsexpressedaremytrueandprofessionalopinions.

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SECTION3:ReviewoftheExistingMarketOperation

3.1. HereIreviewtheMarket’scurrentstateandhowitisoperated.Idiscussthe

OrderSchemeandGrainger’sobligationstowardstheMarketinSections4and5.

PhotographsoftheMarketareattachedatAppendix1.

3.2. ThecurrentSevenSistersIndoorMarket(”theMarket”)isacollectionof

independenttraders(“theTraders”)whohavecreated avibrantretailandsocial

environmentwithina rundownbuilding.Havinggrownuparoundmarketsand

makingacareeroutoftheirmanagement,Ihaveavestedandpersonalinterestin

thesurvival andexpansionofmarkets.AssuccessfulastheMarketis, however, it

isapparenttomethatchangeisinevitableandindeedrequired.Thecurrent

buildinganditsassociatedservicesareinurgentneedofmodernisation.This

wasnotedasfarbackas2008inthe“SevenSistersMarketReport”compiledby

UrbanSpaceManagement(“theUSMReport”,CD11/6),whichIexamineindetail

inSection6.

i) BriefHistoryoftheMarket

3.3. TheWardsCornerDepartmentstoreopenedin thefirstdecadeofthetwentieth

century andtradeduntil1972.Thecurrentmarketformatemergedin1984and

hasbeeninoperationcontinuouslyeversince.Isummarisehere abriefhistoryof

theMarket(largelytakenfromtheUSMReport):

i. TheMarketwassetupin1984andwasrunbyanindividualtrader,

MrROakley, ona20yearlease (p.7,USMReport);

ii. In1984thetradersweremainlyWhiteBritish,beforeexpandingto

includeAsian,Afro-Caribbean andAfricantraders(p.7);

iii. In1996therewereseveralblackorethnicminoritytradersbutno

Spanish-speakingtraderswhenUSMvisitedtheMarket(p.7);

iv. In 1996theMarketwasstalling,asweremanyothermarketsatthe

time:therewerealotofvacantunitsatthebackoftheMarketand

fewcustomers(p.7);

v. TheLatinAmericanpresenceintheMarketbeganinabout2000:

LatinAmericantradersfromtheElephant&CastleShoppingCentre

market neededspaceandmovedintotheMarket,alongwith

ColombianandBraziliantradersfromFinsburyPark(p.8);

vi. In2001,MrsJOakley tookovertheoperationofthemarketandthe

leasefromLUL.On15th September2006shehadafiveyearleaseon

theMarketrunningfromuntil2011(p.7);

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vii. By 2008,23ofthe46tradersoriginatedfromLatinAmericaand

weremainlySpanishspeakinganda “fewunits”werevacant(p.8).

ii) TheOperationoftheMarket

3.4. TheMarketiscurrentlyownedbyLondonUndergroundLtd(“LUL”)andisleased

toMarketAssetManagementSevenSistersLtd(“MAMSSL”),whichhasoperated

theMarketsinceSeptember2015.MAMSSLrecentlyconcludedanewleasewith

LULforfiveyearsat£60,000p.a.plussmallinflationaryincreaseseachyear.

3.5. TheMarketisaccessedviathreesmallentrancesdirectlyofftheTottenhamHigh

Roadandadoubledoorrearentranceforservicing.TheMarkethasagross

internalareaof9,730sqft.Ofthisgrossspace,6,200 sqftisrentablebyTraders;

408 sqftismadeupofamanagementofficeandtoilets(givingatotalareainuse

forstallsandservicesof6,892 sqft).Theremaining2,838sqft is circulationspace

forcustomers.This meansthat70%of thegrossinternalspaceisusedforstalls

andservicesand30%forcirculation.Thisisnotuncommonforoldermarkets.

Modernbestpractice,however,istoconstructnewmarkethallswitharatioof

usedspacetocirculationspaceof55:45.

3.6. TheresultoftheMarket’shighproportionofusedspaceisa crampedfeelingin

theaislesbetweenstallswhenitisbusy.Oneviewisthatthisbustleaddstothe

ambienceandcharacterofthemarket.Theotheristhatnarrowcrowdedspaces

putoffpotentialcasualcustomers andshortenstheirvisits.Inmyview,the

modernpracticeofallowingmorecirculationspacecreatesamuchmorepleasant

andinvitingenvironmentforcustomers.Asdiscussed below,onebenefitofthe

TemporaryMarketandtheNewMarketAreaisthattheyprovidefarmore

circulationspace, creatingmoreroomformorecustomerstoentertheMarket,

moreroomforseatingandamoreattractive space.

3.7. Thereare60 individualunitsofapproximately100sqft.Theseunitsarecreated

byusingwoodenframeworkstosubdividetheMarket’sinternalspace.Whilst

thisgivestheMarketthe“non-chainstore”feelwhich issorefreshing,these units

areinneedofupdatingasIdiscussbelow(paras3.13-21).

3.8. Theunitsarerentedonshorttermlicenceseitherassingleunits,or theycanbe

joinedtogethertoformalargerspace.TheUSMReportnotesthatin2008,the60

unitswereusedfor36separatebusinesses(p.1).Gradualcreeping extensions

andunauthorisedmezzanineshavesignificantlyincreased the“official”rented

sizeofsomestalls,however.Astheseextensionsarenotpermittedunderthe

termsoftheTraders’licencesandastheindividualsizesofthesehavenotbeen

formallymeasured,theyhavenotbeentakenintoaccountinanydiscussions.AsI

explainbelow, thecurrentmanagementcompanyisworkingtoaddressthe

Traders’useofadditionalspace(onwhichthey donotpayrent).

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3.9. Licencefees arechargedpersquarefoot(“sqft”)of space.ThemajorityofTraders

payaveragefees of£60/sqftperyear, forunitswithinthemarketandwhichdo

notfaceontotheHighRoad(“internal”units).Nineunitshavefrontagedirectly

ontotheHighRoad(“front” units)andtheseTraderspayanaverageof£64/sqft

peryear.1Itisverynormal tohavevariationsin rentschargedwithin amarket;

Traders’licencefeescanbeaffectedbytheir locationwithinthemarket,their

product,negotiationsandother factors. IdiscussthisfurtherinSection4.

3.10. VATisnotchargedonTraders’licencefeesandthereisnoadditionalservice

charge:all“services”suchasrubbishremovalandbuildingupkeepareincluded

inthelicencefee.AllTraderssaveoneareexemptfromNNDR (businessrates).

ElectricityispaidfordirectlybytheTraders throughindividualmeters.Traders

heattheirownstalls(oftenthroughelectricalheaters).

3.11. Asof16th June2017,theMarketisfullyletandthereisawaitinglist of14 traders

offeringarangeofproductsandservices,includingabakery,hairdressing,legal

servicesandclothing.Eightoftheseself-identifyasHispanicorSouthAmerican.

3.12. Theshorttermlicensesgivenosecurityoftenureandcanbeterminatedbythe

marketoperatoronsevendays’noticeorbythelicenseeon28days’notice.

iii) ConditionoftheMarketHall

3.13. Theconditionofthebuildingisdetrimentaltoitsfuture.Itisapparentthatthe

lackofsignage,thecrampedfeelingwithinthemarketandongoinghealthand

safetylegacyissuesthatrequireaddressingareallcontributingtothefeelingofa

“patchedup”marketratherthanaforwardlookingenterprise.Frommyown

visitstothesiteIcanconfirmthattheMarketlookstired,run-downandinneed

ofinvestment.

3.14. Ihavebeenprovidedwitha“RepairsAssessmentSummaryReport”preparedby

CBRE (“RepairsReport”,Appendix2).The briefwas“toestablishthegeneral

conditionandprepareapproximatebudgetcostsforessentialrepairstokeepthe

marketpremisesrunningsafelyasamarkethallforthenext10-15years” (p.2).

The Repairs Reportsummarisesthecurrentpositionasfollows:

Generallythepropertywasfoundtobeinverypoorconditionandtheremedialworkswehaverecommendedareextensiveandsubstantialinnatureandcost. If theworksarenotdealtwithinthenearfuture,deteriorationwillcontinueandtheworkswouldbelikelytocostmoreto remedy in the future. Some of the works should be attended toespecially urgently, in particular the matters relating to health and

1 Thenine“front”unitsrangeinbothsizeandrent:from72sqftto520sqftandinrentfromananomalous£51/sqftto£77/sqft.Ihavetakentheaverageofthesetoreach£64/sqft.

8

safety, including repairand reconfigurationof theelectrical systems,firealarmanddetectionsystems,replacementofrottenanddislodgedfascias,andrepairstounevenwalkwaysandflooring. (p.3)

3.15. AppendixIIIliststhenecessaryworksandestimatedcostsand hereIsetout the

moresignificant tasks fromamarketoperator’spointofview:

i. Replacing theincomingelectricitymainssupply,whichis“veryold”,

“beyonditsdesignlife”and“frequentlyoverloads”;

ii. Replacingtheelectricaldistributionsystemandmeteringtoallparts

oftheMarket: thecurrentsystem“hasbeenexpandedwithout

adequatedesignordocumentation”,“subtenants/licenseeshaveby-

passedsub-metersandincreasedloadingonthesystemwithout

consent...asourceoffireorelectrocutionrisk”;

iii. Demolishingandrebuildingtoanappropriatestandardthe

unauthorised“mezzaninestoragedecks/upperfloors/ceilings”;

iv. Replacingthe“defectiveandinefficient”heatingsystem,gasintake,

boileranditscontrols;

v. Replacingthefirealarmsystemthroughoutthebuilding:the“current

systemisnotcertified”andpartsofitareof“differentages”;

vi. Replacing thelightingthroughout thebuilding;

vii. Remedyingthelackofventilation whichiscurrently“inadequate”;

viii. Repairingthedamagedparquetflooringandcarpetingthroughout;

ix. Refurbishingexistingwomen’sandmen’stoiletsandinstallingan

accessibletoilet;

x. Rebuilding theunitpartitions;and

xi. Undertakingarefurbishmentanddemolitionasbestossurvey.

3.16. TheRepairsReportlistsmanyotherissueswhichmaybemorestructurally

significant,butthesearetheoneswhichwouldstandoutinparticulartoamarket

operator.Further,itisclearthattheserepairswouldbeto“makedo”andkeep

themarkethallgoing:theReport stopsshortofestimatingthefarlargersums

thatwould beneeded toaddressthefundamentalissueswiththewholebuilding:

Asmentionedabove,wehavenotincludedforrepairstothecornerbuilding to the left (South) of the market premises or theoffices/residentialpropertiesabovethemarketpremises.Howeveritwasclearfromacursoryinspectionoftheseexcludedpartsthat

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theywere vacant and in very poor condition. Theywere derelictand no longer wind and water tight. We are advised that leaks(causedby roof and cladding failure) to the excludedupperpartsabove themarkethallhave resulted inwater ingressanddamagewithin the market premises. We have not included cost for therepairs required to the upper parts, but the costs would besubstantial and easily run into the tens if not hundreds ofthousands of pounds. Ultimately, repairs to the parts above themarket hallwouldberequiredtofacilitatethesafecontinueduseofthemarketpremises.Weconsiderthisneedsurgentattention. (p.4)

3.17. Itisclear,therefore,thattherearesignificantandpressingissuesthatwouldneed

investmentandattentionintheMarketintheabsenceoftheGraingerscheme.

3.18. SinceOctober2016therehavebeenmeetingsofthe“SevenSistersMarket

Traders– SteeringGroup”,attendedbyTraders,GraingerandMAMSSL, todiscuss

theMarket’sfutureandmaintenanceissues(seeMinutes appendedtoMs

Johnson’sProof).Duringthesemeetings,thefollowingissueshavebeenraisedby

Tradersormanagementasneeding attention,manyofwhichmirrorthose

identifiedintheRepairsReport:

i. “Leakingroof”leadingtosomeTradersplacingbucketsintheirstalls

(Minutes,24th November2016);

ii. Electricalsystemsbeing“overloaded”(Minutes,24th November

2016;6th April2017);

iii. Unsafe/unlawfulstoragearrangementsandmezzanines(Minutes,

2ndMarch2017);

iv. Defectiveheatingsystemwhich“neverworkedcorrectly”,andthe

“veryoldboiler”(Minutes,24th November2016);

v. Defectivefirealarmsystems(Minutes,2ndMarch2017);

vi. Inadequateextraction/ventilationsystemsproducingunpleasant

smells(Minutes,2ndMarch2017);

vii. “Defectiveflooring”(Minutes,2ndMarch2017;6th April2017);

viii. Thetoiletsare repeatedlyvandalised:locksbroken,handdryers

pulledoffthe wallsandtowelsstolen(Minutes,2ndMarch2017);

ix. Theneedforincreasinglyintensepestcontrol (ratsandcockroaches)

(Minutes,24th November2016;2ndMarch2017;6th April2017); and

x. PoorrubbishclearanceandsomeTraders’poorfoodhygienein

cateringunits(Minutes,2ndMarch2017;6th April2017).

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3.19. IndividualTradershavealso shownanawarenessoftheneed for renovations,in

responses to a“MarketandShopBusinessSurvey” conductedbyURS in2012as

partoftheEqualityImpactAssessmentundertakenbyAecom forGrainger’sMay

2012planningapplication(“the2012BusinessSurvey”,CD11/4).Traderswere

asked22questionsabouttheirsituationandviewsontheOrderSchemein2012.

3.20. AnswerstoQuestions16and17 – askingfor“commentsregardingtheeffectsof

theproposeddevelopment”– included:

i. “Ithinkworkswillattractnewcostumers [sic]”;

ii. “Clientswouldenjoyanicerplace.Thisisnotniceashowitisnow.This

isveryold.Whatweneedistomaintainthebusinessthatarerunningat

themoment [sic],andmaintainthesamerent.Putitnicer, [sic] Allthis

looksdirty”;

iii. “Peoplewillbehappierasnewplacewillbeprettier”;

iv. “Moreclients,placewillbenicer”.

3.21. Itisthereforeveryclear thattheMarketisinneedofsignificantinvestmenteven

tomaintainitscurrentstateandwithoutaddressingdeeperstructuralissues.

Tradersandmanagementhavelongbeenawareofnumeroussystemicand

cosmeticissueswhich detractfrom theMarket’sabilitytoappealtocustomers.

iv) TheCompositionoftheMarket

3.22. Thecompositionofamarketoftenchangesandissubjectto“churn”astraders

comeandgo.Thisisanormalandhealthyaspectoflifeinamarketandthis

Marketisnodifferent.

3.23. Thereare38TradersintheMarketatpresent.Thecurrentmake-upofthe

Marketbybusinessis:

i. 36%services,hairdressers,nailbars,moneytransfer,lettingsand

legaladvice;

ii. 22%generalretailersincludingDVDs,home-wares,fabricand

fashion;

iii. 22%foodandproduce,includingabutcher,mini-supermarket,and

fruitandvegetables;

iv. 20%hotfoodtraders(whoalsohaveseatingareas).

3.24. TheMarch2017DiversityMonitoringBaselineStudy (“2017DiversityStudy”,

CD4/36,p. 14)states thatethnicmake-upofstallholdersispredominately

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“Hispanic/Latino/Spanish”:23outof31respondentsor76%.Thisgroup

occupiesapproximately83%ofthetotalspaceinuse.

3.25. TheUSMReport states that:

i. WhentheMarketwasestablishedin1984,thetenantswereinitially

WhiteBritish,beforeexpandingtoincludeAsian,Afro-Caribbean and

Africantraders;

ii. In1996,whenUSMvisitedtheMarkettherewereseveralblackor

ethnicminoritytraders,butnoSpanish-speakingtraders;

iii. TheUSMreportnoted in2008that23outof46theTraderswere

eitherLatinAmericanorSpanishspeaking;theremaining 13 Traders

wereEnglish,Afro-Caribbean,EuropeanorAfrican (p.8).

3.26. Itisthereforeclearthatovertheyearstherehavebeensignificantchangestothe

compositionoftheMarketasawhole.Thistrendhascontinued,withanumberof

changestothelistofTraders overthepastfiveyears,ascanbeseenfrom

Schedule7ofthes.106agreement,compiledinJuly2012.Schedule7lists 38

Traders, ofwhichonly14werestilloperating fromtheMarketinFebruary2017.

Theother 24unitshavechangedhands,many morethanoncesinceJuly2012.

3.27. Thisgeneralprocessof“churn”intheMarketisalsodemonstratedbytwo

surveysoftheMarket,onein2012andonein2017:both surveysdocument

youngbusinessesoflessthantwoyears’standing,aswellasmoreestablished

businesses,someofwhichhavebeenthereforovertenyears.

3.28. The2012BusinessSurveyshowsthat,ofthe35businesseswhich respondedto

Question4 (“HowlonghasthebusinessoperatedatSevenSistersmarket”):

i. Threeanswered“lessthan12months”;

ii. Fourhadbeentherefor“morethan12monthsbutlessthan2years”;

iii. Threeanswered“morethan2yearsbutlessthan5years”;

iv. 17 said“morethan5yearsbutlessthan10years”;

v. Eightbusinessesanswered “morethan10years”.

3.29. The2017DiversityStudystates that,ofthe20 businesseswhich respondedtothe

question“Howmanyyearshasyourbusinessbeentrading”:

i. Onebusinessanswered““lessthan12months”;

ii. Twoanswered“betweenoneandtwoyears”;

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iii. Threeanswered“betweentwoandfiveyears”;

iv. Fiveanswered“betweenfiveandtenyears”;

v. NinehadbeenoperatingfromtheMarketfor“morethantenyears”.

3.30. ThisdatasuggeststhattheMarketisperformingwellandisinrobusthealth.The

Marketisclearlynotstatic:Traderscomeandgo overtheyears,regularlysetting

upnewbusinesses.Thereisalsoacoreofwell-establishedbusinessesof some

years’standing and(asof16th June2017)thereisawaitinglistof14traders

readytooccupyvacantstalls.Theseareallpositivesignsin aMarket.

v) TradingHoursandServices

3.31. TheMarket’stradinghoursare:

9 amto7 pmMonday– Thursday

9 amto8 pmFridayandSaturday

Sunday(closed)

3.32. Sundayopeningisunderreview.Sundaytradingisundoubtedlybeneficial:itisa

farbusierandmoreprofitabletradingdaythanMonday.Iaminstructedthat

therearemanyTraderswhohaveexpressedawishtotradeonSundaysin

meetingswithGrainger’sMrKiddle.Thereisasecurityissue,however,inthatthe

stallsarenotallindividuallylockable (althoughtheMarketitselfcanbelocked).

SothosewhocannotordonotwishtotradeonaSundaywouldleavetheir stalls

vulnerableiftheMarketisopeneduponaSunday andtheywereabsent.Itis

thereforeanall-or-nothingsituation:sevendaysaweekornoSundaytrading.

3.33. Sevendaytradingcanbeverydemandingforindependentsoletraders:some

Traderswillnotbeabletoopeneverydayoftheweekeveniftheywishedto.I

haveexperiencewhereamarketoperatorhastriedtoenforceseven-daytrading

andbeenunsuccessful,damaginghisrelationshipswithhistradersintheprocess.

Flexibilityisthereforeessentialwhentryingtointroduceadditionaltradingdays

anditshouldnotbecompulsoryunderthelicencesfortheTemporaryMarketor

theNewMarketArea.InoteherethattheTemporaryMarketandtheNew

MarketAreawillhaveindividuallylockablestalls andIconsidertheimpactof

having52additionalandprofitabletradingdays onLicenceFees (para.4.109).

3.34. TheMarkethasgoodloading anddelivery facilities.Thereisalsolimitedparking

available,althoughInotethattheotherMarketssurveyedinSection4 belowdo

nothavetraderorcustomer parking,savefor WoodGreenwhichispartofa

largershoppingcentreandthereisaccesstoa multistoreycarpark. Idiscussthe

situationintheTemporaryMarketandNewMarketAreabelow(para. 5.172).

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vi) CurrentManagementoftheMarket

3.35. ItisapparentthattheMarkethasbeensomewhatlackinginstructured

management overthelastfewyears.Theissueswhichhavearisenappearmainly

tohavecomeaboutpriortoMAMSSL’stermasoperator,althoughtheuncertainty

aroundtheMarket’sfuturewillhavemadeitspositiondifficultaswell.

3.36. Theseissuesarisingoutoflaxmanagementpracticesinclude theunlicensedand

unauthorisedconstructionofmezzanineareasaboveunits;thegradualincursion

ofpermanentstructuresontotheMarket’spublicareas;andunauthorised

alterationstoservices,includingalterationstoelectricitysupplies.TheTraders’

ad-hocandunauthorisedchangestounitsandserviceswill needaddressingin

thecurrentMarketand inthenewMarket.Iunderstandthisisbeingtackledby

managementthroughdiscussionswithindividualTraders,explaining theneedto

staywithintheareaspecifiedontheirLicenceandforwhichtheypayfees.

3.37. Idonot mentiontheseissues inordertocriticisepreviousorpresent

managements butaspartofthepicturewhich demonstrates thattheMarkethas

notbeencontrolledormanagedinamannerthatwouldmaximiseitspotential.It

hasthelookandfeelofamarketthatlacksdirectionandstructure,wherethe

individualtradershave createdthe bestenvironmentoutofwhattheyhave,with

nobodyconsideringhowtheMarketoperatesorpresentsitselfasawhole.

3.38. Graphicexamples ofthisincludethesignageandentrancestotheMarket,which

areshabby,outofdateandveryhardtosee(Appendix1).TheMarket’sprime

positionnexttoabusyUndergroundstationentrancehasnotbeenexploitedto

anythingnearitsfullpotential.InsteadonlytheTraderswhooccupythefew

stallswhichfront directly ontotheHighRoadhavebeenallowedtobenefitfrom

theMarket’sprime location,arguablytothedetrimentoftherestoftheMarket.

3.39. Thishasbeenthecaseformanyyears: the USMReportnotedin2008that“The

entrancesarenoteasytopickoutandareclutteredwithsignage.External

signageforthemarketisincoherent,oftenoutofdateandbarelyvisible”(p.11).

Itisalsoborneoutbyonlinereviews:

i) LondonTownInformationnotesthat“Eventhoughit'srightnextto

SevenSistersTube,youcouldeasilywalkpastthecoveredSevenSisters

Marketifyoudidn'tknowitwasthere.Hiddenawaybehindarowof

shops,thewhitedoubledoorsaretheonlyindicationfromtheoutside

thatit'sthere”2;

2 http://www.londontown.com/LondonInformation/Shopping/Seven_Sisters_Market/6dc3/

accessedon9th May2017.

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ii) ThemostrecentTripAdvisorreviewon30September2015 callsit:“A

HiddenTreasure:...GoodjobIhadgooglemaps [sic] onmyphoneas

couldeasilyhavewalkedpastwithoutrealisingitwasthere- butonce

insidewhat agreatfind”3.

3.40. FrommyownvisitsIconfirm thattheMarketdesperatelyneedsanattractive,eye

catchingentrance;thebenefitofthissimplechangetomaketheMarketvisibleto

casualvisitorsontheHighRoadwouldbeenormous.Iaddresstheproposed

changesinSection5,whichIbelievewillhugelyimprovethecurrentsituation.

3.41. Similarly,theMarkethasnosocialmediapresence.Thereisaverybasicwebsite

whichgives detailsofopeningtimes,addressandalistofbusinesstypes.4There

isasocialmediapresenceforoppositiontotheOrderScheme(suchastheWards

CornerCommunityCoalitionFacebookpage)andprotestingthelossofthe

Market,thereisnoorganisedpromotionoftheMarketitselfasaplacetoshop

andsupport.Again,in2008theUSMReportstatedthat

Themarketmanagers[theHeadLeaseholder]donotundertakemarketingforthemarketas awhole.Thatislefttotheindividualtraderse.g.thereisnowebsiteforthemarket,butseveralofthetradersadvertiseinLatinAmericannewspapersasagroup.(p.8)

3.42. Ihavelittledoubtthat muchoftheMarket(allexcepttheHighRoadunits)

receivesverylittlepassingorcasualtradeandinsteadreliesheavilyonexisting

customersandwordofmouth.

3.43. TheMarketwould therefore benefitenormouslyfromacoordinatedmarketing

program,whichshouldberunbytheMarketOperator usingmaterial suppliedby

Traders.Usingsocialmediatopromotemarketshasprovedtobeverysuccessful,

particularly throughFacebook.Atthetopendofthespectrumforindoorvenues,

BoroughMarkethas83,000“likes”onitsFacebookpage and GreenwichMarket

has 11,000 “likes”.Evenoutdoormarketslike NorthWealdinEssex,Dagenham,

or WellsbourneinWarwickhaveinexcessof10,000 “likes”each.

3.44. OnceaFacebookpageis“liked”byaFacebookuser,theuserreceives updateson

thatpage’sactivityandbecomes aprospectivecustomer.Thisprovidesthe

marketswithexcellentopportunitiestoupdatethesepotentialcustomers on

dateswhenthemarketswillbeheld(andlocationsifappropriate);onnew

productsorstallsin themarkets;onspecialevents,promotionsorcompetitions.

Socialmedia is alsoan opportunityforspreadingwordaboutthemarkets’

3 https://www.tripadvisor.co.uk/ShowUserReviews-g186338-d2470227-r315141299-Seven_Sisters_Indoor_Market-London_England.html#CHECK_RATES_CONT accessed10thMay2017.4 http://sevensistersmarket.co.uk/visit.html accessed12th June2017.

15

existenceandattractingnewcustomers.UsingFacebook asanexample again,

whenaFacebookpageis“liked”byanindividual,this isvisibletotheir“Facebook

friends”whowillthenlearn aboutthemarket.Ofcourseitisimpossibleto

quantifythepercentageofanygivenmarket’scustomerswhichderivesfroma

socialmediapresencebutitisabsolutelyclearthathavinganinteractivepresence

canhavearealimpactonamarket’sprosperity.

3.45. TheTradershavealsoidentifiedthisneedtoadvertisetheMarket,asshownby

answerstoQuestion15ofthe2012BusinessSurvey: “Whatadditionalmeasures,

ifany,doyoufeelwillbenecessarysothatyourbusinesscancontinuetooperate

inthelongerterm?”

i. “Toadvertisethebusinessandallowthebusuness[sic]tomaintainthe

sameprices, sosameclientscanaffordit”;

ii. “Moreadvertisementwillatrtractmorecustomers [sic]”;

iii. “Enableoldcustomerstofindus”.

3.46. AtpresenttheMarketdoesnotholdmanyformalevents,buttherearecasualand

ad-hocgatheringsonmanyevenings,usuallyonFridaysandSaturdays.Thereis

greatscopeforsocialeventstobeawayof publicisingthe Marketandrelocations.

3.47. Ofcourse,bettermarketingdoesnotrequirenewpremises;Imentionithereto

explainthecurrentsituationandtodemonstrateyetagaintheenormousscope

forimprovingandstreamliningthisMarket.IaddresstheDDVobligationsfor

advertisingbelow(paras5.126-133): theMarketFacilitatorwillberesponsible

foradvertising theTemporaryMarketandNewMarketArea.Iamconfidentthat

thiswillbeveryhelpfulastheMarketundergoestherelocations.

vii) Conclusions

3.48. Insummary,myconclusionsontheMarket’sstate arethat:

i. TheMarketisunique,vibrantandtradingtocapacity:Tradersarebeing

successfulindifficultconditions.

ii. TheMarkethasverylittleappealtoanybodynotalreadyusingit.The

entrancesareextremelypoorandundefined, whichdoesnotencouragea

casualshopper.Thereisscopetocreateahighprofile,modern,clean,

spaciousmarketwhichcan onlyencourageadditionalfootfall.

iii. Theconditionofthebuildingmeansthatchangeisinevitableandindeed

requiredinordertosecurethefutureoftheMarket (see Section4).

16

iv. TheMarketisnotoperatingatanythinglikeitsbusinesspotential:itlacks

direction,leadership andabasicmarketingplan.Thisisnotacriticismbut

anindicationofthescaleof theopportunitiesavailable.

3.49. Inmyview,thisMarketisripeforchangeanddevelopmenttoenhanceitscurrent

offeringandcomposition,nottochangeit.TheDDVguaranteesdiscussedin

Sections4and5provideeveryreasonableassurancethatthisMarketcanrelocate

successfullybackintotheNewMarketAreaandthrive.ThisSchemerepresents

theTraders’bestpossibleopportunitytokeepandimprovetheirMarket.

17

SECTION4:LicenceFees

4.1. InthissectionI examinethecurrent andprevious licencefeeschargedinthe

Market andexaminecomparablesituationsinnearbymarkets.Ithenaddressthe

provisionsinthe s.106agreementbetweentheCouncilandGrainger(“thes.106”)

andintheDraftDeedofVariation (“DDV”). TheseprovisionsfixtheTraders’

licencefeesthroughoutbothrelocationsuntiltwoandahalfyearsintothe

openingoftheNewMarketArea.

4.2. Insummary,myconclusionsare:

i. IamascertainasIcanbethattheTraderscan copewiththeLicenceFees

fixedintheDDV.Infact, overthefiveyearsunder thefixedscheme,

someTraderswillpayless thantheydonow.AmongTraderswhosefees

increase,includingVATthelargest increaseis33.55%overfiveyears.

ii. WithouttheOrder scheme,licencefeeswillalmostcertainlyincrease

whatever happens totheMarket– whetherona“donothing”basis,or

withrepairsona“makedo”basis,orundertheWCCscheme.VATisalso

verylikelytobeaddedontolicencefeesinanyrepairssituation.

iii. Underanyoftheseoptions,Traders’licencefeesarelikelytobehigher

thanundertheOrder scheme.

iv. Althoughthereisanelementofspeculationhere– giventhatthisissome

yearsaway– myinstinctisthat,inthe longterm,thistrendwould

continue:theTraders’feeswouldbelowerunderGrainger’sschemeand

profitshigherthanunderthe“donothing”,“makedo”orWCCoptions.

i) TheCurrentRentSituationintheSevenSistersMarket:

4.3. IaminstructedthatLULleasestheMarkettothecurrentmarketoperator

MAMSSL for£60,000 p.a.

4.4. Asnotedabove,theUSMReport states thatsince2001theMarkethadbeen

operatedbythe“HeadLeaseholder”,onafiveyearleasefrom15th September

2006until2011.TheHeadLeaseholderwasalsocharged£60,000p.a.forthe

leaseoftheMarketfromLUL(p.7).Themarketoperatorrenthasthereforebeen

atthesamelevelforatleast adecade,althoughIunderstandthatitisnowsubject

tosmallannualincreasestoreflectinflation.

4.5. MAMSSLcharges theTraderslicencefeeswhichequateto anaverageof£64/sqft

p.a. for“front”unitsfacingtheHighRoad(apremiumposition)andanaverageof

£60/sqftp.a. forunits insidetheMarket.Thisincludesservicescharges(upkeep

ofthebuilding,rubbishremovalandsoon).Traderspayelectricityfees

18

individuallyaccordingtousageinaddition.AllTraderssaveoneareexemptfrom

NNDR(businessrates).MAMSSLisnotVAT-registeredandthereforedoesnot

chargetheTradersVAT.

4.6. Thesefiguresof£60and£64/sqfthavebeen the average licencefees foratleast

severalyears,certainlybefore MAMSSLtookoverthemarketoperatorleasein

early2015.Inmyexperienceitisunusualformarketoperatorstobotherwith

thehassleofraisingtraders’licencefeesiftheyarenotplanningtocontinue

operatingthatparticularmarket.Almosteverylicencefeerisewillinvolvea

degreeofnegotiationanddiscussionwithmosttradersanditisthereforeatime

consuminganddelicateexercise.Ithereforeassumethatthelicencefeeswereset

attheirpresentlevelssometimebefore,possiblysomeyearsbefore,theprevious

marketoperator,theHeadLeaseholder,stoppedoperatingtheMarket.

4.7. Inotethatthe2008USMReportstates thatinMay2008

“acentralunitinthemarket(ofaround95sq.ft)rentsatbetween£72-85/week, with the majority of historic traders being on the£72/week. Units fronting theHigh Road are charged at a higherratethanthis,roughlydoubletheindooramountbyarea” (p.9).

4.8. Paying£72perweekforan entirestall(not persquarefoot)isatotalof£3744

perannum.Dividing£3744by 95sqftgives alicencefee persquarefootof

£39.41 p.a. foraninternalunit.Thereportsaysthatfor“unitsfrontingtheHigh

Road” thechargeis“roughlydouble”,givingaroughfigureofaround£80/sqftp.a.

fora“front”unitontheHighRoad.

4.9. Alicencefee of£39.41/sqftfor“internal”unitsappears tometobe

mathematicallycorrectandsounds reasonable for2008andthis kindofmarket.

However,IbelievethattheUSMReportmaybeincorrectinassertingthatthe

“front”unitspaidafeethatwas“roughlydouble”the“internal”units,soaround

£80/sqft.Ihaveneverseenanydocumentsorfigureswhichsuggestthatthe

“front”unitspaidthisinthepast.Indeed,the“front”unitsnow payanaverageof

£64/sqft.

4.10. Itisnotimpossiblethatlicencefeesfor“front”unitswerepreviouslyat£80/sqft

andhavesincedecreasedbelowthistocurrentlevels.Itseemsextremely

unlikely,however,andparticularlygiventhatthefeesfor“internal”unitshave

remainedat£60/sqft,whichishigherthanthe2008levelsof£39/sqft.USMhave

therefore,inmyview,madeanerrorincalculationsomewherewithregardsto

the“front”units.

19

4.11. ThereforeasIbelievethatUSMhavemadeamistakeandgiventhattheydonot

provideanyevidencefortheirassertionthat“front”unitspay“roughlydouble”,I

donotplaceanyrelianceonit.

4.12. Ialsonote thatUSMrelyon anaveragelicencefeefigureof£31/sqft p.a.(p.9).I

amunclearhowUSMhavereachedthisfigure.Fromthereportit appearstohave

beencalculatedbyestimatingtheoverallannualincomefromafully-letmarketat

£190,000anddividingthatincomeacrossthe6,150sqftofspacewhichwasthen

availabletolettoTraders:£190,000dividedby6,150equals£30.89,whichwas

thenroundedupto£31/sqft.

4.13. Itisentirelyunclear,however,howorwhyUSMadoptedanoverallincome

estimateof£190,000.Further, itisunclearwhytheyusedthatunconfirmed

estimatetocalculaterentper squarefootperyear,whentheyhavequoteda

specificandconcretefigureof£72perweekfora95squarefootstall,producinga

licencefeeof£39.41/sqft p.a.IalsocannotunderstandthebasisonwhichUSM

havedivided£31/sqftinto“aservicechargeofaround£17/sq.ftandarentof

around£14/sq. ft”(p.9).

4.14. USM’sfigureof£31/sqftp.a.thereforedoesnotappeartobebasedonany

concretefiguresobtainedfromthemarketoperatororTradersthemselves andis

inconsistentwiththeonlyspecificfigurequoted intheReport.Itthereforedoes

notappeartomethatitiscorrectthatin2008Traderswerechargedalicencefee

of£31/sqft;IthinkthatUSMhavemadeamistake intheircalculations.

4.15. AsIamunabletounpickthecalculationswhichledtothisfigureof£31/sqft and

asIconsiderthatitismistaken,Ihavenotuseditinmyanalysisofpreviously

chargedandcurrentlicencefeesintheMarket.

4.16. Assuming,however,that the2008USMReportisaccurate withregardtothe

quotedfiguresof£72perweekforan“internal” stallof95sqft,therefore,there

hasbeenariseinlicencefeeschargedintheMarketfrom£39.41/sqftto£60/sqft

for“internal”units.Thisrepresentsariseinlicencefeesof52.25%for“internal”

unitsbetween2008and2015 (atthelatest).Giventhescaleofthisincreasefor

“internal”units,itseemslikelythat“front”unitswerealsochargedatalowerrate

thanatpresentandthattherewasalsoanincreaseinlicencefeesfor“front”units

totheirpresentaverageof£64/sqft.However,asIhavesetoutabove,thereisno

reliableevidenceforwhat“front”unitswerepayingin2008andthisistherefore

onlyan assumption.

4.17. Sinceatleast2015,therehasbeennoincreasein licencefees.

20

ii) AnalysisoftheCurrentSituation

4.18. Intermsofthemarketoperator’slease,inmyviewamarketoperator’sannual

leasefeeof£60,000isextremely lowandwellbelowwhatthissortofmarket

oughttobefetchingandcertainlybelowwhatitcouldbefetchingwith

appropriateinvestmentandattention.Thisverylowrentislikelytobeduetothe

building’sstateofdisrepairanddilapidation.Theexistingmarkethallisinclear

needofrefurbishment.InotethattheUSMReportreachedasimilar conclusion

onthesituationnineyearsago:“WeconsiderthatthecurrentrentpaidtoLULis

prettylowasitreflectsthepoorstateofthebuilding”(p. 12).

4.19. ThecircumstancesofuncertaintyovertheMarket’sredevelopmentwillalsohave

contributedsignificantly tothedevelopmentofthecurrentunsatisfactory

situation.Therehasbeensomekindofdevelopmentapplicationorschemewhich

wouldaffecttheMarketgoingthroughtheplanningprocessfornearlyadecade.

Nomarketoperatororlandlordwouldinvestinsuchabuildingintheshortto

mediumterm.Thecurrentsituation – howeverunsatisfactory – was allowedto

continuewithshorttermfixes,ratherthanthesignificantlongterminvestment

thatthisMarketwouldneedifitwere toremaininthecurrentbuilding.Iagree

withtheUSMReportwhereitnotesthattheriskthattheTraderscanterminate

theirlicenceson28days’noticewouldsignificantlyreduceanyincentivefor

managerstoundertakethenecessaryworks(p.4).

4.20. Similarly,intermsoftheTraders’licencefees,Ibelievethat the £60/sqftand

£64/sqft averageshavebeenchargedforsolongthroughanumberoffactors; a

significantoneistheuncertaintyregardingthedevelopmentoftheMarket.The

arrivalofthenewmanagementcompanyin2015 willalsohaveaffectedtherent

andkeptitlowerthanmightotherwisehavebeencharged inastablepermanent

market.In2008,USMconcludedthat“thetraderscurrentlyenjoythebenefitsof

alowrent.Herethisisfora numberofreasons,includingthemanagementstyle,

conditionofthebuildingandtherenttoLULnotbeingtooonerous”(p.11).It

appearsthatrelativelylittlehaschangedsincethen.

4.21. IaminstructedthatwhenMAMSSLtookovertheMarketlease fromthe previous

operator in2015,rentswereattheircurrentlowlevelandmanagement practices

weresomewhatlaxandindisarray, asisoftenthecasewhenmanagementofa

marketchangeshands.ParticularissueshavearisenwithregardtoTradersusing

morespacethanpermittedundertheirlicence(particularlybyencroachingon

communalspace)andtherehavealsobeenhealthandsafetyissues.Iunderstand

thatMAMSSLhavebeenseekingtoaddresstheseoverrecentmonths.

4.22. MAMSSLhaveclearlythereforedecidednottoraiselicencefeesduringitsfirst

yearsasmarketoperatorinthesecircumstancesofuncertainty overtheMarket’s

21

futureand achangeinmanagementpractices.Inmyviewitis asensiblebusiness

decisionforamarketoperatornottoraiselicencefeesandsoavoidincreasing

thescopefortensionanddifficultrelationswiththeirtradersinalready

potentiallydifficultcircumstances.

4.23. Ithinkthisiswhythelicencefeesareattheircurrentstaticlevels.Itisclearthat

theMarketcansustainthesefeesgiventhatitis currentlyatfullcapacity andhas

awaitinglistof14 traders.Inmyview,however,itisentirelyclearthatthe

Traderscanexpectlicencefeeincreasesintheneartomediumfuture under any

circumstances,irrespectiveofwhether:

i. TheMarketsimplycontinuesasitis,withoutGrainger’sschemeorany

refurbishments,ona“donothing”basis;

ii. Refurbishmentworksarecarriedoutona“makedo”basiswithinthe

existingshell; or

iii. RefurbishmentworksonthelinesenvisagedbytheWardsCorner

Coalitionscheme (alsocalledthe“AlternativeScheme”).

i. Option1:“donothing”

4.24. Thefirstsituation,thattheMarketcontinueswithoutanyinvestmentatall,seems

extremelyunlikelytomefromamarketoperator’spointofview.Arational

investorholdinganassetliketheMarket(eitherthepremisesorthelease)would

notsimplyallowittocontinuetodegeneratefurtherovertheyearswithout

makinganyeffort toensureacontinuingreturnontheirinvestment.

4.25. However,evenifthemarketoperatororlandlordfailedtoinvestatallinthe

Market,rentsarealmostcertaintoincreaseoverthenextfew yearsanyway.The

Marketappearstobeundervalued by comparisonwithsimilaroperations

elsewhere andtheexistenceofawaitinglistoftraderssuggeststhatdemand

outstripssupplyforspace,puttingupwardpressureonlicencefees.

4.26. Althoughpredictinglicencefeeincreasesinthissituationoverthenextfive years

ishard,thefactsthattheMarketisfullandtherehavebeennoincreasesforyears

stronglysuggestthatcurrentrentscouldberaised.Inmyview,thiswouldbe

doneinincrementstoachievefeelevelsof,conservatively, around£75– £80/sqft

forthe“internal” unitsand around£100/sqft for“front”unitsafterfiveyears.

Thisisaboutinlinewithroughlysimilaroperationselsewhere(seeTableatpara

4.61).Thisequates torises of25–56.25%,around8%p.a.acrosstheMarket.

4.27. Onthisnote,Iaminformedby MAMSSLthatalicencefeeriseisexpectedinthe

shortterm,mostlikelyduringwinter2017-18.Theplannedincreasefor2017is

22

10%,raisingtherentto£66/sqftfor“internal”unitsand£70.40for“front”units,

withafurther10%increaseplannedfor2018,to£72.60/sqftfor“internal”units

and£77.44for“front”units.

4.28. Anyrisesafterthisinthecurrentsituationwillbeinlinewithinflation.Thisis

unsurprising giventhatfeeshaveremained staticforatleasttwoyears,probably

longer.ItisobviouslyunreasonableforTraderstoassumethattheycancontinue

atthecurrentratesindefinitely.

ii. Option2:“MakeDo”basis

4.29. Intermsofthesecond situation– theMarketbeingleftasitiswithonlythose

refurbishmentsnecessaryformaintainingthebuilding – IrefertoCBRE’s

“RepairsReport” (Appendix2).AsdiscussedaboveinSection3,itisclearfrom

theRepairsReportthattheserepairswouldbemerelyto“makedo”:keepingthe

markethallgoingbutnot addressingthefundamentalissueswiththebuildingas

awhole.

4.30. EvenwithinthescopeofassessingtherepairsnecessarytokeeptheMarket

going,theRepairsReportalsomakesclearthatthereareassociatedcostswhich

havenotbeenincluded.TheRepairsReportnotesthat“Wehavenotincluded

costsforre-installingandre-fittingeachstall/retailunittothebespoke

requirementsofeachlicensee”norfor“thereplacementofanyLandlord'sfixtures

orfittingswhichmaybemissingfromtheproperties,whichwehavenotbeen

madeawareof”(pp. 3-4).

4.31. Further,theRepairsReportexpresslylimitsitselftoconsideringthecostofworks

“undertakeninasinglephase. Stagedcompletionmayincreasecostsabovethose

reportedhere” (p.5).Thereisneither abudgetforTradercompensationforlost

businesswhilsttheworksarebeingdone,norforrelocatingthemtoatemporary

markettoenabletradingcontinuity.

4.32. TheRepairsReportalsonotesthat

To complete the scope of workswe have allowed for in this report, itwouldbenecessarytorelocatethesubtenants/licenseesforthedurationoftheworks,whichweconsiderwillbeapproximately20weeksonsite.There would therefore be additional costs to consider associated withsuchre-locationandprovisionofalternativeaccommodationduringtheworks.Wehavenot includedany costs in this report for re-locatingorproviding the subtenants/licensees with alternative accommodationduringtheworks. (p.5)

4.33. AllTraderswouldthereforeneed toleavetheMarketforbetweenfourandfive

monthsduringtherefurbishmentperiod.Thismeansthat additionalsumswould

23

beneededfor relocatingtheTradersorsubsidisingtheirlostincomeduringthe

refurbishmentperiod.Alternatively,Traderswouldbeatriskofbeing unableto

tradeforfourtofivemonths andlosingcustom.Itshouldthereforebenotedthat

either mylicencefeecalculationsforthisscenariomay betoolowtofund the

coststhatwouldactuallybeincurredbythisrefurbishment(certainlyifitwereto

bedonetothelevelofguaranteesintheDDV),or that therefurbishmentputsthe

Tradersat serious risk.

4.34. CBRE’s estimateis £1,239,000 forthe“makedo”worksneededtokeepthe

buildingfunctioning(includingVAT,giventhatthepropertyisnotelectedfor

VAT).OnthisbasisIhavecalculatedthelicencefeesrequiredtofinancethese

works.Ifanoperatorweretotakea10yearleaseatthecurrentrentandfundthe

“makedo”works– allowingforthecapitalrepayment,operatingcostsanda

margin fortheoperator – Iestimatethatfeeswouldneedtoriseto£85/sqft(plus

VAT) for“internal”unitsand£112/sqft(plusVAT)for“front”unitstomake it

viable.Thisequatestoimmediaterisesof,respectively,70%and110%including

VAT.IhavesetoutmyworkingsforthesecalculationsatAppendix3.

iii. Option3:theWardsCornerCoalition Scheme

4.35. The third situation– refurbishment asenvisagedbytheWardsCornerCoalition

scheme – wouldalsomeanthatthecurrentratesforthe marketoperator’srent

andTraders’licencefees wouldrise.

4.36. IftheMarketweretoremaininthecurrentbuilding,thenanylongtermfuture

agreement betweenlandlordandmarketoperator wouldbecertaintocontaina

scheduleofworkswhichwouldrequiresignificantcapitalinvestment intothe

fabricandupkeepofthebuilding.IftheOrder schemehadnotbeenbrought

forwards,Idonotthinkthatthe Marketwouldbeallowedtocontinueinits

presentdilapidated,shabbystate,wellconcealedfrompassers-byandwithout

anycoordinatedmarketingorpublicpresence.

4.37. Thiswouldhavesignificantupwardpressureonlicencefeesintwoways:

i. Thelevelofinvestmentandrefurbishmentwhichwouldberequired

would undoubtedlycreate enormouspressuretoincreasethelicence

feeschargedtoTraders.Itisinconceivablethatanyinvestor wouldbe

ableorwillingtoabsorbthecostsofcarryingouttheseextensive

buildingworks inordertomaintaintheTraders’currentlicencefees.

ii. Anycapitalinvestmentofthistype(and,forclarity,thesameappliesto

Option2,consideredabove)wouldalmostcertainlyresultinthebuilding

beingbroughtintotheVATscheme bywhoeverfundstheproject,in

ordertorecoupthe20%VATchargedonbuildingcosts.Thiswould

24

resultinTradersthenbeingchargedVATontheirlicencefees.Charging

theTradersVATistherefore,realisticallyspeaking,almostinevitable

althoughitwouldbeabusinessdecisionforwhoevertookontheproject.

Icannotimagineasituationwhereaninvestorwouldspendthelarge

sums requiredtorefurbishamarketandelectnottorecoupthe20%

VATincurredonbuildingcosts,especiallyatthese levels.

4.38. A reportbyArcadishasestimatedthelikelycostsofundertakingtheWCCscheme

arearound£3,091,000 forthemarkethallalone(seeMrFourt’sProof).Theonly

indicationofcosts givenby theWCCis“Aprovisionalcostinghassuggestedthe

visionmaycostupto£13million”(DesignandAccessStatement,p.93).

4.39. TheWCCschemealsogivesno details aboutrent,sayingonlythat“theTrusthasa

commitmenttotheexistinglicenceholdersto keeptheirrentfairand

reasonable…Basedoncurrentassumptionsitishopedtherentalvaluewillnotbe

subjecttofurtherincrease,howeveroncemarketfactorsarebetterestablished

thismaychange” (DesignandAccessStatementp.91).Itisclearlyenvisagedthat

therewillbesomeincreaseinlicencefees,therefore,butnoindicationofthescale

oftheincrease.

4.40. Thelackofdetailavailablefor theWCCschememakes calculating futurelicence

feelevels extremelydifficult.AsIdiscussinSection7below,themainissuewith

this schemeisthatthereisnodefiniterelocationandcontinuityplan.Thereisa

referenceto theMarketbeingrelocatedintothe“cornerbuilding” duringthe

worksbut,bymycalculation, thiswillonlyaccommodate37%oftheTraders.

4.41. Giventhelevels ofestimatedinvestmentrequiredforthis scheme,itis

inconceivablethattherewouldnotbeanupwardpressureonlicencefees.

Licencefeeswouldhavetorise,eventhoughtheWCCis proposingtomanagethe

marketinternallyandtherewouldthereforebenoneedtohaveaprofitmargin

foramarketoperator.

4.42. Ibelievethattherewouldbe– asanabsolute minimum– anincreaseinlicence

fees tothelevelsofthefixedschemeofLicenceFeessetoutintheDDV(discussed

below):£75/sqftforZoneAunits,£65/sqftforZoneBunitsand£80/sqftfor

cateringunits.Isaythatthiswouldbetheminimumincreasebecause these are

genuine figureswhichhavebeenarrivedatafternegotiationbetweenadeveloper

willingtofundtheprojectandanoperatorwillingtotakealease;theseare

figuressupportingaliveandviableproject.Withthebestwillintheworldtothe

Traders,IdonotbelievethattheWCCwouldbeabletochargeless.

4.43. Infact,itisfarmorelikelythattheWCCschemewouldrequiremuchmore

significantincreases.InotefromMrFourt’sproofthat,withtheincomeprovided

bytheDDV-guaranteedlicencefees,theWCCschemeisunviable andwouldmake

25

aloss.Theneedtoavoidmakingaloss,nevermindachievinganyprofit,will

place significant additionalupwardpressures onlicencefees.Ialsorepeatthat

thebusinesscontinuityaspectoftheWCCschemeremainsunproven:thisisa

majorthreattotheon-goingviabilityofthe Market.

4.44. Inmyview,therefore,itis inevitablethatTraderswouldbechargedhigher

licencefeesintheMarket’smediumtermfuture:

i. EvenifnothingisdonetotheMarket,giventheperiodoftimeforwhich

thefeeshavebeenstatic,anymarketoperatorislikelytobegintesting

thewaterstoseewhattheTraderscouldafford andMAMSSLislikelyto

raisethefeesthiswinter;

ii. TheMarketdesperatelyneedsinvestmentandcannotcontinueinits

presentstateformuchlonger:theinvestmentrequiredwouldbecertain

toleadtoincreasedlicencefees;

iii. AnyinvestorisequallycertaintoseektorecoupVATcosts ofthe

necessaryimprovements byregisteringthebuildingintheVATscheme,

suchthatTraderswouldthereforebechargedVAT.

4.45. Therefore,evensupposingthatGrainger’sschemenevergoesahead,itismy

opinionthatlicencefeerisesarenearinevitable.Ifanyrefurbishmentofthe

Marketisundertaken,whichisthemorelikelyscenario,thennotonlywillthere

bebasiclicencefeeincreasesbutVATiscertainlygoingto beaddedontop.The

onlyreferencetorentlevelswithintheWCCschemeisto“keeprentlevelsfair

andreasonable”.

iii) FutureRentLevels:ComparatorMarkets

4.46. Whenconsideringpossiblefuture rentlevels fortheMarket,otherindoor

marketscanbestudied ascomparatorcasesbuttheseareoflimitedvalue.Every

managementcompanyoroperatorappearstoapplydifferentcriteriaastohow

theyarriveattheircurrentrentlevels andthereare manydifferentfactorsat

play.This makes itverydifficultto comparemarketsdirectlytoanyusefulextent.

Everythingisnegotiableandnothingispublic;inparticulartradersarenot

obligedtorevealtheirturnoveror other detailstothemarketoperators.

4.47. Below,IexaminetherentschargedinfourdifferentLondon indoor markets.I

havechosenNagsHeadandWoodGreenbecausetheyareveryclosetothe

currentmarketandareofsimilarkinds.ThemarketsatTootingandTooting

Broadwayarefurtheraway butareofaverysimilarnature;indoormarketswith

operatorssublettingtosmallindependenttraders.Allofthesemarketshavea

verydiverseethnicmixwithAfricanandAsiantradersstronglyrepresented.

26

4.48. ThereisamarketatElephantandCastlewhichhaspreviouslyhadasignificant

LatinAmericanelement,althoughthishasdeclinedandnosingle ethnicgroupis

nowdominant.Itiscurrentlyawaitingredevelopmentandisnotcomparablein

anyusefulwaywiththecurrentSevenSistersMarket:amongotherfactorsithas

manyoutdoor stallsandtherearefewertraders.Itshouldbenotedhoweverthat

anoutdoorunitdoescost£88/sqftonanall-inclusivebasis.

4.49. NagsHead,Holloway isperhapstheclosestintypeandlocation tothecurrent

market.ThestallsareverysimilarinnaturetothoseinthecurrentMarket:fresh

produce,commoditiessuchasDVDsandclothesandsomebeautystallssuchas

nailbars,althoughtherearenobusinessservicessuchaslettingagents.There

areapproximately60units.Themanagementcompanyusesasystemof

individualrentsforeachTraderandthereisadegreeofnegotiationforeach

individualstall.AtypicalrentatNagsHeadis£138/sqft p.a. andeachstallis64

sqft.Thisincludesallservices andbusinessrates,saveelectricitywhichis

chargedseparately.VATisnotcharged.Therentvariesanddependsonfactors

suchascurrentsupplyofspace,required openinghoursandtheproposed

commodityforthestall.Thereisalwaysapremiumpayableforcookedfood

stalls,ascustomisusuallygoodatthesestalls.

4.50. Intermsofsecurityarrangements,each stallisindividuallylockable andthe

markethasCCTVcoverage.Therearethreeloadingbaysavailableforservicing

anddeliveriestothemarket.Thereisnotraderorcustomerparking.

4.51. Fromatrader’s pointofview,NagsHead isasuccessfulmarketandthisrelatively

highrentlevelreflectsthedemandandvitalityofthisretailenvironment.There

areacoupleofvacanciesbutnotmany. Themarketisopeneverydayoftheweek.

4.52. ThecurrentmarketbuildingatNagsHeaddoesrequiresomeupdatingand

investmentasithasbecomerathershabby,particularlyitsaccess points,frontage

andpublicentrances.Theownersareintheprocessofimprovingthebuilding,

withparticularattentionbeingpaidtothepublicfacingareasandsignage.They

havealsorecentlyupdatedtheirwebsite,whichisnowwell-designed,informative

andusesTwitter,Facebook,Google+,InstagramandYouTube.5Thisisa

particularissuefortheSevenSisters Market,whichishardtoidentify,haspoor

signage andverylimitedonlinepresenceaimedatpromotingtheMarketitself.

4.53. WoodGreenMarket iscontainedwithinanareaofWoodGreenShopping

Centre.Itisrelativelylocal,atjustundertwomilesfromthecurrentMarketand

hasover20,000sqftofnetrentablespace fortraders’stalls,whichisfarlarger

thanSevenSisters Market.Thereare78units/stallsinthemarket.WoodGreen

5 http://nagsheadmarket.com/accessedon1st June2017.

27

isoperatedbyCapital&Regional,whichdevelopedthismarketinanarea ofthe

ShoppingCentre thatwasdeemedunsuitable fortheirexistingtenantbase,asit

wasalargerearcornerplotwithlimitedaccess.Itisopeneverydayoftheweek

(withshorterhoursonSunday).Thetradershaveaccesstoloadingbaysand

therearesomesubsidisedtraderparkingspaces withinthecomplex.Thereis

alsopublicparkinginthemulti-storeycarparkneartheshoppingcentre.

4.54. Capital&Regionalcurrentlycharge£40sqftp.a.plusVAT.Thisdoesnotinclude

services:electricityandbusinessratesarechargedinaddition.The“stalls”at

WoodGreenareverypermanentinnatureandhave theappearanceofsmall

shops.Thereisnotmuchfluidityorturnoveroftraders,perhapsoneortwoper

year.Everystallisoccupiedandthereisawaitinglistofbusinessesreadytostep

intostallswhichbecomevacant.Thebuildingiswellkeptupandhasnopresent

needforinvestment.Thewebsiteisup-to-dateand givesdetailsofthe

stallholders,openingtimes,events,afloorplanandsoon.6

4.55. Ibelievethatthefullmarketoccupancy andwaitinglistsignalsthatWoodGreen

isperhapsundervaluedbutitservesapurposefortheownersoftheproperty.

Thespaceusedforthemarketisunattractivetoanysinglecommercialentitywho

mightrentitasatraditionalshopspace.Theoperatoristhereforemakingafar

betteruseofitsspacebyrentingitoutcomparativelycheaplyasafullylet

market.InotethatintheUSMReporttheWoodGreenmarketislistedas

charging£91/sqftp.a. (p.10).Thisisausefulindicationofjusthowsignificantly

circumstancescanchangeinamarketoversuchaperiodoftime.

4.56. Inmyview,WoodGreenissomethingofananomalyintermsofitslowrent.It

shouldbenotedhowever,thatVATischargedandtherentdoesnotinclude

businessratesoranyservices,unliketheothermarketsconsideredhere.

4.57. TootingMarket isoperatedslightlydifferentlyfromWoodGreenandNagsHead

markets, inthattheoperatorherehasoverrecentyearsmadeaconcertedeffort

toimprovetheofferwithinthemarket.This particularoperatorplacesmuch

emphasisonofferingawidemixofstallssellingotherwiseunrepresentedand

unusualproductsandhasofferedrentincentivesalongwithaveryactive

marketingstrategytoassistwiththis.Themodelappearstobesuccessfulasthey

willbeadding7,000sqftofretailspacetothemarketinJune2017.Hotfood

stallsarechargedapremiumastheyprovidea reliable incomestream.

4.58. Therearearound50unitsof100sqfteach,withrents varyingbetween£55and

£80sqft.Thisincludesbusinessratesbutexcludeselectricity,whichispaid

separately.VATisnotcharged. Theirturnoverrateoftradersisaroundoneor

6 https://www.themall.co.uk/wood-green/shop/market-hall/ accessedon1st June2017.

28

twoperyearandtherearecurrentlynovacantstalls.AsatNagsHead,thereare

threeloadingbaysavailableforservicinganddeliveriestothemarket.Thereis

notraderorcustomerparking.

4.59. Themarketispromotedthroughalivelyandwell-designedwebsitegivingdetails

ofitsstalls,openinghours,eventsandinformationforprospectivestallholders.7

ItisasuccessfulmarketandInotefromthewebsitethatithasbeenrepeatedly

praisedoverthelast12months:

i. Winnerofthe“BestSmallIndoorMarket”awardattheGreatBritish

MarketAwards2017;

ii. WinneroftheTimeOutLoveLondon,2016;

iii. Winnerofthe“WandsworthBusinessoftheYear”categoryand“Highly

Commended”inthe“BestIndependentRetailer”categoryatthe

WandsworthBusinessAwards2016.

4.60. TootingBroadwayMarket isalsoverysimilartoSevenSistersin itsmixof

stalls,whichinclude some freshproduce,clothing andhomeware stalls,although

thismarketalsolackstheservice-basedstalls inSevenSisters Market.The

operatorcurrentlycharges£70sqft,includingbusinessratesbutnotelectricity.

VAT isnotcharged.It hasnovacantstalls.Itisopensevendaysaweek.

4.61. The markethall isratherold andthereisaneedforinvestmentinthemediumto

longertermfuturebuttheneedisnothinglikeaspressingasitisfortheSeven

Sistersmarket. Therearetwoloadingbaysavailableforservicinganddeliveries

tothemarket.Thereisnotraderorcustomerparking.Themarketpromotes

itselfthrough aTwitteraccountwith1,600followers.Theaccount isveryactive

inpostingphotographs,eventdetails,reviewsandre-tweetingfollowers’poststo

createanimpressionofasuccessfulmarket.

7 https://tootingmarket.com/ accessedon1st June2017.

29

Table:ComparisonofMarketswithSevenSistersIndoorMarket

Market Licence

Fee/sqft

p.a.

VAT Average

unitsize

Days

Open

Servicesin

addition

Other

Seven

Sisters

£60 (av.) No 100sqft 6days Rentincludes

“servicecharge”

Electricityseparate

Investment

needed

Novacancies

NagsHead £138 No 64sqft 7days Electricityseparate Investment

needed

Fewvacancies

Wood

Green

£40 Yes 250sqft 7days Electricityseparate Novacancies

Tooting £55– £80 No 100sqft 7days Electricityseparate Novacancies

Tooting

Broadway

£70 No Unknown 7days Electricityseparate Novacancies

Businessrates

includedinrent

iv) RecommendationforaRiseinLicenceFees

4.62. Assetout above,inmyview,thecurrentlicencefeesarerelativelylowcompared

withwhatthemarket operator shouldbeabletochargeforamarketofthistype

andinthisprimelocation.Thesefeeswouldalsobeunsustainableinthefuture in

anyevent,giventhealmostcertainrequirementforsignificantinvestmentinthe

fabricofthebuilding intheneartomediumtermfuture.Anincreasefrom

£60/sqftand£64/sqftwouldthereforebeinevitable,regardlessofwhether

Grainger’sscheme takesplaceor not.

4.63. TheOrderScheme offersanundoubtedopportunitytomaintainandgrowthis

market,bothwhilstitisintheTemporaryMarketandwhenitreturnstotheNew

MarketArea.Amongotherfactors,theplannedimprovementstothequalityand

safetyofthebuiltenvironment oftheNewMarketAreawillbesignificantandare

verylikelytoproveofgreatbenefittotheMarket’sabilitytoattractvisitors.The

increasedemphasisonthepublicentrancesandtheimprovedsignagewill

certainlyattractadditionalfootfallcomparedwiththecurrentsituation

(discussedabove).Mr Beharrell’sProofprovidesdetailonhowthefrontage

designwill“provideahighdegreeofvisibilityforthemarketandtheopportunity

forextensivesignage” (para.4.5.4,also3.3and4.3.2; and seemyAppendix4).

4.64. FromthedrawingsandplansthatIhaveseen,theseimprovementsinthequality

ofthebuiltenvironment,signage,publicaccessandsoonwillalsoapplytothe

TemporaryMarket.

30

4.65. Indeed,theMarketiscurrentlysowell-concealedfromthecasualpasser-byandis

insuchclearneedofrefurbishing,thatanyimprovementstoitsvisibilityand

upkeepwouldbelikelytoattractmorecustomers.Asdiscussedabove,the

Market’sprimelocationrightoverabusyundergroundstationandnextto

numerousbusroutesisalmostentirelysquanderedatpresent;thepotentialfor

attractingmorecustomersisobvious.USMcametothesameconclusionin2008:

“thereislikelytobeverylittlepassingtrade... thatlimitstheeconomicimpactthat

themarketcanhaveforitstraders.Theywouldmakemoremoney,aswouldthe

manager,ifthereweremoreofaretailenvironment...created”(p.11).

4.66. Increases infootfallandcustomernumbersthrough thephysicalimprovements,

inadditiontothebusinessimprovementsbroughtaboutbytheroleoftheMarket

Facilitator (discussedbelow),willundoubtedlyincreaselevelsoftrade.Traders’

profitswouldthereforebelikelytorise.(IshouldnotethatIhavenotseen

figuresforanycurrentTraders’ turnoverorprofitlevels:thereisnoobligationon

Traderstoprovidethesetothemarketoperator).

4.67. AdvertisingtheMarket’smovetotheTemporaryMarketanditsreturntothe

NewMarketArea– forexamplethoughaplannedsocialmediacampaign– would

alsoattractnewcustomers.Asanexamplefrommyownexperience,an

unexpectedconsequenceoftherecentFlowerMarketrelocationatNewCovent

GardeninMarch2017 wasadramaticupsurgeinmembersofthepublic

attendingwhatwaspreviouslyapredominantlywholesalemarket,entirelydueto

mediaexposureandincreasedsocialactivity.IdealwithadvertisinginSection5.

4.68. WiththeTemporaryMarkettoensurecontinuityduringtheconstructionperiod

andthesubsequentrelocationtoapermanent,purpose-builthome, Grainger’s

proposalsdoeverythingpossible to secureanenhancedfutureforthe Market.

4.69. Onthisbasis,a modestrisein licencefeesforTraders wouldbetherefore entirely

reasonableinmyview.Theidealsituationwouldbetoraisethefeesandfixthem

throughoutthetworelocations untiltheNewMarketAreaiswell-establishedasa

thrivingmarketandIdiscusstheDDVobligationsonthisbelow(paras4.80-102).

4.70. Marketsarerarelystaticandtherewillinevitablybeadegreeof“churn”among

stallholdersoverthesetwo relocationsuntiltheMarketissettledintotheNew

MarketArea.AnynewtradersenteringtheTemporaryMarketortheNew

MarketAreawillhavetheirfeessetbytheMarketOperatorintheusualwayand

thesuccessorfailureofthosetraderscanallbegatheredasinvaluableevidence

ofwhatlicencefeestheNewMarket Areaunitscancommand.

4.71. By aroundtwoandhalfyearsintotheoccupationoftheNewMarketArea,the

MarketOperatorwillbewellplacedtoassesswhatlicencefeestheTraderscan

sustaininthenewcircumstancesoftheNewMarketArea.Itwillthenbeentirely

31

appropriatefortheMarketOperatortobereleasedfromthestructureoffixed

licencefeesappliedtotheoriginalMarket Tradersandtobeginsettingfeesat

whateverlevelstheNewMarketAreastallscommand.

4.72. Inmyexperienceofbothindoorand outdoormarkets,nofinancialinformationis

sharedbetweenthemarkettradersandthemanagementcompaniesorlandlords,

soalllicencefee-relateddecisionsaremadeontheperceivedsituation,anecdotal

evidenceandtheindividualoperator’sexperience ofthatspecificmarket.The

onlytrueindicatorsoftheviabilityofanymarketarewhethertherearetraders

whoarepayingtheirrent andthelevelsofvacantstalls.

4.73. Allofthemarketagreementsareshortterm(usually12months)andincludea

four weekbreakclause.If tradediminishestoasufficientlylowlevel,then

traderssimplywalkawayanditisnotworthwhilefortheoperatortopursue

defaultingtradersforunpaidrent,giventheinevitableadversepublicityand the

factthatitisveryunlikelythattheoperatorwouldeverrecoveranyunpaidrent.

4.74. Itisthereforeveryimportanttoemphasisethatsettingaviablerentistherefore

intheMarketOperator’sinterestsjustasmuchasitisintheTraders’.

4.75. Onereasonforsayingthattheriseinlicencefeesshouldbemodestisinorder to

allowTraderstoadjusttotheintroductionofVAT,whichisnotcurrentlycharged

intheMarket.IaminstructedthatthiswillbechargedintheTemporaryMarket

andtheNewMarketArea.

4.76. TheMarketFacilitatorshouldaddresswithindividualTraderstheiroptionsover

whethertoregisterforVATandmanagingVAT-relatedadministration.Itwillbe

vitalforindividualtraderstoconsiderwhethertoabsorbthecostofVATandtake

areductioninprofits, orwhethertoregisterforVATbuthavetopassonan

increaseinpricestotheircustomers.

4.77. ItismuchtoocomplicatedanexerciseforthisProoftoaddresstheissueofVAT

nowinrelationto thesituationsof individualTraders;itisenoughformetostate

thattheTraderswouldhaveoptionsastohowtheydealwithVATandthiswould

bepartoftheMarketFacilitator’sdiscussions.

4.78. AsIhaveexplainedabove,inmyviewitisessentiallyinevitablethatTraders

wouldhavetocopewiththeintroductionofVATontheirlicencefeesinthe

mediumtolongtermfuture,whethertheOrderSchemegoesaheadornot.So

whilstatleastsomeoftheTraders(thosewhocannotreclaimit)willtherefore

experienceanincreaseintheirbusinessexpenses,VATisinevitableinanyevent.

Itisalsoataxandnotariseinlicencefeesassuch.Inmyanalysisofthefigures

belowIhavethereforeexpressedlicencefeesas“£XplusVAT”.

32

4.79. Practicallyspeaking,itisthereforeimportanttoacknowledgethatVATwillbe

charged,sothatTraderscanprepareforthisincreaseintheirbusinessexpenses.

However,itshouldbenoted:

i. Thatthisincreasewas essentially inevitableandshouldnot beattributed

toGrainger ortheOrderSchemeperse;

ii. Theincreaseshouldnotbeoveremphasised;

iii. TheapplicationofVATisamajorreasonwhytheLicenceFees will

remainfixeduntil30monthsintotheNewMarketArea,assetoutbelow.

v) TheLicencesFeesObligationsintheDDV

4.80. The DDV isanenormousimprovementfromtheTraders’perspective,providing

absolutecertaintyonlicencefeesoverthecrucialperiodsandwell intotheNew

MarketArea,alongwithgenerousdiscountsfortheearlystagesofboth

relocations.ThiswillgreatlyassisttheTradersinestablishingtheirbusinessesin

theTemporaryMarketandtheNewMarketArea.

4.81. Schedule2oftheDDV(p.7)sets outtheLicenceFeesfortheTemporaryMarket

andtheNewMarketAreaindetailandforseveraldifferentsituations:

Licence Fee means the following licence fee which (in each case) isbasedonthecurrentaveragelicencefeeintheMarketbeing£60persqftor, if the opening of the Temporary Market is significantly delayedthroughnofault,actionoromissionof(orby)theDeveloper,suchotherlicence feeasmaybeagreed inwritingbetween theDeveloperand theCouncilPROVIDEDTHATeachlicencefeeshallbesubjecttoanincreaseoftwopercent(2%)perannumfor:

i. solongastheTemporaryMarketisinoperationinthecaseofeachAcceptedQualifyingTrader;and

ii. the first thirty (30) months from the opening of the NewMarket Area to the public in the case of each AcceptedQualifyingTemporaryMarketTrader:

33

TemporaryMarket

Nature/LocationofUnit LicenceFee(£/sqft)(excluding

VAT)

Mezzanine 35

ZoneA(asmarked'ZoneA'(forillustration

purposes)ondrawingnumber160176-3DR-CO-

00-DR-TN-0001P01appendedtothisDeed)

75

ZoneB(asmarked'ZoneB'(forillustration

purposes)ondrawingnumber160176-3DR-CO-

00-DR-TN-0001P01appendedtothisDeed)

65

Anyunitprovidingcateringservicestothepublic

(includingthepreparationoffoodonthe

premises)

80

NewMarketArea

Nature/LocationofUnit LicenceFee(£/ sqft)(excluding

VAT)

ZoneA(i.e.thoseunitsshadedblueondrawing

numberSK551RevAappendedtothisDeed)

75

ZoneB(i.e.thoseunitsshadedredondrawing

numberSK551RevAappendedtothisDeed)

65

Anyunitprovidingcateringservicestothepublic

(includingthepreparationofanyfoodonthe

premises)

80

4.82. I discussbelowinSection5howtheDDV categorisestheTradersandwhocomes

withinthecategoriesof“AcceptedQualifyingTrader”,“AcceptedQualifying

TemporaryMarketTrader”andsoon.HereIsimplydealwiththefiguresforthe

LicenceFees.

4.83. Ascanbeseenfromthedraftplans atAppendix 5,in boththeTemporaryMarket

andtheNewMarketArea“ZoneA”unitswillbepremiumunitswhichwillhave

thehighest levelsofexposureintheMarket.“ZoneB”unitswill befurtherfrom

theentrancesandwithoutanydirectexposuretothestreet;thelicencefeesare

correspondinglyslightlylower.

4.84. Asdiscussedindetailbelow,theTemporaryMarketwillbeintheredeveloped

ApexHouse anditslocationrightnexttothecurrentMarketisvitaltoensurethe

continuedsuccessoftheTemporaryMarket.ApexHouseisnotthesameshapeas

34

thecurrentMarket hall.Inordertoguaranteeaccommodationforallcurrent

TradersintheTemporaryMarketandanequivalentnetspaceof6,200sqft,itwill

benecessaryforsomeTraderstoberelocatedontoamezzaninefloor.

4.85. Asdiscussedbelow,theMarketFacilitatorwillworkwithindividualTraders

nearerthetimetoidentifywhichbusinessesrelylessoncasualcustomersandso

willbeleastaffectedbybeingonamezzaninefloor.Forexample,business

services(likelettingagencies,hairdressersormoneytransferagents) relyfarless

oncasualpassersthanjuicebarsandhotfood stalls.Itisareasonableand

appropriatemeasuretoofferasubstantialdiscountforbusinessesthatwillbe

locatedonthemezzaninefloor,tooffsetanyinitiallossofbusinessandtogivethe

businesstimetoadvertiseandbecomeestablishedintheTemporaryMarket

(therewillbenomezzaninefloorintheNewMarketArea).

4.86. Traderswho“provid[e]cateringservicestothepublic(includingthepreparation

ofanyfoodonthepremises)”willbeonaflatrateof£80.Iaminstructedthat

theseTraderswillallbe in primelocations,asthesebusinessesrelyheavilyon

casualpassingtrade,andwillnotbeonthemezzanine.Fromamarketoperator

pointofview,hotfoodstallsareverydesirablenearentrancesorathighlyvisible

pointsinamarket,astheyareverypopularandservetodrawincustomers.Iam

thereforesatisfiedthattherewillbenoTradersprovidingfoodonthemezzanine

level(oralessaccessiblelocation) andyetstillpayingahigherrateof£80.

4.87. Assetoutabove,currentLicenceFeesare£60/sqft for“internal” unitsand

£64/sqftfor“front”units.

4.88. OnmovingtotheTemporaryMarketthefirstthreemonthswillbea“licencefee-

freeperiod”(see“Offer”,Sch.2,p. 9, DDV),duringwhichtimetherewillbenorent

chargedto“AcceptedQualifyingTraders”(thoseTraderswhoareintheMarket

forthreemonthsbeforetheClosureNotice andaccepttheofferofrelocationto

theTemporaryMarket:see“QualifyingTrader”,Sch.2, p. 9, DDVandbelow).

4.89. Afterthefirstthreemonthslicencefee-freeperiod,thefollowinglicencefeeswill

thenbecharged:

i. Tradersonthemezzaninewillpay£35/sqftp.a.;

ii. TradersinZoneAwillpay£75/sqftp.a.;

iii. TradersinZoneBwillpay£65/sqftp.a.;

iv. Caterers(whowillbeinprimelocations)willpay£80/sqftp.a.

(seep.7 DDV)

4.90. A2%increaseperyearwillbeappliedtothesefees.Assumingabuildtimeon the

NewMarketAreaoftwoandahalfyears,this meansthatthelicencefeeswill

increaseby2%twicewhilsttheTemporaryMarketisinoperation.

35

4.91. OnrelocationtotheNewMarketArea, traderswhohadbeenintheTemporary

MarketforoverthreemonthsbythedateoftheNewMarketAreaScheme

(“QualifyingTemporaryMarketTraders”,Sch.2,p.9 DDV)willpaythefixed

licencefees discountedby30%:

i. TradersinZoneAwillpay£52.50/sqftp.a.;

ii. TradersinZoneBwillpay£45.50/sqftp.a.;

iii. Catererswillpay£56/sqftp.a.

4.92. Thesefeeswillapplyforthefirst18monthsintheNewMarketArea.Again,a2%

increasewillbeappliedoneveryanniversary oftheNewMarketAreamoveand

theapplicationofthesenewLicenceFees.After18months,the30%discountwill

expireandallLicenceFeeswillreverttotheLicenceFeesgiveninthetable:

i. TradersinZoneAwillpay£75/sqftp.a.;

ii. TradersinZoneBwillpay£65/sqftp.a.;

iii. Caterers(whowillbeinprimelocations)willpay£80/sqftp.a.

4.93. These LicenceFees willthencontinueforanother12months,makingatotalof

30monthsintotheNewMarketAreawhichisgovernedbytheDDV.

4.94. Below Ipresenttwo tables showingwhatthesefeeswouldmeaninpracticefor

theseven mostcommoncategoriesofTraders:

i. Tradersin “internalunits”on£60/sqftwhomovetoZoneBforboththe

TemporaryMarketandtheNewMarketArea;

ii. Tradersin“internalunits”on£60/sqftwhomovetoZoneAforboththe

TemporaryMarketandtheNewMarketArea;

iii. Tradersin“frontunits”on£64/sqftwhomovetoZoneAforboththe

TemporaryMarketandtheNewMarket Area;

iv. CateringTradersin“internal”units;

v. CateringTradersin“front”units;

vi. Tradersin“internal”units on£60/sqftwhomovetotheTemporary

MarketmezzanineandthenZoneAintheNewMarketArea;

vii. Tradersin“internal”unitson£60/sqftwhomovetotheTemporary

MarketmezzanineandthenZoneBintheNewMarketArea.

4.95. IhavecalculatedwhattherentwouldbepersqftafterthefiveyearsoftheDDV

licencefeescheme, includingthe2%annualincreases andoneachalterationto

thefees.Ihavecomparedthiswithfiveyearsunderthecurrentrentsof£60and

£64/sqft,plusa2%annualincrease,andcalculatedthepercentagedifferences

36

betweenwhatTraderswouldpayoncurrentrentsandunderthesevendifferent

scenariosinGrainger’sscheme.Table1excludesVATandTable2includesVAT.

4.96. WhenmakingthesecalculationsIhavemadethefollowingassumptions:

i. Thecurrentfeesof£60/sqftand£64/sqftincreaseby2%p.a.;

ii. Ihaveignoredthetwoprojected10%increasesin2017and2018

announcedbyMAMSSL;

iii. NoVATisaddedtothecurrentfees,eventhoughIstillbelieve thatVAT

will beintroducedonTraders’fees evenwithoutGrainger’sscheme;

iv. A movetotheTemporaryMarketof1stJanuary2018(forsimplicity);

v. TemporaryMarketfeesthereforebeginon1st April2018,andthe2%

increasesthereforeoccuron1st April2019and2020;

vi. TwoandahalfyearsintheTemporaryMarketbeforethemovetothe

NewMarketAreaon1st June2020;

vii. The30%discountonNewMarketAreafeeslastsfrom1st June2020until

30th November2021,witha2%increaseoccurringon1st June2021;

viii. ThefullNewMarketAreafeescommenceon1st December2021andthe

first2%increaseonthosefeesoccurson1st December2022 beforethe

expiryofthefixedfeeregimeon1st January2023.

37

Table1:LicenceFeesacrosstheFiveYearPeriod(excludingVAT)

TOTAL/SQFTTOTAL/

100 SQFTSTALL

PERCENTAGE

DIFFERENCE

CurrentInternal £317.78 £31,777.71

CurrentFront £338.89 £33,888.77

i.InternaltoZoneB £287.42 £28,741.83 -9.55%

ii.InternaltoZoneA £331.58 £33,157.50 4.34%

iii.FrontUnitstoZoneA £331.59 £33,158.50 -2.16%

iv.Internal to Catering £353.67 £35,366.83 11.29%

v.FronttoCatering £353.67 £35,366.83 4.36%

vi.InternaltoT.M.

MezzaninetoZoneA£243.89 £24,388.50 -30.26%

vii.InternaltoT.M.

MezzaninetoZoneB£221.62 £22,161.50 -23.25%

Table2:LicenceFeesacrosstheFiveYearPeriod(includingVAT)

TOTAL/SQFTTOTAL/

100 SQFTSTALL

PERCENTAGE

DIFFERENCE

CurrentInternal £317.78 £31,777.71

CurrentFront £338.89 £33,888.77

i.InternaltoZoneB £344.90 £34,490.20 8.54%

ii.InternaltoZoneA £397.89 £39,789.00 25.21%

iii.FrontUnitstoZoneA £397.90 £39,790.20 17.41%

iv.InternaltoCatering £424.40 £42,440.20 33.55%

v.FronttoCatering £424.40 £42,440.20 25.23%

vi.InternaltoT.M.

MezzaninetoZoneA£265.94 £26,593.80 -16.31%

vii.InternaltoT.M.

MezzaninetoZoneB£292.66 £29,266.20 -7.90%

4.97. IhavesetoutmydetailedcalculationsforTable1andTable2atAppendix6.

38

4.98. Iacknowledgethatallthesecalculationsuseasthe“base”figuretheaveragerents

currentlypaidforthe“internal”and“front”units.Therewill,ofcourse,besome

differencesbetweenwhatindividualTraderscurrentlypayandtheaverage

figure.Againstthat,itisclearthatlicencefeesintheMarketare,inanyevent,on

anupwardtrajectoryand,howevermattersproceedfromhere,anyonepaying

“belowaverage”licencefeescanexpecttoseematerialincreasesintheirrentto

contributefairlytowardsthecostsoftheessentialinvestmentintheMarket.

4.99. Thus,evenwhencomparingcurrentrentstotheproposedfeesincludingVAT,

Table 2showsthatthelargestincreaseoverthefiveyearsoffixedfeesis33.55%

forthoseTradersin“internal”unitswithcateringbusinesses,followedbyTraders

in“front”unitswithcateringbusinesseswitha25.23%increaseoverfiveyears.

Anincreaseof33.55%overfiveyearsisanaverageincreaseof6.71%peryear.It

canalsobeseenthat,evenincludingVAT,twocategoriesofTraderswillpayless

thanundercurrentrents (thoseininternalunitswhogotoZoneAorZoneBvia

theTemporaryMarketmezzanine).

4.100. IfonesetsVATtooneside,usingthefiguresinTable1,fouroutoftheseven

categorieswillpaylessthantheircurrentrates.Tradersininternalunitswhogo

toZoneAviatheTemporaryMarketmezzaninewillpay30.26%lessoverthefive

yearsthanatpresent andthose whomovetoZone Bviathemezzaninewillpay

23.25%less.

4.101. Further,onthebasisofthefigurescalculatedabove, underGrainger’s

schemetheTraderswillbepayinglowerlicencefeesthanunderthe“donothing”

option,the“makedo”optionortheWCCscheme(seeparas4.26;4.34;4.42-43):

i. “Donothing”:internalunitsatbetween£75– £80/sqftand“front”units

ataround£100/sqft;

ii. “Makedo”:£85/sqft(plusVAT)for“internal”unitsand£112/sqft(plus

VAT)for“front”units;

iii. “WCCscheme”:usingthefixedDDVfiguresasaminimum,theWCC

schememakesaloss.Itisthereforecertain thatthelicencefeeswould

havetobehigherthanthoseinthefixedDDVscheme,althoughIam

unabletosayhowmuchhighergiven thelackofdetailontheintended

businessmodelandtheintentionnottouseamarketoperator.

4.102. Finally,InotethattheNewMarketAreaSchememustinclude “anobligation

tosetlicencefeesintheNewMarketAreaatalevelthatisconsistentwiththe

Council'spolicyobjectivetoattractandpromotelocalindependenttraders”(Sch.

2,p.9,DDV).ThisrequiresGraingertoensurethattheMarketOperatordoesnot

setfeeslikelytodriveoutTradersaftertheLicenceFee periodoffiveyearsis

39

over.IrefertoMsJohnson’sProof fordetailsoftheCouncil’spolicieswhichare

relevanttoattractingandpromotinglocalindependenttraders.

vi) Analysis oftheLicenceFeesStructure

4.103. Inmyview, theLicenceFees acrossboth relocations andfor30monthsinto

theNewMarketArea, plus thethreemonths’LicenceFee-freeperiodanda30%

reductionforthefirst18monthsoftheNewMarketArea,willbeofenormous

valuetotheTraders.Inthefirstplace,itprovidesfiveyearsofcertainty

regardingtheirmostsignificantbusinessexpense;thisisvaluableknowledgefor

anybusiness.Inthesecondplace,itprovidesacushionforanyTraderswho

experienceanydropinturnoverduetodisruptioncausedbytheMarket’s

relocationorthemovementoftheirunitwithintheMarket.Thirdly,this

commitmentprovidesreassurancethattheywill notbesubjectedtomuchhigher

rentstopayfortheirhugelyimprovedtradingconditions duringthosefirstfive

years.

4.104. Unsurprisingly,answerstothe2012BusinessSurveyofTradersinthe

Marketdemonstratedthataffordablelicencefeeswereamajorconcern.Question

14 asked“Doyouhaveanyadditionalcommentsontheproposedmeasuresfor

permanentrelocationofthemarket?”andanswersincluded:

i. “Puttheplacenicer,moreclassy,butkeepingtherentsaffordable”;

ii. “Wecouldkeepourbusinesskeeps[sic]havingthesamespace,andkeep

thesamerent”;

iii. “Keepsamerent”;

iv. “…Itlooksthatitwillbeforupperclasspeoplewhowillbeabletoafford

itandnoforfor[sic]theworkingclasspeoplethatworkshere[sic]and

haveasenseofcommunityhelpingeachother”;

v. “Betterconditions,andaffordable”;

vi. “Affordability.”

4.105. Question15asked“Whatadditionalmeasures,ifany,doyoufeelwillbe

necessarysothatyourbusinesscancontinuetooperateinthelongerterm?”and

answersincluded:

i. “…allowthebusuness[sic]tomaintainthesameprices,sosameclients

canaffordit”;

ii. “Wewanttogetguarantyofsamesizesofshopsandsamerentrate”;

iii. “Affordableandgoodlocation”;

40

iv. “[Worriedit]willbemoreexpensive”.

4.106. TheTraderscanthereforenowbesecureintheknowledgethattheywill

notbedeliberatelypricedoutoftheNewMarketAreainordertomakewayfora

differentkindofmarket.ThisshouldgoalongwaytocalmingTraders’fearsand

allowthemtofocusontheuniqueandexcitingopportunitiesfortheirbusinesses.

4.107. The offerofathreemonthlicencefee-freeperiod intheTemporaryMarket,

alongwiththebusinessassistancetobeprovidedbytheMarketFacilitator, isa

verygoodoffer.Asdescribedbelow,therelocationoftheCoventGardenFlower

Marketincludedanidenticalrent-freeperiod.Easingthefinancialpressureson

tradersbysuspendingrentforashortperiodhaspreviouslybeenfound tobeof

greatassistancewhensettlingtradersintoanewtemporarylocation.Similarly,a

30%reductionfor18monthsonaknownandachievablerentisafairreduction

fora reasonableperiodtoallowtraderstore-establishthemselvesinanew

permanentlocation.

4.108. Althoughthere is nofigurethatcouldguarantee theTemporaryMarket’sor

NewMarketArea’ssuccess,fixingtheLicenceFees tothese figures isthesafest

reasonableoption.

4.109. Ascanbeseenfromthese calculations,thehighestincreasewillbeborneby

cateringTradersof33.55%overfiveyears,oranaverageof6.71%p.a.Istress

thatthisappliestocaterersonly;runningacateringbusinessinamarketisa

proventradewhichthereforeoftenattractsapremiumin rentandIamconfident

thatthisgroupwillbeabletomanageanincreaseinfeesonthisscale.Further,in

myview,itisalsomorethanlikelythatthey– andthefour othergroupsof

Traderswiththeirsmallerincreases– will beabletocopewiththeselicencefees

because:

i. Theseincreaseswillbestructuredoveraperiodofaroundfiveyears–

assumingatleasttwoandahalfyearsintheTemporaryMarketwhilst

theNewMarketAreaisbuilt– withthreemonthsfee-freeandan18

months30%discount.TherewillthereforebetimeforTraderstoadjust.

ii. TheTemporaryMarketandtheNewMarketAreawillbothbeopenfor

tradingonSunday, addinganother52profitabletradingdaysperyear.

iii. Theimprovementsinbuiltenvironment,signage,visibility,advertising

andbusinessassistancefromtheMarketFacilitator,inboththe

TemporaryMarketandtheNewMarketArea,areverylikelytoattract

newcustomersandincreasetradelevels andtheTraders’profits.

41

iv. Tradershavealreadyweathered asignificantriseof52.25%for

“internal”units(andIassumethat“front”units’licencefeeshavealso

risen)between2008and2015,withnoneoftheanticipatedbenefitsof

theGraingerscheme.Inaddition,therehavebeennolicencefee

increasessinceatleast2015:Traderscannot realisticallyexpectto

remainatthesamelicencefeesindefinitely.

v. ThesepredeterminedLicenceFeesareverymuchinlinewithfees

chargedinotherLondonmarkets(assetoutintheTableabove).

4.110. AsIhavementioned,noTradershaveprovidedfiguresforturnoveror

profitlevels (theyarenotobligedto).Nevertheless,Iamasconfidentasitis

possibletobethattheTraderswillnotbepricedoutoftheNewMarketAreaand

thatasmanyaswanttocontinuetradingintheTemporaryMarketandtheNew

MarketAreawillbeabletoaffordit.

4.111. Afterthefirst30monthsintheNewMarketArea,theMarketOperatorwill

setthelicencefeesforallTraders.AsImentionedabove,determiningwhatthose

feesshouldbewillhavebeenmadeeasierbythepassageoftime: twoandahalf

yearsintotheNewMarketArea’soperationwillhavegivenittimetoestablishits

own marketvalue.Traderscomeandgoinanymarketthroughanaturalprocess

of“churn”, asthishappenstheMarketOperatorwillgainexperienceofwhatrents

itispossibletochargeforunitsintheNewMarketArea.Again,itisvitalto

rememberthatitisintheMarketOperator’s intereststoonlychargewhat

Traderscanaffordtopay.

4.112. AsInotedabove,Traders shouldalsobecomfortedby Grainger’sobligation

tosetlicencefeesconsistentwiththeCouncil'spolicyobjectivetoattractand

promotelocalindependenttraders,whichextendsbeyondthe LicenceFeeperiod

offiveyearsandprovidespermanentprotection.

4.113. Inmyview,thissetofLicenceFeecommitmentsfortheperiodfromthe

TemporaryMarketrelocationuntil longafterthemovetotheNewMarketAreais

apowerfulandverywelcomereassurancetoTradersthatthisrelocationprocess

haseverychanceofensuringafull,thrivingandsuccessfulNewMarketArea.

vii) FeesforNewTradersinTemporaryMarketorNewMarketArea

4.114. IntermsofanynewincomingtraderwhotakesalicenceforaTemporary

Marketunitafteritbeginsoperating,theywillhavetheirlicencefeessetbythe

MarketOperatorafternegotiationsinthenormalway.Therecanonlybeonerent

riseperyearforanyTemporaryMarkettrader,irrespectiveofwhentheybegan

tradingfromtheTemporaryMarket(para2.9,Sch.3,DDV).AsIhavediscussed,

anyprofessionaloperatorwillnotchargemorethanthemarketcantolerate;itis

42

betteruseofresourcestoinvestinthecurrenttradersinanymarket,ratherthan

repeatedlyseekingnewtraders.Havingtheoperatorsetnewtraders’licencefees

thereforedoesnotposeanyrisktothesuccessoftheTemporaryMarket.Inany

event,itwouldnotbereasonableforGraingertolimitlicencefeeschargeableby

theMarketOperatorfornewtradersarrivingafterrelocation;thisisa

commercialmatterfornegotiationwiththetrader.Limitingtheoperatortoone

rentriseperyearisinlinewithmyexperiencesofothermarkets.

4.115. OntherelocationtotheNewMarketArea,thoseLicenceFeesandthe30%

reductionwillapplytoall“QualifyingTemporaryMarketTraders”(thosewho

havebeentradingfromtheTemporaryMarketforthethreemonthsbeforethe

NewMarketAreaSchemeissubmitted;see“QualifyingTemporaryMarket

Trader”,Sch.2,p.9 DDVanddiscussedbelow).Graingerhasadiscretiontomake

anynon-QualifyingTemporaryMarketTraderanidenticalofferforafixed

LicenceFeeand30%discount(para7.10, Sch.3,DDV)butthereisno

requirementtodoso.

4.116. AswiththeTemporaryMarket,anynewincomingtraderwhotakesaNew

MarketArealicenceafterthefinalrelocationwillhavetheirlicencefeessetbythe

MarketOperatoraftertheusualprocessofnegotiationandonlyhaveonerent

riseperyear(para. 7.7, Sch.3,DDV).TheMarketOperatorwillthereforebein

controlofthelicencefees,saveforGrainger’sobligationtoensurethatNew

MarketArealicencefeesareatalevel“consistentwiththeCouncil'spolicy

objectivetoattractandpromotelocalindependenttraders”(see“NewMarket

AreaScheme”,Sch.2,p.9, DDV).

4.117. TheCouncilandGraingerthereforeretainoversightofthefeeschargedby

theOperator, evenafterthefirst30monthsintheNewMarketArea,whilstthe

specificfeelevelsarefortheOperatorhimself.Thisis entirelyreasonableinmy

view,inprotectingthecurrentandanyincomingTraderswhilstnotsettingthe

exactlicencefeeschargeablebytheOperatortonewtraders.

43

SECTION5:Grainger’sObligationsunderthes.106AgreementandDraftDeed

ofVariation

5.1. InthissectionIconsiderthe undertakings givenbyGraingerinthes.106

agreementwiththeCouncil(“thes.106”)andintheDraftDeedofVariation

(“DDV”).ThepurposeofthissectionoftheProof istoassesswhetherthe

undertakingsaresufficienttoprovideallreasonableassurancesthatasmany

Tradersaspossible fromthecurrentMarketwillsuccessfullynavigatethetwo

transitions:first,fromtheMarkettotheTemporaryMarket and,second,fromthe

TemporaryMarkettoathrivingandbuoyantNewMarketArea.

5.2. Insummary,inmyexperiencethelevelsofsupportprovidedbyGraingertothe

TradersinrelocatingtotheNewMarketAreaareunprecedentedintheir

thoroughnessandcommitmenttodeliveringtheNewMarketArea.

5.3. Iwillexaminethefollowingissues:

i) TheObligationtoProvidethe NewMarketArea

ii) TheMarketFacilitator

iii) TheNeedforaTemporaryMarket

iv) TheLocationoftheTemporaryMarket

v) TheTotalSizeoftheTemporaryMarket

vi) ClosingtheCurrentMarket

vii) TheOffertorelocatetotheTemporaryMarket

a. TheDefinitionofa“QualifyingTrader”

b. TheTraders’PeriodforConsideringtheOffer

c. TheReleaseSum

d. TheContentoftheRelocationOffer

viii) AdvertisingtheTemporaryMarketandtheNewMarketArea

ix) TheSizeoftheNewMarketArea

x) TheLayoutoftheNewMarketArea

xi) The NewMarketArea Scheme

a. TheDefinitionofa“QualifyingTemporaryMarketTrader”

b. ThePeriodforConsideringtheOffer

c. Traderswhodonotrelocate

d. TheNewMarketAreaOffer

xii) ClosingtheTemporaryMarket

xiii) OtherMatters

i) TheObligationtoProvidetheNewMarket Area

5.4. GraingerhascommittedtoprovidingaNewMarketAreaasanintegralpartofthe

DevelopmentwhichhasbeengivenplanningpermissionbytheCouncil.The

“NewMarketArea”isdefinedintheDDV as“thatpartofthegroundfloorofthe

44

Developmentintendingtocompriseanetinternalareaofat leasteighthundred

andsixtyfivesquaremetres(865 sqm)andtobesuitableforlocalindependent

tradersbyway ofareplacementoftheMarket”(Sch.2,p.8,DDV).

5.5. BelowIsetoutthe twosituationsinwhichGrainger’sobligationtoprovidethe

NewMarketAreacouldfallawayunderthepresents.106andDDV.Inmyview,

neitherislikelytoeverarise andtheTradersaresuitablyprotectediftheydo

arise,asIwillnowexplain.

5.6. Thefirstsituation,underwhichGraingermightnotbeobligedtoprovidetheNew

MarketAreaisthatthe“MarketCondition”mustbefulfilled; otherwisethereisno

“requirementtoenterintotheMarketLeaseorprovidetheNewMarketArea”

(para.3.3(a), Sch.3, DDV).

5.7. FulfillingtheMarketConditionmeansthat“nolater than12monthsbefore

PracticalCompletion”oftheDevelopment,Graingermustreceiveanofferfroma

“MarketOperator” toenterintothe“MarketLease”toruntheNewMarketArea

(orabindingandunconditionalagreementtoenterit)(Sch.2 p.8, DDV).

5.8. UndertheDDV,Graingercommitstousing“ReasonableEndeavourstoappoint

theMarketOperator”(para.3.2,Sch.3;“ReasonableEndeavours”,Sch.2,p.9

DDV).“MarketOperator”is“anexperiencedindoormarketoperatorableto

demonstrateasufficienttrackrecordinthesuccessfulmanagementofindoor

marketsand whoisapprovedby theDeveloper”(Sch.2,p.8, DDV).“Market

Lease”isdefinedasa“LeaseoftheNewMarketAreatobeenteredintobetween

theDeveloperand theMarketOperator” (Sch.2,p.8, DDV),incorporatingthe

HeadsofTermsinSchedule8 andwithregardtoGrainger’sobligationsunderthe

DDV.TheseHeadsofTermsspecify thattheOperatorwouldberesponsiblefor

thecostoffittingout:theNewMarketAreawouldbeprovidedto“shell

condition”.

5.9. OnceGraingerhasreceivedsuchanofferfromaMarketOperator,fulfillingthe

MarketCondition,Graingermustthenuse“reasonableendeavours” toenterinto

theMarketLease(para.3.3,Sch.3,DDV).

5.10. Thesecondsituation, whenGrainger’sobligationtoprovidetheNewMarketArea

mightfallawayisif,despiteanofferfromaMarketOperator, thereisneithera

signedMarketLease noranagreementtoenterinto it bysixmonthsbefore

PracticalCompletion.Again,inthissituation,Graingerisnotrequiredtoprovide

theNewMarketAreaorenterintoaMarketLease(para.3.3(b),Sch.3,DDV).

5.11. ThereisnorequirementtoappointtheMarketOperatororagreetoenterintothe

MarketLeasebeforetheTemporaryMarketisopened.

5.12. AstheMarketisfullyoccupiedatpresentandtheTemporaryMarketwillopen

45

fullylet,oratleastclosetofullylet, Iamconfidentthattheimprovedpremises,

businesssupportandmarketingwillimprovetradingconditions.Thiswillresult

inabuoyantTemporaryMarket andanattractivepropositionforanoperator

consideringwhether toenterintoanagreementfortheNewMarketArea.

5.13. Inmyview,itisveryunlikely thatGraingerwouldnotreceiveanofferfroma

suitableMarketOperatortooperatethenewMarketArea.Grainger’s

commitmenttouse“reasonableendeavours”toappointaMarketOperatorisa

usefulandhelpfulobligation.ThisshouldgivecomforttoTradersthatGrainger’s

commitmenttoasuccessfulNewMarketAreaissincereandthatthe

arrangementsformanagingthisstageofidentifyinganewMarketOperatorare

reasonableandsufficient.ThereisthereforeonlyaverylowriskthattheMarket

Conditionwouldnotbefulfilled.

5.14. Similarly,thereisonlyaverylowriskthatthesecondsituationwouldoccur– that

GraingerwouldfailtoenterintoaMarketLeasewithaMarketOperatorbysix

monthsbeforePracticalCompletion.

5.15. ThesuccessoftheTemporaryMarketwillbeafactorinhoweagerornota

MarketOperatorwouldbetosignaleasefortheNewMarketArea.Ifthe

TemporaryMarkethasbeentradingwellandisatcapacity plusawaitinglist,

thenaMarketOperatorismorelikelytobekeentotakeonaleasefortheNew

MarketArea,withtheprospectofafullandvibrantmarket.IftheTemporary

MarketwastradingparticularlybadlythentheprospectoftheNewMarketArea

mightbecomelessattractiveand theremaybedifficultiesinidentifyinga

companywillingtosign theNewMarketArealease.However,given thecurrent

fulloccupationoftheMarket pluswaitinglist,thelevelsofsupportforTradersin

theDDVandthecompetitiveTemporaryMarketLicenceFeessetbyGrainger,

thereiseveryreasontothinkthatthe TemporaryMarketwillbeasuccess.

5.16. Inmyview,GraingerwillnothavedifficultyinappointingaMarketOperator:the

proposedHeadsofTermsforthecontractwiththe MarketOperator(Sch.8,

s.106)arereasonableandanyrealisticoperatorwouldfindthemattractive.

5.17. IaminstructedthatitisverylikelythatMAMSSL,thecurrentoperator,iswilling

tocontinueactingasMarketOperatorfortheNewMarketArea.MAMSSLhas

writtenGraingeraletterexpressingitsinterestinconcludingtheMarketLease

andIaminstructedthatnegotiationsarealreadywellunderway(seeletter

appendedtoMrKiddle’sProof).Itisthereforehighlylikelythat theMarket

Operator fortheNewMarketAreahasalreadybeenidentified.

5.18. Inanyevent,if theTraderseverbecameconcernedthattheMarketConditionor

theMarketLeasewillnotbefulfilledandthattheNewMarketAreaisinjeopardy,

theTraderscould nominateacompanytobetheMarketOperator.TheDDV

46

providesthattheMarketOperatorcouldbe“nominatedbyanyotherorganisation

orindividual”(see “MarketCondition”,Sch.2,p.8,DDV).Thisshouldprovide

comfortthatTraderscantakesteps topreventtheMarketfrombeing

permanentlyclosedbecauseGraingercouldnotagreeaMarketLease.

5.19. Finally,InotethattheobligationonGraingertoprovidetheTemporaryMarketis

separate totheneedtofindaMarketOperatorfortheleaseoftheNewMarket

Area.EvenifGraingercannotfindaMarketOperatorfortheNewMarketArea,

GraingerstillhastoprovidetheTemporaryMarketinthemeantime,sothe

Traders’immediatefutureissecured.

5.20. Inmyview,theobligationsprovidedbyGraingerinthes.106andDDV are

sufficientandreasonabletoprotecttheTraders’interestsandgivereasonable

assurancethatthisstageoftheprocesswillsucceed.Traderscanthereforebe

confidentthattheirinterestsareprotected.

ii) TheMarketFacilitator

5.21. HereIexamine theroleof“MarketFacilitator”assetoutinparagraph2.1,Sch.3

oftheDDVandhowitislikelytoassistwiththerelocationprocessfortheMarket.

Ifurtheraddressfacetsoftherole belowastheybecomerelevant.

5.22. The“MarketFacilitator”isdefined as“Quarterbridgeof2WestStockwellStreet”

(Sch.2,p.8,DDV).QuarterbridgeLtd isasistercompanytoMAMSSL(thecurrent

marketoperator)andtheMarketFacilitatorwillbethesameindividual asthe

marketoperator.IaminstructedthatGraingerwillmeetQuarterbridge’sfees

incurredinperformingtheseDDVobligations(suchasadvertisingtheMarket).I

amsatisfiedthattheseobligationswillbecarriedoutandtoanappropriate

standard. Idonotanticipatethatanyissueswillariseasaresultofthesame

individualbeingboththeMarketOperatorandtheMarketFacilitator;Ibelieve

that theattentionrequiredbytheFacilitatorrolewillbedelivered.Therewas

alwaysgoingtobesignificantoverlapbetweenthe two roles;itmaybebeneficial

thatthesameindividualperformsbothroles,asthe Facilitatorcould guarantee

thedelivery,asOperator, ofanynegotiations(suchasfitoutrequirements).

5.23. TheMarketFacilitatorhasaspecificobligationto“promotetheinterestsofnon-

EnglishspeakingtradersintheTemporaryMarketandtheNewMarketArea”.

TheMarketcurrentlyhasabilingualmanagerwhospeaksbothSpanishand

English;thisisessentialfor ensuringclearlinesofcommunicationbetweennon-

EnglishspeakingTraders andtheoperatorduringtherelocations.Information

abouttherelocationsneedstobeeffectivelycommunicatedandtherewillbe

issuesrequiringnegotiationandcompromise.Goodcommunicationwillbevital

tomaintaininggoodandeffectiverelationshipsandeasingtensionsduringa

periodofchange.

47

5.24. ThemostimportantroleoftheMarketFacilitator,apartfromensuringthese

communicationchannels,willbefindingamethodofharnessingthestrengthof

theethnicatmosphereandappealoftheseTradersasawhole andtappingeven

furtherintothepoolofcurrentand potentialcustomersattractedbythesocial,

culturalandcommercialpackageofferedbytheMarket.

5.25. Therearemarketswhichmakeafeatureoutoftheirethnicorcultural

background butIhavenotbeenabletoidentifyanyindoormarketswhichmake

similaruseoftheirbackgroundasamarketingdevice.Thereareindoormarkets

whicharepre-dominantlymadeupofoneethnicgrouporanother– forexample,

WoodGreenhasahighproportionofethnically Asiantraders.Thisisnot

followedthrough,however,intermsofmarketingthisgroup oftradersasan

“AsianMarket”withauniquesellingproposition(“USP”)linkedtoAsianculture.

5.26. Therearethewell-knownexamplesofoutdoorandtravellingFrench,Italianand

Germanmarketswhichdoexploittheirethnicintegrity aspartoftheirUSP

throughavarietyofmethods.Examplesincludecommonthemesacrossthe

marketstalls(suchastheGermanic-style,ski-resort-likehutsoftheseasonal

GermanChristmasmarketontheSouthBank),orintherangeofproductson

offer,orthetraders’backgrounds(likethefarmers’marketswhere mosttraders

aresellingtheirownfreshproduce).Tradersinthesekindsofmarketshave

identifiedtheirgroup’sUSP andtakenstepstoenhancethispotentialto

differentiatethemselvesfromothermarketsandincreasetheirattractivenessand

interesttocustomers.Advertisingreflectsthisaspectofthemarket’sidentityand

tradersarerecruitedandencouragedtoremainwithaneyetobolsteringand

improvingthemarket’sculturalsellingpoint.

5.27. ThereisanopportunityfortheSevenSisters Markettoapplytheseprinciples

fromthesemarketsandharnessitsethnicintegritytoitsownadvantage,soasto

increaseits appealbothtomembersoftheLatin-Americancommunityandmore

broadly.TheroleoftheMarketFacilitatorshouldbeusedtoexplorethis

opportunitywiththeTraders.

5.28. Aspartoftheobligationto“provideappropriate businesssupportandadviceto”

TradersandothersworkingintheMarket,IwouldexpecttheMarketFacilitator

toworkwitheachindividualTraderinordertomakesuretheyunderstandhow

topreparefortherelocation.Inparticular,theMarketFacilitatorneedsto

addresshowtheindividualcanmovehisorherbusinesssoastokeepclosuretoa

minimum.Thisisofparticularsignificanceascashflowisextremelyimportantto

Tradersandmustbemaintainedandprotectedasfaraspossible.Iwouldexpect

theMarketFacilitatortomakesureeachTraderhasanindividually-tailored

movingplan;manyofthefactorswillbegenerictoallbutsome(suchasthecafés)

willrequiremuchmoredetail.

48

5.29. Anypro-active,professionalmarketoperatorwillprovidebusinesssupportto

newtraders (asrequiredbypara.2.1(b),Sch.3,DDV)andtheMarketFacilitator’s

previousundertakingsandexperiencewillprovidethetemplatesforthiskindof

support.IwouldexpecttheMarketFacilitatortocontinueandbuildonany

previoussuccessfulinitiativesthattheyhaveusedtosupportnewtraders

enteringtheirmarkets.

5.30. Itisgoodpracticeforfacilitatorsandmarketoperatorstouseresourcestobuild

relationshipswithexistingtraderswithaviewtokeepingthem,ratherthan

constantlyseektoreplacetraders.Vacantstalls inamarketcreateariskof

stagnationordecline.Fillingvoidsastheyarise becomescrucialfortheoverall

well-beingofthemarketandallpartiesinvolved,inwhichcasesupportinganew

traderbenefitsallparties.

5.31. TheobligationontheMarketFacilitatortoassistlocalindependenttraders

interestedintradingfromavacantstallin either theTemporaryMarketorNew

MarketAreaisthereforesensible.ItstandstobenefitthecurrentTraders,inthat

theMarketwouldremainfullandmaintainmomentum,tothebenefitofall.

5.32. Inmyview,theobligationstoappointandprocurethattheMarketFacilitator

providestheadviceandsupportsetoutabovearesensible and appropriate.The

overallobjectiveoftheMarketFacilitatoris“maximisingthenumberofTraders

andotherindependentlocaltraderswhoelecttotradefromtheTemporary

MarketandtheNewMarketArea.”Iamsatisfiedthatthecurrentobligationsin

theDDV,theMarketFacilitatorroleandtheindividualappointedwillassist

considerablywithachievingthatobjective.

iii) The Needfora TemporaryMarket

5.33. TheTemporaryMarketistobetheinterimlocationfortheMarketwhilsttheNew

MarketAreaisbeingconstructed,avoidingtheneedtoshuttheMarketduringthe

constructionoftheNewMarketArea.

5.34. IntheDDVtheTemporaryMarketisdefinedas

“atemporarymarket(havinganetinternalareaofnolessthaneighthundred and sixty five squaremetres (865 sqm)) to be provided inpart of the ground floor of the property known as Apex House asshownondrawingnumber160176-3DR-CO-00-DR-TN-0001P01asisattached to thisDeedor, in thecaseofaForceMajeureEventwhichpreventsoccupationofApexHouseasatemporarymarket,suchotherlocationwithintheCouncil'sadministrativeareaasmaybeagreedinwritingbetweentheDeveloperandtheCouncil.”(Sch.2,p.10)

5.35. 865 sqmequatesto9,310squarefeet(“sqft”).

5.36. TheDDVrequiresGrainger“nottopermanentlyclosetheMarket(aspartofthe

49

Development)unlessanduntiltheTemporaryMarkethasbeenPractically

Completedandisreadyforoccupation” (para.2.2, Sch.3).

5.37. ProvidingaTemporaryMarketfromwhichtheTraderscanoperateduring the

NewMarketArea’sconstructionisabsolutelycrucialtothegoalofmaintaining

theMarketinitscurrentform.Ifnoprovisionweremadeforatemporarymarket

andtheintentionwassimplythattheMarketwouldshutduringany

refurbishmentperiodandre-openafterwards,theMarketsimplywouldnot

surviveinitscurrentformandyoumightaswellbestartingagainfromscratch.

5.38. Thereisnowaythat smallindependenttradersofthiskindcouldtreadwater

withoutan incomestreamduring anysignificantperiodofclosurebefore

returningtoare-openedmarket.EvenifsomeTradersweredetermined tohold

onandwaitfortheMarkettoreopen,itisalmostcertainthatmanywouldnotbe

ableto.Inreality,Traderswouldveryprobablymakethedecisiontorelocateand

thegroupwoulddispersetoothermarkets.Itwouldthenbevirtuallyimpossible

toreassembletheoriginalgroupoftraders,especiallyiftheirrelocationwas

provingsuccessful.Itwouldbevirtuallyguaranteedthatthepresentcommunity

wouldhavebeenlost duringtheconstructionorrefurbishmentperiod.AsI

statedabove,IdonotfeelthattheWCC’sAlternativeSchemehasaddressedthese

importantmattersatallconvincingly.

5.39. Traderswhorespondedtothe 2012 BusinessSurvey raisedthesameconcern.

Question13asked“whatadditionalmeasures,ifany,doyoufeelareneededso

thatyourbusinesscancontinuetooperateduringreconstruction?” Answers

stressedtheneedforatemporarylocationwithsimilartransportlinksduringany

redevelopmentorrefurbishment:

i. “Berelocatedtosomewherewecancarryonthebusinessinthemeantime”;

ii. “Realocate [sic] ittosomewhereelseinthemeantime”;

iii. “Transitorylocationclosetocurrentlocation”;

iv. “Relocatewithinthelocalareawithhighlevelofcommutingaswehave

here…”.

5.40. Traders also expressedthespecificconcernthat,withoutatemporarylocation,

theMarketwouldnotbeabletore-establishitselfafteraperiodofclosure:

i. “…Duringreconstructiontheclosureofbusinesswillmakecustomersgo

somewhereelse.Itisnotguaranteedthatclientswillcomebackwhennew

developmentisready”;

ii. “Stay[ing] closedduringallthattimewillbehighlynegativeforthe

business”.

50

5.41. ItwasalsosuggestedthatTraderswouldbeunabletosupportthemselvesifthere

wasnotradingduringtherefurbishmentperiod:

i. “…Ifreconstructionwouldhappen,inthemeantime,to compensatewe

wouldneed2 millionGBP todividebetweenallofusandhaveamonthly

rentforthetwoyears,whiletheworkshappen.”

ii. “Minimum2million betweenalltradersforsupportovertwoyears- 62

unitstobedividedbetween.Tooexpensiveoutsidewiththecompensation

proposed.Wanttokeepthecommunitytogether…”

5.42. Grainger’sobligationtoprovideaTemporaryMarketis thereforeinvaluable to

ensuringthecontinuityoftheMarketwhilsttheNewMarketAreaisunder

construction;itshouldproviderealcomforttotheTraders.

iv) TheLocation oftheTemporaryMarket

5.43. GraingerhasacceptedmyadvicethatApexHouseshouldbedesignated as the

locationoftheTemporaryMarket.InotethattheDDVreferstotheTemporary

Marketbeingin“partofthegroundfloorofthepropertyknownasApexHouseor,

inthecaseofaForceMajeureEvent…suchotherlocationwithintheCouncil’s

administrativeareaasmaybeagreed”(Sch.2,p. 10).ApexHouseisimmediately

acrosstheroadfromthecurrentMarket.InotefromMrKiddle’sProof thatthe

demolition worksatApexHousehavealreadybegunandthatconstructionis

expectedtocompleteinearly2020.

5.44. TheimmediateproximityofApexHouse totheMarket’scurrentandfuture

permanenthome isabsolutelycrucialtomysupportfortherelocationscheme as

itprovidescontinuityfortheMarketintheclosestpossiblelocation.

5.45. AsIexplainfurtherbelow,inadditionto thelocationofApexHouse,theMarket

willbenefitenormouslyfrombeinginApexHouseasanewlyfitted-outmarket

hallwithallthebenefitsofincreasedcirculationspace,morenaturallight,new

andcleanfittings,improvedandsaferservices,moreattractiveandvisible

entrances,betteradvertisingandsignageandsoon.Thesebenefitsofbeingina

brandnewhallmustbestressedasitismyopinionthat– evenwiththeMarket

movingacrosstheroad– theycreateafantasticopportunity fortheTradersto

increasetheircustomerbaseandprofits.

5.46. ApexHouseisacrosstheroadfromthepresentsite:itisthereforenotdirectly

abovetheundergroundstation andsomecustomersmayneedtocrosstheroad

toreachit.However, anydisadvantagesarefaroutweighedbythebenefittothe

Traders’businesscontinuity fromitsproximity.Ihavealreadydiscussedabove

thattheMarketdoesnottakeadvantageofitslocationabovetheunderground

anyway;thiswillchangeintheNewMarketArea.

51

5.47. I aminstructedthatApexHousehasbeendiscussedastheTemporaryMarketsite

atmeetingsoftheMarket’sSteeringGroup(discussedinMrKiddle’sevidence).A

letterinMarch2017 fromSteeringGroupmemberMsM.C.HinestrozadelaOssa

confirmedthat “100%oftradershadbeenconsulted”andthoughtthatthiswould

beasuitablelocationfortheTemporaryMarket(appendedtoMrKiddle’sProof).

5.48. IfirmlybelievethattheApexHouse/NewMarketAreaproposalfromGrainger

offerstheTraderstheirbestchanceofcontinuingtheMarketasclosetoits

presentformaspossiblewhilstalsodramaticallyimprovingtheirconditions.AsI

havediscussedabove,thesituationoftheMarketinitscurrentlocationandstate

isuntenableduetotheconditionofthe buildingandthebelow-marketrates

chargedbylandlordandmarketoperator.EvenwithoutGrainger’sproposal,

somethinginthatequationwouldhavetochangesoon,attheTraders’expense

andwithouttheextensiveprotectionsofferedbyGrainger.

5.49. Ishouldnotethattheoriginals.106agreementwassilentontheTemporary

Market’slocation.IwasinstructedthatApexHousewastheintendedlocation

andIadvisedthatitwasessentialtogiveassolidaguaranteeaspossiblethatthe

TemporaryMarketwouldbeinApexHouse,givenitsimportance.Myadvicewas

acceptedandtheDDV now guarantees thattheTemporaryMarketwillbeinApex

House,barringforcemajeureevents,inwhichcaseitwillbein“suchother

locationwithintheCouncil’sadministrative area”asisagreedinwriting(Sch.2,

p.10, DDV).Thisisasignificantimprovementtothecurrents.106.

v) TheTotalSize oftheTemporaryMarket

5.50. Grainger’sobligationsinthes.106andthe DDVareclearlydesignedtoensure

thatthecommunityofcurrentTraderssurvives.TheobligationsonGrainger

ensurethat,essentially,allofthosecurrentlytradingintheMarketandstill

tradingattherelocationstageareguaranteedastallintheTemporaryMarket.

ThesizeoftheTemporaryMarketisthereforeclearlycrucial:theremustbe

enoughspacetoaccommodateallexistingTradersandGraingercannotassume

thatanyTraderwoulddecidenottorelocate.

5.51. Withinanymarket,therentablespaceforstallsisalwayssignificantlylessthan

thetotalgrossavailablespace.Thisistoallowspace forcustomerstomove

betweenstalls,forfireexits,publictoiletsandamanagementoffice,amongother

matters.Oldermarkethallstendtousemoreroomfortraders’stallsbutmodern

bestpracticeistoincreasetheamountoffreespace.Asageneralruleofthumb

fornewlyfittedoutornewlybuiltmarkethalls,55%ofthetotalavailableareais

usedfortraders’stallsandtheremaining45%isrequiredforcirculationand

safetypurposes.Improvingthecustomerexperienceisonereasonforthis

(crampedspacesandcorridorsbetweenstallsareunwelcomingtocasual

customers)andhealthandsafetyrequirementsareanotherreason(intheevent

52

ofafire,forinstance,itmustbepossibletoeasilyleavethebuilding).Iwould

expecttheseroughproportionstoapplytotheTemporaryMarketandtheNew

MarketArea,asnewlyfitted-outorrefurbishedmarket halls.

5.52. IaminstructedthatthecurrentMarkethasagrossinternalareaof9,730sqft:

6,200 sqftisusedfor stalls and408sqftisusedforservices.70%ofthetotalarea

isthereforeusedforstalls andservices and30%forcirculation.Thisiscommon

foroldermarketsbutinconsequence,however,theMarketisbesetbyproblems

which havedevelopedovertheyears:inparticularthegangwaysbetweenstalls

arenarrowandcramped andtherearenocommunalareas.

5.53. IaminstructedthattheTemporaryMarketwillhaveatotalgrossinternalarea of

12,472sqftandatotalnetinternalarea of7,740sqft.TheTemporaryMarket will

thereforehavemoretradingspacethanthecurrentMarketandtherewillbe

morespaceoverall,inlinewithbestpracticeanda55:45division.Thecurrent

draftfloorplansfortheTemporaryMarketshowingZonesAandBforLicence

FeepurposesareatAppendix 5.

5.54. ThedrawingsshowthattheTemporaryMarketbacksontoalockablecourtyard

ofaround1,000sqft.IaminstructedthatGraingerownsthis spaceandit willbe

availabletouseaspartoftheTemporaryMarketasseating,communalspaceand

othersimilaruses.Theadditionof1,000sqftofoutsidecommunalspaceisa

fantasticopportunityforthevibrantcommunitylifeoftheMarkettoflourish.

5.55. AtalaterstageitwillbenecessarytoagreeafloorplanshowingtheTraders’

relocationintotheirindividualstalls,services,communalspacesandsoon.Itis

notpossibletoallocatetheexactlocationsofindividualstallsatthisstage,not

leastbecauseitisnot reasonabletoexpectTraderstocommittorelocation now.

5.56. Graingermust consulteachTradermovingintotheTemporaryMarket“aboutthe

proposedlocationofhisunitwithintheTemporaryMarketandtohaveregardto

anyreasonable representationsandviewsthatarereceived” (para.2.4,Sch.3,

DDV).Thisconsultationmusthappen atleasttwomonthsbeforethe“Temporary

MarketOfferDate”,thedeadlineforTraderstoaccepttherelocationOffer.

5.57. ItisreasonableandappropriateforGraingerandtheOperatortoconsultwiththe

Tradersandconsidertheirspecificneedsfortheirbusinessandideasabout

wheretheywanttobeintheTemporaryMarket.However,itisvitalthat

GraingerandtheOperatorretainthefinaldecisionoverhowthebusinesseswill

belocatedacrosstheTemporaryMarket,tobeabletomakethebestdecisionsfor

theMarketasawhole.Thetimingofthisconsultationisalsoappropriate:no

laterthantwomonthsbeforetheTemporaryMarketOfferDate.TheTraderswill

beabletogivetheirviewsabouttheirstalllocationbeforetheymaketheir

decisionontheofferandwillhaveanideaofwhattheTemporaryMarketwill

53

looklike.GraingerandtheMarketOperatorwillthenhavetwomonthstomake

thefinaldecisionontheTraders’locationswithinthemarket, allowingthemto

makefinalplansforarapidandefficientrelocation.

5.58. Ofcourse,thefinedetailsofthiswillneedconsiderationattheselaterstages.

TherewillalsobeavitalongoingrolefortheMarketFacilitatortoplayinthis

process,aspartofproviding“appropriatebusinesssupportandadvice”to

Traders(para.2.1,Sch.3,DDVandsee below).

5.59. Asaverygeneralobservation,thereisaprecedentforthegroupingtogetherof

hotfoodtradersandoutlets.A “foodcourt” styleareawithsharedseatingworks

wellandwillencouragethecommunityaspectofthemarket.Thismayalso

doubleasacommunalspaceforentertainmentandevents,whichwouldalso

contributetothecommunityatmosphereofthemarket.

5.60. Theinternallayoutwill,ofcourse,berequiredtocomplywithrelevantbuilding

regulationsandhealthandsafetyregulations.Thiswillaffectthesizeofpublic

walkways,fireescapes,drainage,ventilationandtheconstructionofmezzanines.

5.61. ClearlytherewillneedtobedetailedplansworkedoutfortheTemporaryMarket

stallsandtheirindividualfittingout.Inmyview,atthisstage itisnotnecessary

forGraingertoprovideadditionalobligationsintermsofthefinaldesignofthe

TemporaryMarketoritslayoutintheformal legalagreement;theTraders’

interestsaresufficientlyprotectedbytheformal obligations.

vi) ClosingtheCurrentMarket

5.62. GraingermaynotclosetheMarketunlessanduntiltheTemporaryMarkethas

beenprovidedandisreadyforoccupation(para.2.2,Sch.3,DDV).Graingermust

servea“ClosureNotice”ontheCouncilandallTradersoperatingstallsinthe

Marketatleastsix monthsbeforetheCommencementofthe Development (para.

1.1,Sch.3, DDV;seealsop.2s.106).

5.63. TheClosureNoticemustincludethe“ClosureDate” forclosingtheMarket,which

canbenolessthansix monthsafterthedateoftheserviceoftheClosureNotice

(Sch.2, p.6,DDV).Itmustalsostate,asatthedateoftheClosureNotice:

i) thenameoftheoccupierofeachunit;

ii) therateablevalueofeachunit;

iii) thesizeofeachlicensedunit;and

iv) theTemporaryMarketOfferDate.

5.64. TherequirementthattheTemporaryMarketmustbereadytooccupybeforethe

MarketmaybeclosedprotectstheTraders’interests,itprovidesreassurance

54

that,whenevertheClosureNoticemightbeservedandwhatevertheClosureDate

mightbe,theMarketcannotbecloseduntiltheTemporaryMarket isready.The

Traderscanthereforebeconfidentthat theMarketwillnotbeallowedtosuffera

prolongedperiodofclosurebetweenthecurrentMarketclosingandthe

TemporaryMarketbeingreadyforoccupation.Althoughitisinevitablethatthere

willbeashortperiodforphysicallyrelocatingthestalls,duringwhichtheMarket

willnotoperate,thisobligationensuresthatthisisnolongerthannecessary.

5.65. TherequirementthattheClosureNoticegivesTradersaminimumofsixmonths’

noticebeforetheMarketisshutisanappropriatelengthoftimeto keepTraders

informed,toallowthemtoconsidertheirpositionandmakearrangements.

5.66. Theinclusionofeachstall’ssize,occupierandrateablevalueintheClosureNotice

isalsoasensibleprovision.Identifyingtherateablevalueforeachstallmeans

thateachTraderknowswhathisorherindividualReleaseSumwouldbe,inthe

eventthatheorshedeclinesrelocation.

5.67. Settingoutthelicensedsizeofeachstallgivesthe upperlimitto thestallsizethat

anyTradermightexpecttorentintheTemporaryMarketandtheNewMarket

Area.Thisinformationisalsousefulinasecondway:IaminformedbyMAMSSL

andfrommyownvisitstotheMarket thatthereareanumberofstallstrading

fromalargerareathan permittedunderthetermsoftheirlicence.Forexample,

someTradershaveconstructedunauthorisedmezzaninesorareusingcorridor

spacefortheircateringbusinesses.MAMSSL isworkingtoaddresstheseissues

nowandtoensureTradersunderstandthattheyonlypayforuseofadefined

areaandthattheymayonlytradewithinthatarea.Itisprudenttobeginthis

now;todelaywouldstoreupproblemsforwhenrelocationapproaches,an

alreadystressfulperiod.

5.68. ItisveryimportantthatTradersunderstandtheactualsizeoftheirlicensedunit

andwhattheycanthereforereasonablyexpecttobeallocatedintheTemporary

MarketorNewMarketArea.

vii) TheOffer toRelocate totheTemporaryMarket

5.69. Iwillnowexaminetheissuesraisedbythe“Offer”thatGraingerisobligedto

providetoevery“QualifyingTrader”intheMarketatthedateoftheClosure

Notice.FirstIdealwiththedefinitionofa“QualifyingTrader”,thenthedefined

periodforacceptingorrejectingtheOffer.Thirdly,Ilook atthe“ReleaseSum”

payableshouldaTraderdecidenottoaccepttheOffertorelocate.Finally,Ilook

atthefour aspectsoftheOfferdefinedintheDDV.

a. TheDefinitionofa“QualifyingTrader”

5.70. LookingfirstatwhowillreceiveanOffertorelocate:underparagraph24.4,Sch.4

55

ofthes.106,Graingerwilloffer“eachTrader”astallintheTemporaryMarket.

“Traders” aredefinedasthoseindividualslistedinSchedule7asoccupyingstalls

inJuly2012.TherehavebeenasignificantnumberofchangesintheMarketover

thepastfiveyears:ofthe38Traderslistedinthes.106only14werestill in the

MarketinFebruary2017.Theconfiguration ofstallsandbusinesseshasalso

undergonesomechanges.Moststallshavethereforehadatleastonechangein

occupation andSchedule7ofthes.106isthereforenolongeraccurate.

5.71. TheDDV statesthata“QualifyingTrader”isa“Traderwho:a)isoperatingastall

attheMarketasatthedateoftheClosureNotice;andb)hasbeenoperatinga

stallattheMarketwithoutinterruptionforaperiodofthree monthsimmediately

precedingthedateoftheClosureNotice”(Sch.2,p.9,DDV).

5.72. Graingeralsohasthediscretiontooffernon-QualifyingTradersaspaceinthe

TemporaryMarketonthesametermsasQualifyingTraders(para2.7,Sch.3,

DDV)although thisonlybecomesrelevantifthereisroomintheTemporary

MarketafterallQualifyingTraders havebeenaccommodated (giventheexpress

obligationtoofferall “QualifyingTraders” astall).

5.73. IhaveexaminedtheDDVobligationstoensurethatGrainger isrequiredto

provideanalternativesiteforallofthoseTraderswhogivetheMarketthe

composition,communityandcohesionwhichitenjoystoday andwhichare so

highlyvaluedbyTradersandtheircustomers.Iamsatisfiedthatthepreservation

of the currentbalanceofbusinesses,andthecommunitycreatedby thatbalance,

isthepurposeof Grainger’s“Offer”offreerelocation,astallofthesamesize(orat

least90%)oftheTrader’scurrentstallandathreemonthlicence-feefreeperiod.

5.74. Itisthereforereasonable torequirea Tradertohavebeentradingfromthe

MarketforthreemonthsbeforetheClosureNotice,inordertobenefitfromthe

generousOfferpackage.A minimumtermofthreemonthsintheMarketwould

ensurethattheTraderwasapartofthelifeofthecurrentMarketandintendedto

continuetradingandcontributingintheMarket’stemporary home.

5.75. Imposinga longerqualifyingperiodbeforeaTradercouldreceiveanOffer offree

relocationmightdiscouragenewtradersfromtakingavacantstallinthecurrent

Market,shouldanyarise beforerelocation.Traderswhowereconsidering

whethertotakealeaseinthecurrentMarketbeforetherelocationwouldbe

awarethattherewould beamoveintheimmediatefutureandthattheywould

riskbearingsomeoralloftherelocationcoststhemselves.Thiswouldcreate

significantriskanduncertaintyforlocalindependenttraderswhootherwise

mightbewillingtorentunitswhichbecomevacantbetweenthedateofthe

InquiryandtheClosureNotice.

5.76. Thisuncertaintycouldput theviabilityoftheTemporaryMarketatriskbefore

56

relocation eventookplace: it wouldincreasethepossibilityofvacantstalls atthe

timeofthemove.Vacantstallsalwayscarryarisktoamarket andparticularlyon

relocation.Asmentionedabove,thesuccessoftheTemporaryMarketmayalso

haveanimpactonmarketoperatorcompanies’willingnesstotakeontheMarket

LeaseoftheNewMarketArea.ItisthereforeintheinterestoftheTraders,the

MarketOperatorandGraingertohaveafullandthrivingMarketatthetimeofthe

movetotheTemporaryMarket.Further,as thedesireistoprotectandencourage

localindependenttraders,therewouldbenoreasontoexposethemtotheriskof

payingforrelocation;thiscouldonlyleadtovoidspacesintheTemporary

Market.ItisthereforeofrealbenefittothesurvivaloftheMarketthatthe

qualifyingperiodisasshortas threemonths.

5.77. Inmyview,therefore,itisreasonablethataQualifyingTrader needonlyhave

beentradinginthecurrentMarketforthreemonths beforethedateofthe

ClosureNotice inordertoreceiveanOffer,inlinewith myrecommendedperiod

foracceptingtheOffer assetoutbelow.

b. TheTraders’PeriodforConsideringtheOffer

5.78. InowexaminetheperiodoftimefortheTraderstoconsidertheOffer.

5.79. TheDDV isasignificantimprovementonthepreviouspositionunderthes.106

fromallparties’perspective:theTradersare nowguaranteedtoreceivetheOffer

atleastsixmonthsbeforetheMarketisclosed.TheTraders’deadlinefor

accepting theOfferisthreemonthsbeforetheClosureDate.Theguaranteed

minimumperiodforconsideringtheOffer isthereforethree months.

5.80. Graingermustgive QualifyingTraderstheOfferwiththeClosureNotice(para. 2.3,

Sch.3,DDV).This Noticemustbeservedatleastsixmonthsbeforethe“Closure

Date”,whentheMarketmustbeclosedandtheTemporaryMarketreadyto

occupy(paras1.1and2.2, Sch.3and“ClosureDate”,Sch.2,p.6,DDV).Traders

willthereforebemade theOfferatleastsixmonthsbeforetheClosureDate.

5.81. Theperiodforconsidering the Offerrunsfromwhenit is serveduntilthe

“TemporaryMarketOfferDate”,threemonthsbeforetheClosureDate (see

“TemporaryMarketOfferDate” p.10and“ClosureNotice”p.6,Sch.2,DDV).So,if

theClosureNoticeisservedtheminimumofsixmonthsbeforetheClosureDate

andtheTemporaryMarketOfferDateisthreemonthsbeforetheClosureDate,

theminimumfortheQualifyingTraderstoconsidertheOffer willbethree

months.TheNoticecouldbeservedmore thansixmonthsbeforetheClosure

Date, inwhichcasetheperiodforconsiderationwouldbe longer.

5.82. CalculatingtheTemporaryMarketOfferDatebackwardsfromtheClosureDateis

asensibleandreasonablemechanism.ItprovidesenoughtimefortheTradersto

maketheirdecisionanditprovidesGraingerandtheMarketOperatorwiththe

57

certaintyofknowingwhichTradersneedrelocatingtotheTemporaryMarket.

5.83. DealingfirstwiththeneedsoftheTraders:ifthe ClosureNoticeisserved atleast

sixmonthsbeforetheClosureDate,therewillcertainlybefloorplansandvisuals

oftheTemporaryMarketavailable(asit wouldhavetobenearingcompletion,to

bereadybytheClosureDate).It mightnotbefinishedenough,however, for

Traderstobeabletopicturethemselvestrading init,particularlyifGrainger

served theClosureNoticemore thansixmonthsbeforetheClosureDate.

5.84. Byproviding thattheTraders’decisionperiodrunsuntilthreemonthsbeforethe

ClosureDate,theDDV providesreasonableassurancesthattheTemporary

MarketwillbeinasufficientlycompletedstateforTraderstoviewitbefore

makingtheirdecision.Thethree months alsoprovide areasonableperiodfor

Traders totakeadvicefromtheMarketFacilitatororanyothersource.Theywill

alsohavetimetoconsidermatterssuchas theirstockdeliveries,relocationissues

andtheirbusinesscaseformoving.

5.85. Inmyview,theDDV provides sufficientguarantees thatTraderswill beableto

makeaninformeddecisiononwhethertoaccepttheOfferortaketheRelease

Sum.

5.86. The needs oftheTraderstoviewtheTemporaryMarket mustbebalanced with

those ofGraingerandtheMarketOperatortoplantherelocationandtoletvacant

stallsifTraderschoosenottorelocate.Imposingatimelimitforacceptingthe

Offerwillallow GraingerandtheMarketOperatortoplaneffectivelythe

relocationforallremainingTradersandtofillanyvacantstallswithnew

applicantstokeeptheTemporaryMarketthrivingandbuoyant.

5.87. Further,Inoteagainthatthelevelofassistancebeingofferedinrelocatinggives

theTradersaveryhighchanceofnotonlysurvivingbutalsoimprovingtheir

tradingconditions.Giventhis, itisentirelyreasonablefortheTraderstohavea

timeframefordecidingwhethertoaccepttheReleaseSumortheassistanceto

relocatebeingoffered,inorderthattheMarketOperatorandGrainger cantakeall

necessarystepstoprotecttheinterestsoftheMarketasa whole.

5.88. InmyviewthearrangementsforclosingtheMarketaresuitableandprovideall

reasonableassurancestotheTradersthatthisstageoftheprocesswillcompleted

assmoothlyaspossible.

c. TheReleaseSum

5.89. IftheTradersdecidenottorelocatetotheTemporaryMarket,theywillbepaid

theReleaseSum,whichistherateablevalueoftheTraders’unitsatthedateof

theClosureNotice(see“ClosureNotice”p.6 and“ReleaseSum” p.10,Sch.2,DDV).

UndertheDDV Graingermust paytheReleaseSumwithin28 daysofthe

58

QualifyingTradersigningtheReleasedocument(para2.6(a), Sch.3,DDV).

TradersthereforehaveoneopportunitytoaccepttheReleaseSum,atthemoment

ofdecidingwhetherornottorelocatetotheTemporaryMarket.Thereisno

equivalentReleaseSumforaTemporaryMarketTraderwhodoesnotrelocate

againtotheNewMarketArea.

5.90. Iamnotawareof anyexamplesofclosingorrelocatingmarketsinwhichasimilar

releasefeewas offered,especiallyasanalternativetoarelocationpackage.Inmy

experience,ifatraderdecidesnottorelocatewithamarket,theysimplygiveup

theirleaseorlicenceandleave themarket;thereisnocompensationpayable.It

isunusualtohavetherelocationoptionsthattheTradershavewithGrainger.

5.91. Further,at presenttheTraders’licences canbeterminatedbyeitherpartyon

veryshortnotice– themarketoperatormustgiveoneweek’snoticeandTraders

mustgivefour weeks– andnocompensationwouldbepayablewhatsoever.The

obligationtopaytheReleaseSumtoTraderswhodecidenottorelocatetothe

TemporaryMarketandwhoarerelinquishingtheirlicences is thereforegenerous.

5.92. TraderswhoelectnottorelocatealsoreceiveassistancefromtheMarket

Facilitator,whowill“assistindividualsworkingattheMarkettofindsuitable

alternativeemployment”iftheydecidenottomovetotheTemporaryMarket

(para.2.1(f), Sch.3, DDV). This offerofassistancewill beofgreatbenefitto

departingTraders.AnexperiencedFacilitatorwillhavecontactswithinthe

industryandwillbeabletoadviseonopportunitieswhichwillsuittheindividual

Trader.Itisunusualinmyexperiencetofindsuchassistancebeingofferedwhen

suchaviablerelocationplanisinexistence.

5.93. Overalltherefore,Iamsatisfiedthatthese obligationsprovidedbyGrainger

provideallreasonableassurancesthatasmany Tradersaspossiblewillelectto

movetotheTemporaryMarketandwillbeabletotransitionsuccessfully.

d. TheContentoftheRelocationOffer

5.94. WithregardtotheOfferitself,underparagraph24.4,Sch.4ofthes.106,Grainger

mustoffereach“Trader”“astallintheTemporaryMarket”with“athreemonth

rent-freeperiodintheTemporaryMarket.”Thisobligationissignificantly

expandedundertheDDV:Graingermustmakeeach“QualifyingTrader”an

“Offer” (para.2.3,Sch.3),whichmust include:

(a) freerelocation(includingallreasonableremovalcostsandexpenses

butexcludinganydangerousorunlawfulorunauthorised

equipment)fromtheMarkettotheTemporaryMarket;

(b) aLicenceofaunitintheTemporaryMarket,whichshall:(i)havethe

benefitofallServices;(ii)benolessthanninetypercent(90%)of

59

thesizeoftheQualifyingTrader'sunitintheMarket;(iii)beofan

appropriatelayouthavingregardtotheQualifyingTrader'sunitin

theMarket;

(c) athree(3)monthlicencefee-freeperiodinrelationtohisunitintheTemporary Market commencing on the date when the QualifyingTrader'sunitintheTemporaryMarketisfirstopenedtothepublic;and

(d) theLicenceFeeforsolongastheTemporaryMarketisinoperation.”(see“Offer”,Sch. 2,p.9 DDV)

5.95. Inowconsiderthe“freerelocation”obligationandtheunitsizeandservices/

facilitiesintheTemporaryMarket.Ihaveconsidered LicenceFeesinSection4.

i. FreeRelocation totheTemporary

5.96. Underthecurrents.106Graingerwas to providethetotalrateablevalueofthe

Marketasa“TradersFinancialAssistanceSum”(p.4,s.106,“TFAS”),whichwasto

bepaidtotheCouncilandthendistributedamongtheTraders.Forthosewho

wishtorelocate,itwastobea“contribution”tothemovingcosts(para24.3,Sch.

4,s.106).

5.97. Inmyview,theDDV now providesabetterandmoresecuredealfromthe

Traders’perspectiveby replacing theTFASandsimplyoffering“freerelocation

(includingallreasonableremovalcostsandexpensesbutexcludingany

dangerousorunlawfulorunauthorisedequipment)fromtheMarkettothe

TemporaryMarket”.ThisisagreatopportunitytosmooththetransitiontoApex

HousefortheTraders.IfanindividualTraderdecidesnottorelocate,heorshe

willbepaidtherateablevalueoftheir stall asa“ReleaseSum”(Sch.2,p.10 DDV).

5.98. FromtheTraders’perspective,the DDV isasignificantimprovementintwo

respectsonthes.106:

a) Thes.106providesthatfinancialassistancefromGrainger“is

providedbywayofacontributiontowardsthecostsincurredbythe

Tradersinrelocating”(para24.3,Sch.4,emphasisadded).TheDDV

guaranteesa“freerelocation(includingallreasonableremovalcosts

andexpenses…” (“Offer”,Sch.2,p.9);

b) Thes.106providesthatthebudgetforthe relocationwastobe

drawnfromtheTFAS,whichwas “theaggregaterateablevalueofthe

Market”(p.5s.106).TheDDV nolongerlinkstherelocationbudget

totherateablevalueoftheMarket.Thisissensibleinmyview,as

thereisnologicallinkbetweena stall’srateablevalueandthe

probablecostinrelocatingit totheTemporaryMarket.

60

5.99. Inmyview,itispreferablethattheprocessofmovingshouldbeadministeredand

paidfordirectlyby Grainger,asprovidedintheDDV,ratherthantheCouncil

distributingsmallindividualsumstoeachTrader asintheoriginals.106.A

centrallyrunprocessprovidesgreaterassurancetoallpartiesthatallofthe

Traders’equipmentandstockwillbemovedsafelyandthateveryTraderwillbe

installedinascloseto theircurrentpositionasreasonablypossible.Further,

engagingaprofessionalmovingcompanytomovetheTradershasattendant

subsidiarybenefits,suchasinsuranceshouldanything bedamagedinthemove.

5.100. Atalaterstagetherewillneedtobedetailedplansforthepreciseprocessof

movingtheTraders: thepackingprocess; thesequenceinwhichTradersmove

across; thedateofthemove(includingdatestoavoid);asuitablereopeningdate

(ideallytocoincidewithanappropriatefestivalor holidaytoenhancethe

reopeningevent)andsoon.This willensurethesmoothestmovepossibleandto

minimisethetimewhentradingwouldbesuspended.Theactualprocessof

movingstockandequipmentwill requireacarefulinventoryofthestalls’

contents andtheuseofacentralcontractortodeliverit totheTemporaryMarket.

5.101. IamtoldthatGraingerhavecontacted removalscompanyJ.A.Steel&Sonto

obtain aquoteandtodiscusstheremovalprocessfromtheMarkettoApexHouse

indetail.IattachatAppendix 7 aletter fromthecompanysettingoutits

experience,qualifications,detailsoftheir visittothesiteandkeyfactorsfor

consideration.Ihavespokenwithacompanyrepresentativeandamsatisfied

thatthe companyhasextensiveexperienceofcommercialmoves.Inparticular,

theyareaware oftheneedforarapid,resource-intensivemove;thisisimportant

giventheTraders’ needtoreopenquickly tomaintainbusinesscontinuity.Iam

satisfiedthatJ.A.Steel&Sonare suitabletocarryout therelocationprocess.

5.102. IaminstructedthatGraingercontinuestosetasidetherateablevalueofthe

Market(theformers.106TFAS)asarelocationbudget, around£201,000 (seeMr

Fourt’sProof).Iamalsoinstructedthatthe Mayorhaspledged£284,000towards

thecostsoftemporaryrelocation (seedecisionappendedtoMsJohnson’s Proof).

Thisprovides arelocationbudgetof£485,000. FurtherIaminstructedthat

Graingerhascommittedtopaythefullcostsshouldthey exceedthisbudget

(subjecttoSch.2,p.9,DDV: “excludinganydangerous… equipment”).

5.103. J.A.Steel&Sonhasestimated£1,000- £1,500tomoveeachstall.Assuming

£1,500perstallacross60individualunits isatotalof£90,000.Evenifthis

budgetweretobeexceededby100%,itisclearthatthefundsallocatedwillbe

enoughandleaveplentytosparefortheNewMarketArearelocationand

advertisingcosts.

5.104. InMarch2017IwasinvolvedintheCoventGardenFlowerMarket:thiscost

around£100,000 tomove38traders using50,000sqftoftradingspaceand

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significantlymoreequipmentthantheSevenSistersMarket.Weusedeight7.5

tonnevehiclesandapproximately40staff.ThemovecommencedonSaturday

lunchtimeandallequipmentwasinplacefortheunitstobeopenfortradingon

Sundayevening.Thiskindofspeedisessentialforensuringbusinesscontinuity.

5.105. IamthereforeconfidentthatthekindofmoverequiredbytheTradersisfeasible

andalsothatthebudgetof£485,000andtheproposedmovingcompanyare

suitablefortheTemporaryMarketandtheNewMarketArea relocations.

5.106. TheDDVstatesthatGraingerwillpayallreasonableremovalcosts“excludingany

dangerousorunlawfulorunauthorisedequipment”.Thislimitationisentirely

reasonableinmyview.

5.107. Frommy visitsto theMarket,itseems verylikelythatatleastsomeoftheTraders

haveoldoroutdatedequipment,andtheremaywellbeissueswithotherTraders’

apparatuswhichIdidnotidentify.Itseemsverylikelythatsome equipmentwill

beoutofdateornon-compliantwithhealthandsafetyregulations bythetimeof

therelocation.Some Traderswouldthereforehavetoinvestinequipmentinthe

shorttomediumterm anyway.Itwould beunreasonabletoexpectGraingeror

theMarketOperatortobear,asostensiblerelocationcosts,businessdevelopment

costsofTraderswhichwouldhavebeenincurredinanyeventoverthenextfew

years.Further,itwouldnotbeappropriateforGraingertoassistTradersin

continuingtouseequipmentwhichmightbeunsafeornon-compliantwithhealth

andsafetyregulations.

5.108. ItisindividualTraders’ responsibilitytohaveappropriatetestsconductedon

theirequipmentandobtainallappropriatecertificates(suchasPATtestsfor

electricalitemsorcertificatesforgascookers).BeforetherelocationIwould

expecttheMarketOperatortoremindTradersofthis.Iwouldalsoexpectthe

MarketOperatortodoafullauditofallequipmentbeforetherelocationand

identifyequipmentthatwillnotbemovedonsafetygrounds.Itremainsthe

Traders’responsibilitytogettheappropriatechecksdone.

5.109. Grainger’sexclusionofpayingmovingcostsfor“anydangerousorunlawfulor

unauthorisedequipment”isthereforeappropriateandreasonable.

5.110. InotefromMrKiddle’sProof thatGraingerhascreateda“Community

EngagementStrategy” (CD4/35).ThisCommunityEngagementStrategyhasled

tothecreationofthe MarketSteeringGroup,discussedabove.Meetingsare

attendedbyTraders,GraingerandMAMSSLtodiscusstheMarket’sfuture,daily

maintenanceandmanagementissues.TheStrategyalsoencourages meetings

betweenGraingerandindividualTradersto discusstheneedsofspecific

businesses inbeginningtoplanfortheTemporaryMarket relocation.AllTraders

havebeeninvitedtoanindividualmeeting:therehavebeen28meetingssofar

62

and Iaminstructedthat Graingercontinuestotrytoarrangethesemeetingswith

theremainingTraders.Thisisagoodbeginningtowhatwillneedtobeadetailed

andongoingprocess.

5.111. ItshouldalsoberememberedthatsomeTradersmay ceasetrading betweenthe

dateoftheInquiryandtheClosureNoticeorthatTradersmaychoosenotto

relocate.ItisthereforenotreasonableatthisstagetoexpectGraingerandthe

TraderstodiscussinprecisedetailwhattheTraders’movingneedsare,when

theymightnotberelocatingatall.

5.112. Givenallthis,thecurrentprovisionfor“freerelocation(includingallreasonable

removalcostsandexpenses butexcludinganydangerousorunlawfulor

unauthorisedequipment)”isappropriatelydetailedand doesnotneedto beany

morespecific atthisstage.

5.113. IamsatisfiedthattheformalobligationsprovidedbyGraingeraresufficientto

provideallreasonableassurances thattherelocation totheTemporaryMarket

willbesuccessful.TherelocationpackageofferedbyGraingeriscomprehensive

andinlinewithmyrecentexperienceoftheFlowerMarketmove.

ii. UnitSizeandFacilities intheTemporaryMarket

5.114. ThesizeoftheTemporaryMarketasawholeisdiscussedabove;hereIaddress

theissueofthesizeofTraders’individualunits.

5.115. Thes.106agreementprovided thattheTraderswouldbeoffered“astallinthe

TemporaryMarket”:therewas noguaranteethatthestallwouldbethesameora

comparablesize.ThiswasinsufficienttoprotecttheTraders’needto securea

stallasclosein sizeaspossibletotheircurrentunit,so Iadvisedthat,asfaras

possible,individualunitsizesshouldbemaintainedacrossboththeTemporary

MarketandNewMarketArea.MyadviceresultedinthecurrentDDVobligations.

5.116. TheDDV isthereforeasignificantimprovement onthepreviousagreement;

Grainger must

“usereasonableendeavours toprovideeachAcceptedQualifyingTraderwithaunitintheTemporaryMarketwhichisnosmallerthantheAcceptedQualifyingTrader’slicensedunitintheMarketPROVIDEDTHATinanyeventeachAcceptedQualifyingTradershallbeprovidedwithaunitintheTemporaryMarketwhichisnolessthanninetypercent ofthesizeoftheAcceptedQualifyingTrader’slicensedunitintheMarket” (myemphasis,para.2.5,Sch.3)

5.117. The“Offer”definitionrepeatsthefall-back guarantee of90%:Graingermustoffer

eachQualifyingTrader aunit“whichshall...benolessthanninetypercent ofthe

sizeoftheQualifyingTrader’sunitintheMarket”(Sch.2,p.9,DDV).

63

5.118. Assetoutabove,theTemporaryMarketatApexHousewillhave12,472sqft

gross space,with7,740 sqftofavailabletradingspacerentabletoTraders (the

currentMarkethas6,200 sqft ofavailable tradingspace).Iamthereforesatisfied

thattherewillbesufficient netspacetoaccommodateallofthecurrentTraders.

5.119. AsdiscussedaboveinSection4,theTemporaryMarketwillnotbethesame

shapeasthecurrentMarket.Usingthelatestfloorplans fortheredevelopedApex

House(Appendix5),IcanconfirmthatallTraderscanbeaccommodatedinstalls

whichareatleastthe samesizeastheircurrentunits.Iconductedthisexercise

withoutconsideringwhichbusinesswouldgoinwhichunits,however,asthiswill

besubjecttoindividualdiscussionswithalloftheTraders.

5.120. GiventheshapeofApexHouse,itmay thereforebedifficulttoprovideevery

Traderwithexactlythesamefloorspace and layoutand positioninthe

Temporary Marketastheircurrentunit.Therewillneedtobeanelementof

compromiseandnegotiationoverthesizeandpositionofsomeTraders’units.In

myview,itisthereforeacceptabletoallowa10%degreeoftolerance overthe

sizeofeachTrader’sTemporaryMarketunit.

5.121. A10%degreeoftolerance willallow GraingerandtheMarketOperator,in

consultationwiththeTraders,tomakethebestpossibledecisionsonthe

positioningand layoutoftheTraders’units, intheinterestsoftheindividual

TradersandtheMarket asawhole.Grainger,ofcourse,remainsthroughout

underthe obligationtouse“reasonableendeavours”toprovideeachTraderwith

aTemporaryMarketunitwhich is“nosmaller”thantheircurrentunit.Thefall

backguaranteethataTemporaryMarketunitwillbenolessthan90%ofthe

relevantcurrentunit’s sizeprovidesadditional assurancethateveryTraderwill

berelocatedintoaunitofatleasta comparablesize withtheircurrentone.A

10%differenceina100sqftunitisunlikelytohavea significantimpactona

Trader’sabilitytoruntheirbusiness.Itshouldalsoberememberedthatthe

LicenceFeesarecalculatedpersqft:iftheTrader’sunitissmaller,theirLicence

Feewillbelower.

5.122. TheTraderscanthereforebeconfidentthatGrainger willnotpaymerelipservice

to“trying”toprovideTemporaryMarketstalls ofequalsizetotheircurrentunits

andwillnotbeableto“getawaywith”offeringmuchsmallerunits.Itisalso

necessarytobearinmindthattheTemporaryMarketisonlyatemporary

solutionandthattheNewMarketAreawillbeslightlylargerthantheMarket.

5.123. Thedefinitionof“Services”obligesGraingertoprovide“water,electricity,

telecommunications,decoration(painting),flooringand(asappropriate)gasand

drainage” (Sch.2,p.10, DDV).Thisobligationisentirelysufficientatthisstage

andcoversthestandardservicesthatIwouldexpecttoseeprovided.Iam

instructedthateachindividualstallwillhaveameansofsecuringit,probably

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rollershutters.SomeTraderswillalsorequire extraction (businessesincluding

foodpreparation,salonsandnailbars)andeithertilingorstainless steelontheir

walls forpreparingfood.These matters(suchasextraction andotherdetailed

business-specificmatters)willbetheresponsibilityoftheMarketOperatorand

willonlybecomeclearoncethedetailedplansaremadeforindividualunits.Itis

thereforereasonablethatsuchmattersarenotdetailedinthes.106orDDV.

5.124. Finally,Ishouldagainmentionthatsomeunitswillbeonamezzaninelevel(this

isthecaseinthecurrentMarket,althoughthisisnotpermittedundertheterms

ofthe Traders’agreements).AssetoutinSection4,therewillbesignificant

discountsonmezzanineunits tooffsetanylossoftrade andIexpecttheMarket

OperatorandFacilitatortoworkwiththeTraderstoidentifybusinesseswhich

relylessoncasualcustomersandarethereforelesslikelytoexperienceadecline

inturnoverthroughbeingonthemezzanine.Preciselocationsshouldtherefore

notbedealtwithinthes.106agreementbutitwouldbebestpracticetoadoptthe

approachsuggestedhere.Ofcourse,GraingerandtheOperatormakethefinal

decisiononTraders’locationsin theTemporaryMarket (para.2.4,Sch.3,DDV).

5.125. IamthereforesatisfiedthattheDDV providesallreasonableguaranteestothe

Tradersinrespectofindividualunits’sizeandfacilitiesintheTemporaryMarket.

Overall,Iamsatisfiedthattherelocation“Offer”provides appropriateassistance

totheTradersastheyrelocateto theTemporaryMarket.

viii) Advertising theTemporaryMarketandtheNewMarketArea

5.126. TheDDV providesatparagraph2.1thattheMarketFacilitator“workswith the

Tradersinorderto...

(e) advertisetheproposedrelocationfromtheMarkettotheTemporaryMarketandfromtheTemporaryMarkettotheNewMarketArea(asthe case may be) so as to raise awareness about the proposedlocationandopeningoftheTemporaryMarketandtheNewMarketArea,respectively;

(f) advertisetheTemporaryMarketandtheNewMarketAreaonceeachfacilityhasbeenopenedtothepublic”.

5.127. AsdiscussedinSection3,theMarketlackscoordinatedmarketing,hasverypoor

signageandiswellconcealedbehindunobtrusiveswingdoors.Italsolacksa

coordinatedonlineandsocialmediapresence.

5.128. Inmyviewthis wholeredevelopment isarealopportunityfortheTemporary

MarketandtheNew MarketArea,workingwiththeMarketFacilitator, toattract

significantlymorecustomersandtoencouragecasualvisitors.Effective

advertisingwillbeessentialinhelpingtocarrycustomersfromtheMarketacross

totheTemporaryMarketandthentotheNewMarketArea.Adeliberateand

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sustainedadvertisingeffortbytheMarketFacilitatorinconcertwiththeTraders

thereforehasthepotentialtobeofsignificantbenefittotheMarketasawhole.

5.129. IwouldexpecttheMarketFacilitatortobeginaddressing thisissue earlyon,

especiallysocialmedia.Theuseofsocialmediaisalsoanissuethatshouldbe

includedinthebusinesssupportpackagedeliveredbytheFacilitator throughout

theMarket’stimeinitstemporaryhomeandintotheNewMarketArea.

5.130. Frommyownexperience,socialmediacanbeofgreatassistancetobothoutdoor

andindoormarkets.Forexample,Facebookpagescreatedandmanagedbymy

companyforourmarketshavebetween5 and10,000“likes”,withsomeposts

reachingover100,000people.EngagingwithsocialmediasiteslikeFacebook

enableustoadvertiseeffectivelyinformationlikedatesformarkets,newstalls,

specialevents,aswellasthebasictaskofkeepingcurrentcustomersengagedand

returningtothemarketand attractingnewclientele.OurNorthWealdMarket

Facebookpagehas8,000“likes”andisusedbytradersandcustomers

interactivelytopromotethemarket.Itisa much-emphasised policyofSaunders

MarketsLtdthatweengageactivelywithsocialmediaandwehavefoundit

highlyeffective.

5.131. Socialmediaadvertisingisanissuethatreallymustbedrivenbythemarket

managementteam;inmyexperienceindividualTradersrarelyhavethe

experienceortheimpetustoinitiateandsustainsuccessfulsocialmedia

campaigns.Itismosteffectivelydrivenatan“overallmarket”level,ratherthan

an“individualtrader”level.

5.132. DrivingforwardtheissueofadvertisingtheMarket– physicallyandonline–

makesobviouscommercialsenseandwouldbeinallparties’ interests.Itis

thereforesensiblethattheDDV specificallyallocatesresponsibilitytotheMarket

Facilitatorforthisimportantaspectoftheprocess.

5.133. Withoutwaivingprivilege,InoteherethatthepreviousdraftsoftheDDVdidnot

mentionadvertising.IadvisedthatIwouldexpectanidentifiedindividualtotake

responsibilityforadvertisingthe relocations;myadvicewasactedonin

specificallyincorporatingthisobligationintotheDDV.

ix) TheSizeoftheNewMarketArea

5.134. TheNewMarketAreaisdefinedintheDDV as:

“that part of the ground floor of the Development intending tocompriseanetinternalareaofatleasteighthundredandsixtyfivesquaremetres(865 sqm)andtobesuitable for local independenttradersbyway ofareplacementoftheMarket.” (Sch.2,p.8,DDV)

5.135. TheNewMarketArea(thegrosssizeofwhichcanbeincreasedto11,270sqft

66

(see theindicativelayoutappendedtoMrBeharrell’sproof) toprovide arentable

retailareaof6,200sqft and5,070sqft for circulationspace)wouldcomply with

themodernapproach discussedaboveof55%ofthetotalavailableareafor

Traders’stallsandtheremaining45%forcirculationandsafetypurposes.The

NewMarketAreawillthereforeprovideexactlythesameamountofspacefor

Traders’unitsandprovidethemuchneededadditionalspaceforcorridors,

servicesandhealthandsafety.

5.136. IamthereforeconfidentthatallofthosecurrentlytradingintheMarketcanbe

accommodated intheNewMarketArea.

x) TheLayoutoftheNewMarketArea

5.137. Underparagraph7.2,Sch.3 oftheDDV,Graingermust

“NolaterthantwomonthsbeforetheNewMarketOfferDate,consultwiththeTemporaryMarketTradersabouttheinternallayout oftheNew Market Area (including the proposed locations of theirindividual unitswithin theNewMarketArea) and... have regard toanyreasonablerepresentationsandviewsthatarereceived…”

5.138. AswiththeTemporaryMarket,itisappropriatetoincludearequirementto

consult theTemporaryMarketTradersonlayoutandtheirunits’location inthe

NewMarketArea,astheTraders’inputmaythrowuppossibilitiesthathadnot

beenidentifiedorthoughttobeviablebytheOperator.Aprofessionaloperator

wouldhaveopenlinesofcommunicationwithTraders onmatterssuchasthis

andIwouldexpectaprocessofrepeatedconsultationasthelayoutevolves.

5.139. ItislikelythatthemostcontentiousissuewillbewhichTradersobtainwhich

positionsintheNewMarketArea;atthispointtheoverallgoodofthemarket

tendstobecomesecondarytoeachindividual’sneeds.Inordertoensurethatthe

bestpossibledecisionsaremadefortheMarketasawhole,theMarketOperator

mustretainoverallcontrolofthelayoutprocess.Itisthereforeappropriate that

Grainger’sobligationisto“haveregardto”Traders’views.

5.140. AswithmyobservationsontheTemporaryMarket,itwillbenecessaryatalater

stagetoproduceafloorplanshowing theTraders’unitsintheirexactNew

MarketArealocations.IwouldexpectGraingerandtheMarketOperatorto

considerthisinmuchgreaterdetailatalaterstageand,aswiththeTemporary

Market,theroleoftheMarketFacilitatorwillbeessential inproviding

“appropriatebusinesssupportandadvice”totraders(para.2.1,Sch.3,DDV).I

alsowouldexpectthe“fitout”ofanynewmarket,aswiththeTemporaryMarket,

tobeaddressedindetailatamuchlaterstage.Theinternallayoutwill,ofcourse,

berequiredtocomplywithrelevantbuildingregulationsandhealthandsafety

regulations.Thiswillaffectthesizeofpublicwalkwaysbetweenthestalls,fire

67

escapes,drainage,ventilationandmezzaninelevelsaboveindividualstalls.

5.141. Inmyview,atthisstageitisnotnecessaryforGraingertoprovideadditional

obligationsintermsoftheNewMarketArea’sfinaldesignorfitout;theTraders’

interestsaresufficientlyprotected,particularlybytheobligationtoconsult.

xi) The NewMarketArea Scheme

5.142. InthissectionIconsidertheprovisionsregardingtheNewMarketAreaScheme,

whichisadocumenttobesubmittedbyGraingertotheCouncilwhichsetsoutthe

rateablevalueofeachTemporaryMarketstallandtheofferthatTemporary

MarketTraderswillreceivefortheirfinalunitsintheNewMarketArea.

5.143. Under paragraphs 7.4-5,Sch.3 oftheDDV,theNewMarketAreamaynotbe

occupieduntiltheNewMarketAreaSchemehasbeenapprovedbytheCouncil,

andtheNewMarketAreamustthenbeoperated inaccordancewiththeScheme.

5.144. Below,IcommentonaspectsoftheNewMarketAreaoffer.AstheseNewMarket

Areaobligationsareidenticalinmost respects tothosefor theTemporaryMarket,

myconclusionsarethesame.Iamsatisfiedthattheobligationsprovidedby

GraingerandtobeimposedontheOperatorwillbesufficienttoensurethatas

manyTradersaspossiblerelocatetoathrivingNewMarketArea.

a. TheDefinitionof aQualifyingTemporaryMarketTrader

5.145. AswiththeTemporaryMarket,theobligationtomakeanOfferforaLicenceofa

NewMarketAreaunitis limitedto“QualifyingTemporaryMarketTraders”,

althoughthereisadiscretion tomakeanequivalentoffertoanytraderwhodoes

notqualify.AQualifyingTemporaryMarketTraderisdefinedasaTrader

operatingintheTemporaryMarketforthreemonthsbeforethesubmissionofthe

NewMarketAreaScheme (Sch.2,p.9 DDV).

5.146. Therequirementthata“QualifyingTemporaryMarketTrader”hasbeen

operatingintheTemporaryMarketforthreemonthsbeforethesubmissionofthe

NewMarketAreaSchemeisreasonableandappropriateforthesamereasonsas

givenaboveforthedefinitionofthe“QualifyingTrader”.Allrelocationscarry

withthemanelementofrisk.Successwillbebestassured,however,byensuring

thattheTemporaryMarketisthrivingandbusyat thetimeoftherelocation,with

novacantstalls andtradersmakingprofitandabletopaythelicencefees.Ifthe

samefavourableofferisgiventoallTemporaryMarketTradersofthreemonths’

standingbeforetheNewMarketAreaScheme’ssubmission,thiswillprovide

certainty andencouragementtoanynewtradersconsideringwhethertotakea

unitintheTemporaryMarketinthemonthsleadinguptothe relocation.

5.147. Committing,inparticular,toprovideafreerelocationandalltheadvantagesof

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theMarketFacilitator’sexperiencewiththepreviousmove,willbeofgreat

assistanceinensuringthat,shouldanyTemporaryMarketunitsbecomevacant,

therewillbetraderstofillthem.TemporaryMarketTraderswhoreceivethe

assistanceofafreerelocationwillalsobeunderlessfinancialpressurewhenthe

NewMarketAreaopensandhavethereforeagreaterchanceinmakingasuccess

oftheNewMarket.

5.148. ItisthereforeimportanttomakethisoffertoasmanyTradersoperatingfromthe

TemporaryMarketaspossible– notjustthoseTraderswhomovedfromthe

Market– inordertoprotecttheinterestsoftheMarketasanentity.Itisvery

muchintheinterestofallparties– Traders,MarketOperatorandGrainger– that

thefinalmovetotheNewMarketArea isasuccess.

b. ThePeriodforconsideringtheOffer

5.149. TheperiodforconsideringtheofferissimilartothatfortheTemporaryMarket:a

minimumofthree months andpossiblylonger.

5.150. TheNewMarketAreaSchememustinclude the“NewMarketOfferDate”,whichis

“thedatebywhentheofferofaLicencemustbeaccepted(ordeclined)beingthe

datewhichisthree(3)monthsbeforethedatewhentheNewMarketAreais

projectedtoopentothepublic”(Sch.2,p.9,DDV).

5.151. ThereisnofixeddateformakingtheTraderstheirNewMarketAreaoffers.

However,GraingermustprovidetheTraderswithatleastsixmonths’noticeof

theNewMarket Area’s openingdateandtheTemporaryMarketclosure(para.

2.12,Sch.3,DDV).Graingermustalso“submittheNewMarketAreaSchemeto

theCouncilnolaterthansixmonthspriortotheprojectedopeningoftheNew

MarketAreatothepublic”(para.7.3,Sch.3,DDV).Graingerisalsoprohibited

fromoperatingtheNewMarketArea“otherwisethaninaccordancewiththe

approvedNewMarketAreaScheme”(para.7.5,Sch.3,DDV).

5.152. Althoughnotexpresslystated,itseemsclearthattheintentionistomirrorthe

obligationsfortheTemporaryMarketandprovidetheTraderswiththeirNew

MarketAreaOffersatleastsixmonthsbeforetheTemporaryMarketclosesand

theNewMarketAreaopens.Onthatbasis,Traderswillhavethreemonths for

considering theofferbeforetheNewMarketOfferDate.Iamthereforesatisfied

thatTraderswillhavesufficienttimetoconsidertheirNewMarketAreaoffers.

5.153. Thisarrangementis thereforeappropriate,forthesamereasonsaswiththe

TemporaryMarket.Insummary:

i) Tradersareprovidedwiththeofferdetailsingoodtime;

69

ii) Traderswillhaveaminimumofthreemonths forconsideringtheoffer,

bywhichpoint theNewMarketAreaislikelytobesufficiently advanced

thattheycanseetheirunitlocationandmakeaninformeddecision;

iii) Havingacut-offpointforacceptingtheofferassiststheMarket

Operator:hecanrecruitanyreplacementtraderstoensureafullMarket

onrelocationandalsoplanthelogistics foranefficientrelocation.

c. Traderswhodonotrelocate

5.154. ShouldaQualifyingTemporaryMarketTradernotwishtotakeastallonthese

terms,theMarketOperatorcanthenofferthatstall“tosuchotherpersonasit

shalldetermine” (para.7.9,Sch.3,DDV).Clearlythisissensibleinordertoensure

thattheMarketremainsatfullcapacityandcontinuestothrive.

5.155. IfaTraderdoesnotwishtotakeaNewMarketAreaunit,theMarketFacilitator

must“assistindividualsworkingattheMarkettofindsuitablealternative

employment”iftheydecidenottomovetotheTemporaryMarket and/orthe

NewMarketArea (para.2.1(f), Sch. 3,DDV).Asnotedabove,thiscommitment

couldbeofgreatbenefittoTraderswhochoosetoleavetheTemporaryMarket

beforetheNewMarketAreamove.

d. TheNewMarketAreaOffer:

5.156. TheNewMarketAreaSchememustinclude:

AnobligationtoofferQualifyingTemporaryMarketTraders:

(1) ALicenceofaunitintheNewMarketAreawhichshall:

(A) HavethebenefitofallServices;

(B) Be of an appropriate layout having regard to: i) the QualifyingTemporaryMarketTrader’slicensedunitintheMarketinthecaseofaQualifyingTemporaryMarketTraderwhohadaLicenceofaunit in the Market; or ii) the Qualifying Temporary MarketTrader’s licensed unit in the TemporaryMarket in the case of aQualifyingTemporaryMarketTraderwhohadaLicenceofaunitintheTemporaryMarketbutnottheMarket;

(C) Subject to (D) below, a licence feewhich equates to the LicenceFeeforthefirstthirtymonthsfromtheopeningoftheNewMarketArea;

(D) A licence fee which equates to a discount of thirty percent lessthantheLicenceFeefortheReducedLicenceFeePeriod.

(2) Freerelocation(includingallreasonableremovalcostsandexpensesbutexcludinganydangerousorunlawfulorunauthorised

70

equipment)fromtheTemporaryMarkettotheNewMarketArea.(Sch.2,p.8-9,DDV).

5.157. Further,theDDV providesthatGraingerwill

“provideeachAcceptedQualifyingTemporaryMarketTraderwithaunitintheNewMarketAreawhichisnosmallerthan:

(a) the Accepted Qualifying Temporary Market Trader's licensedunitintheMarketinthecaseofanAcceptedQualifyingTemporaryMarketTraderwhohad aLicenceofaunitintheMarket;and

(b) theAcceptedQualifyingTemporaryMarketTrader'slicensedunitintheTemporaryMarketinthecaseofanAcceptedQualifyingTemporaryMarketTraderwhohadaLicenceofaunitintheTemporaryMarketbutnottheMarket.”(para.7.8,Sch.3)

5.158. ThislargelymirrorstheOfferfortheTemporaryMarketandmyconclusionsare

thesame.

5.159. The“Services”obligationissufficientatthisstage;againanyremainingmatters

(suchasextraction andotherdetailedbusiness-specificmatters)willbethe

responsibilityoftheMarketOperatorandonlyariseoncethedetailedplansare

beingmadeforindividualunits.Itisthereforereasonablethatsuchmattersare

notdetailedinthes.106orDDV.

5.160. Intermsofsizeandlayout:GraingermustprovideeachAcceptedQualifying

TemporaryMarketTraderwithaunitnosmallerthantheirMarketunit(forthose

whohadaLicenceintheMarket),orthantheirTemporaryMarketunit(forthose

arrivingaftertheTemporaryMarketmove).Itis appropriatetoguaranteethat

theNewMarketAreawillprovideTraderswithatleastthesameamountof

tradingspaceasthecurrentMarket.

5.161. GraingeralsoprovidesacommitmentthateachQualifyingTemporaryMarket

Trader’sunitintheNewMarketAreawill“beofanappropriatelayout having

regard” totheTrader'slicensedMarketunit(iftheyhadone)orTemporary

Marketunit(iftheyarrivedaftertherelocation).Itwillbereallyhelpfulto

Tradersthatthelayoutoftheir NewMarketunitswillrelatetotheTraders’

originalunits,whichtheywillhavebeenabletocustomiseandadaptovertime.

Thisisnotsomethingoftenguaranteedduringrelocationsasitnecessitatesextra

effortanddiscussions;inmyviewthisobligationdemonstratesGrainger’sefforts

tomaketherelocationsassuccessfulforTradersaspossible.

5.162. Ofcourse,thedetailedplansandnegotiationsforeachindividualTraderarefarin

thefutureatthispoint.Atthisstage,theobligationisreasonableandsufficientto

protect theTraders’interests.

71

5.163. The “freerelocation”offer isidenticaltothatdiscussedabove (paras 5.96-113).

AswiththeTemporaryMarket,giventheunknownfactors,thecurrentobligation

hasanappropriatelevelofdetailand itisnotfeasibletobemorespecificatthis

stage.Asbefore,itisclearthatGraingerandtheOperatorareawareofthese

mattersandIamconfidentthattheywillbeaddressedattheappropriatetime.

5.164. Atthisstage,Iamsatisfiedthattheobligationsaresufficienttoprovideall

reasonableassurancethatthemovetotheNewMarketAreawillbesuccessfully

carriedout.Also,theOperatorandthemajorityoftheTemporaryMarket

TraderswillhaveexperiencedtherelocationtotheTemporaryMarket. Iwould

expectbothpartiestoapplytheexperiencelearnedthentothissecondmove.

5.165. IamthereforesatisfiedthatthecontentoftheOffersetoutinthe“NewMarket

AreaScheme” definitiongivessufficientandappropriatedetailatthisstageand

gives allreasonableprotectiontotheTraders’interests.Theseobligationsare

likelytocreateasituationinwhichTradersmakeasuccessfulreturntoathriving

NewMarketArea.

xii) ClosingtheTemporaryMarket

5.166. ThearrangementsforclosingtheTemporaryMarketmirrorthoseforclosingthe

currentMarket.GraingercannotclosetheTemporaryMarketuntiltheNew

MarketAreahasbeen“PracticallyCompletedandisreadyforoccupation” (para.

7.6,Sch.3,DDV).TheMarketFacilitatorisunderanobligationtoassist

TemporaryMarketTraderstokeeptradingforaslongastheTemporaryMarket

isopen(para.2.1(c), Sch.3,DDV).TheTradersarealsotobegivenatleastsix

months’noticeoftheTemporaryMarket’sclosure(para.2.12, Sch.3,DDV).These

obligations provideimportantreassurancethattheinevitableperiodofclosure

forphysicallyrelocatingthestallswillbe nolongerthannecessary.

5.167. Finally,“fromtheopeningoftheNewMarketArea tothepublic,”Graingermay

not“operatetheTemporaryMarket” (para7.12,Sch.3,DDV).This obligation

ensuresthatGraingerdoesnotdeveloptwomarketsatthesametime afterthe

relocationtotheNewMarketArea (oneintheNewMarketAreaandoneinApex

House).ThisprotectsthecurrentTradersfromGraingercreatingintenselocal

competitionbyallowingasecondmarkettodevelopinApexHouse.

xiii) OtherMatters

5.168. HereIaddressfour matterswhichareoutsidethescopeofthes.106agreement.

5.169. OpeningTimes:asdiscussedinSection3,IaminstructedthattheTemporary

MarketandNewMarketAreawillbeopenonSundays,makingtheMarketopen

sevendaysaweek.Theopportunitytotradeonanother52primedays is

valuable,however itshouldnotbecompulsorytotradesevendaysaweek,asthe

72

pressurecanbetoogreat.Smalltradersmustbeableshutonedayaweek.With

theindividuallylockableunits,Iamconfidentthatthiswillbepossibleinboththe

TemporaryMarketandNewMarketArea.

5.170. ResidentialImplications:Iaminstructedthattherearenorelevantrestrictions

inthe planningpermissionsforeitherApexHouseortheNewMarketAreawhich

might unduly restricttheTemporaryMarketorNewMarketArea’sopeninghours

ordeliverypatterns asaresultoftheflatsabove.

5.171. ServicingandDeliveryfacilities: Ihaveseendrawingsandplansforthe

servicinganddeliveryfacilitiesforbothApexHouseandtheNewMarketArea.

ApexHouseprovidesfourloadingbays:twowithintheserviceyardanda

minimumofoneeach(dependingonthesizeofvehicle)onSevenSistersRoad

andStonebridgeRoad.TheservicingoftheMarketwillrequireadetailedplan

butIamsatisfiedthatthefacilitiesareappropriatefortheMarket’sneeds.Three

ofthemarketssurveyedabove(paras4.49-61)haveless inthewayofservicing

spaceandallstillfunctionwell.TheNewMarketAreawillhavetwoloadingbays

inSuffieldRoad,directlyadjacenttooneoftheMarketentrances.Therewillalso

beasecureserviceroadthat Traderswillhaveaccess tofordeliveries:this

containsspacefortwo 11-metrelorriesandthreevans.Throughthecombination

ofthesefacilities IamsatisfiedthatthattheTraderswillbeabletoservicetheir

unitscomfortably withtheassistanceofadetailedservicingplan.

5.172. Parking: Iaminstructedthattherewillnotbeanyparkingavailablespecifically

fortheMarket,eitherTradersorcustomers.AlthoughtheMarketcurrentlyhas

limitedparkingfacilities,threeoutoffouroftheMarketssurveyeddonothave

anyatall(Section4).Inmyview,thisisaluxuryandnotaprerequisitefora

successfulmarket:loadingandservicingfacilitiesarefarmoreimportant,

particularlygiventhattheMarketenjoys suchexcellentpublictransportlinks.

73

SECTION5:Conclusions

5.173. Insummary,theobligationsinthes.106andtheDDV arecomprehensive,

generousandreasonable.Everystageandeveryaspectoftherelocationprocess,

theoccupationoftheTemporaryMarket,andtherelocationtotheNewMarket

Areahasbeencarefullyconsidered.Theobligationsrelatingtoeachstageare

necessaryanduseful.Therearenofurtherimprovementstobemadetothe

existingobligationsthatIcan identify,norcan Ithinkofanyadditional

precautionswhichwouldfurtherassistinensuringtheMarket’scontinued

successthroughoutthisprocess.

5.174. Lookingbeyondthelegalobligations,thisisauniqueopportunitytocreate

somethingexciting:anewandinvitingenvironment forthispopularMarket

whichwillensureitscontinuedandgreatersuccess.TheMarkethassufferedfor

decadesfromunderinvestmentandtheUSMReportconcludedthat“visually

thereisabiglackofsparkinthemarketwhiletheambienceisoftenthevery

opposite– itislivelywithmusicandactivityatmosttimes”(p.11).Thisscheme

presentsthechancetocreateaphysicalsettingworthyofthatatmosphere.

5.175. IcanpositivelyconfirmthatIbelievethattheDDVands.106presenttheTraders’

bestpossibleandlikelyopportunityforcreatingasecureandbrightfuturefor

theirMarket.

74

SECTION6:Considerationofthe2008“SevenSistersMarketReport”byUSM

6.1. TheNewDealforCommunitiescommissionedthe“SevenSistersMarketReport”

ontheMarket whichwascompiledbyUrbanSpaceManagementinMay2008

(CD11/6), towhichIhavereferredabove.ThisReport hasbeenrepeatedly

referredtointheMarketTraders’StatementofCase.Manyofitsassumptions

andconclusions wereappropriateinthecircumstancesof 2008.However,the

position in2017isdifferentinmanycrucialways:theReport’sconclusionson

futurerentlevelsandtheMarket’sviabilityarenolongerrelevant.

6.2. TheMarketdescribedbyUSMin2008is verysimilartotoday,asIhavenoted

throughoutthisProof:thesoreneedforinvestment;thepoorconditionofthe

building;thecomparativelylowrents;thevibrancyoftheatmosphere;the

Market’sinvisibilityfromthestreetandsoon.

6.3. Grainger’sscheme in2008,however,wasentirelydifferent.First,the

developmentbriefforthesiteatthetime“didnotincludethemarketasagiven”

and,asaconsequence,“notasingleretailunitintheGraingergroundfloordesign

isaslargeasthecurrentmarket”(p.16).Grainger’sschemein2008wasfor

individualretailunitsalongSevenSistersRoad,theHighRoadandWestGreen

Roadofvaryingsizes.TherewasnounitspecificallydesigntoreplacetheMarket

hall,asnotedintheReport: “notasingleretailunitintheGrainger groundfloor

designisaslargeasthecurrentmarket” (p.16).Thiscanbeclearlyseenfromthe

draftfloorplanforthe2008application(Appendix8).

6.4. Given thepremiumrentlevelsontheHighRoad, USMconcluded that “thebest

optiontoevaluateiswhetherthismarketcouldoccupytheSevenSistersRoador

WestGreenRoadsides”(p.13).Evenwhencombined,however,thesetwoareas

ofretailspaceonlyprovided9,149sqftingrossspace,producingapproximately

5,489sqftinretailspace.Neitheroptionwouldthereforehaveaccommodatedall

oftheTraders,whoneededatleast6,150sqftin2008.Thisclearlyhadanimpact

onUSM’sviabilityassessment,giventhelossofatleastsomeoftheTraders.

6.5. IdiscussedinSection4 mycriticismofUSM’s estimateofTraders’licencefeesin

2008:bymycalculationsUSMiswrong tostatethatthelicencefeewas£31/sqft

(seeUSMReport,pp. 8-9).Onthefigurescited,thelicencefeep.a.wasactually

£39.41/sqft.Asaresult USM’s calculationsbasedonafeeof£31/sqftare

incorrect.AlsoIhavenoted thatthesefees for“internal”units haveincreasedby

52.25%since2008 andIassumethattherewillsimilarlyhavebeenafeeincrease

for“front”units(asexplainedaboveatpara.4.9-11).This isclearly sustainableas

theMarketisfullyletwithawaitinglist of14traders.

6.6. AtSection5.b,USM estimates thatTraders’feeswillrisetoaround£90/sqft,an

increaseof197%from£31/sqft.These calculationsaretotallyirrelevantin 2017:

75

i. Traders’LicenceFeeshavenowbeenfixed,asperSection4;

ii. TheaveragelicencefeespresentlypaidbytheTradersare£60/sqft

and£64/sqft,sothepercentageincreaseis inaccurateanyway;

iii. USMhad torelyonrentfigures/sqftforGrainger’s2008plan,based

onhavingmultiplesmallerunitsandnothingthesizeoftheMarket

hall.Thisisasignificantdifferencefromthepresentposition:

GraingerisnowobligedtoprovideasingleMarketspacetoshell

condition,whichtheMarketOperatorwillfitout.

iv. USMassumedanadditionalservicechargeof£3/sqft andan

additionalcostof£15/sqftthroughtheMarketOperatorpassingon

itsrunningcosts– thisisnotthecaseunderthefixedschemeof

LicenceFees;

v. USMassumedthattheTraderswouldhavetopayincreased

businessratesof£10/sqft,anincreaseoftentimestheirpositionin

2008.IaminstructedthatonlyoneTradercurrentlypaysbusiness

rates:everyotherTraderwillbeexemptastheirpremisesarebelow

thecurrentrateablevaluethresholdof£12,000.

6.7. Crucially,inthecircumstancesconsideredbyUSM,therewasnoprovisionfora

TemporaryMarket:“Thedevelopmenttimespanmeansthatimpetusand

momentumwouldbelost.Thetradersallneedtocontinueoperatingtheir

businessesnowandwouldnotsustainabreakof2-3years.Itismorelikelythat

thefragilityofindividualbusinesseswouldmeanthatmanywouldsimplyclose

down” (p.4).Assetoutabove,theTemporaryMarket isan essentialelementof

theGraingerscheme:withoutit,theMarketwouldbelost.

6.8. AllofthesefactorsledUSMtoconcludethat“wethinkthatitwillnotbesensible

oreconomicallyviabletorelocatethismarkettothe[2008]scheme”(p.20)and

advisedthat“thefutureviabilityofthetraderintheSevenSistersMarketisnot

dependentonoperatinginthislocation.Thereisachanceofsavingthetradersby

movingthemtoalternativelocations”.Thisiscertainlynotmyviewinthe

circumstancesof2017:IamsatisfiedthattheMarkethasauniqueopportunityto

relocateandthriveintheNewMarketArea.

6.9. Inmyview,therefore,theUSMReportprovidesusefulbackgroundandhistoryfor

theMarket.Italsoshowsthat themajorityofTradershavealreadyweathereda

significant increaseinlicencefees.However,theReport’sconclusionsonthe

Market’sviability,onrentincreasesandothersuchmatterscannot bereliedon in

anymeaningfulwaywhenconsideringthecurrentScheme.Theseconclusions

are basedonfacts,estimatesandcircumstanceswhichhavechangedenormously

overtheinterveningnineyears.

76

SECTION7:ResponsetotheMarketTraders’StatementofCaseandtheWardsCornerCoalitionScheme

7.1. IhavebeenprovidedwiththeStatementofCase onbehalfoftheSevenSisters

MarketTraders.EveryissueraisedbytheTraderswhichisspecifictotheMarket

initscapacityasamarket(ratherthanasacommunitycentreorhumanrights

issues)hasbeenaddressedindetailintheabovesections.

7.2. InthissectionIidentifytheseissuesandstatewheremyopiniononthemcanbe

foundinmyreport,whereIamqualifiedtogiveanopinion.Paragraphnumbers

refertotheMarketTraders’StatementofCase.IalsoaddresstheWardsCorner

CoalitionScheme(alsocalledthe“AlternativeScheme”),assetoutintheDesign

andAccessStatements(“DAS”)submittedwiththatplanningapplication.

i) TheTraders’StatementofCase

7.3. Paragraph11(a)and(b)refertowebsitesrecognisingtheMarketasa“significant

Londontouristattraction”andtoastatementbyformerMayorBorisJohnson’s

spokespersoninsupportoftheMarket.Iappendscreenshotsofthesewebsites

andthetextofthestatementatAppendix9.

7.4. Paragraph46 (a),(b),(c) and(d) allreferenceincorrectandoutdatedlicencefee

estimates. Section4setsoutmydetailedcommentaryonGrainger’supdated

commitmentsontheLicenceFees:asIhaveshowntheincreasesin feeswillbe

nothinglike300%(InotethatIamnotqualifiedtoaddressthepointsonEquality

ImpactAssessmentissues).

7.5. Paragraph46(a) statesthattheexistingrentsinthemarketareapproximately

£31/sqftperyearbutthatthe“likelyfuturerentpayablebymarkettraders”

wouldbe“around£90/sqftperyear”.Ihaveexplained inSection4 thatIdonot

understandwhereUSMhavegotthefigureof£31/sqftp.a.from:itseemstometo

bewrong.MycalculationssuggestthatrentsinMay2008were£39.41/sqftp.a.

for“internal” units,themajorityoftheMarket.8

7.6. TheUSMReport’scalculationsonthelikely futurerentpayablebymarkettraders

weremadeinsignificantlydifferentcircumstancesfromthecurrentsituation,asI

setoutinSection6.Thebasesforthecalculationsofanincreasefrom£31/sqftto

£90/sqftareno longerrelevant.

7.7. Paragraph 46(b) isbasedonanincorrectunderstandingoftheformers.106

which,inanyevent,hasbeensupersededbytheDDV’sLicenceFeesschemeand

8 AsIexplainabove(atpara.4.9-11)Idonotbelievethatlicencefeesin2008were“roughlydouble”(£80/sqft)for“front”units(giventhattheyarenowanaverageof£64/sqft),althoughitisverylikelythattheywouldhavebeenchargedmorethan“internal”unitson£39.41andlessthanthecurrent£64/sqft.

77

theobligationtohaveregardtotheCouncil’spoliciesontheMarket("New

MarketAreaScheme”,Sch.2,p.8-9 DDV).Ihavealsodiscussed abovethatitisin

theMarketOperator’sinteresttomaintainthecurrentmixtureoftheMarket,in

thatpreservingtradersisabetteruseofresourcesthanseekingnewonesandin

thatthereisalot ofuntappedpotentialinthisuniquecombinationofTraders

fromLatinAmericaandotherunusualnationalitiesandculturalgroups.

7.8. Further,assetoutabove(para.4.5),currentlicencefeesare,onaverage, £60/sqft

forinternalunitsand£64/sqft p.a. forunitsfrontingtheHighRoad.Idonot

understandthefigureof300%increase,unlessitisamistakeincalculatingthe

percentagedifferencebetween£30and£90/sqft(anincreaseof200%).This

miscalculationofa300%rentincreaseisalsomentionedatparagraph60,as

evidencethattheTraders“arelikelytolosetheirbusinessesandlivelihoods”.As

IsetoutinSection4,inmyviewitisascertainasitcanbethattheTraderswillbe

abletoweathertheLicenceFeeincreasesproposedinthe DDV:theworstcase

scenarioisanaverageof6%increaseperyearacrossthefiveyears.

7.9. Paragraph46(c)statesthatanincreaseinrentfrom£30/sqftto£90/sqftwould

“decimatetheexistingMarketbypricingoutthecurrentTradersandremoving

LatinAmerican,Afro-Caribbean,AfricanandotherBMEbusinessowners”.In

Section4I notedthatIhavenotseenfiguresforindividualTraders’turnoveror

profitsbutthattheMarkethasalreadyhadanincreaseinlicencefeesfrom

£39.41/sqftto£60/sqftfor“internal” unitsandfromanunknownrenttoan

averageof£64/sqftfor“front”units.ClearlythishasnotdecimatedtheMarket

andthereisstillavibrantmixofculturespresent:itisfullandthereisawaiting

listof14traders.

7.10. Paragraph 50 statesthatthe“Councilhas…overlookedthefindingsintheUrban

SpaceManagementReport“theimpactoftheincreasedcostsmeansthenew

developmentisunviablefortheexistingmarketbusiness”.” Ihaveanalysedthe

USMReportinSection6:theReport’sconclusionsontheMarket’sviabilityand

estimatedincreasesinrentorcostsfrom2008arenolongerrelevanttothe2017

situation:circumstancesareverydifferent.

7.11. Paragraph54 statesthat "theavailableevidencestronglysuggeststhat, forthe

vastmajorityofmarkettraders, theOrderSchemeisunlikelytoenabletheir

continuedtrading”.Asmentionedabove,theevidencecitedintheStatementof

Caseregardingrentisincorrectandthisstatementisbasedonanincorrect

readingofthesupersededs.106agreement.TheDDV,inmyopinion,provides

everyreasonableassurancethateveryTraderwhowantstomaketherelocations

willbeabletodosoandcontinuetrading.

7.12. Paragraphs87-92arguethatthes.106failstosecurethefutureoftheMarket.

The licencefee figurescitedareagainbasedonamistakenunderstandingthat

78

currentMarketrentsare£31/sqft.Thequotedpercentageincreasesare

thereforeincorrect,evenonthepreviouss.106,andaresupersededinanyevent

bytheLicenceFeesintheDDV.

7.13. Paragraph88(c)arguesthatthes.106wouldnotenablea“significantproportion”

ofTraderstorelocate,citinginsupportdatafromthe2012MarketandBusiness

Survey(presentedintheEqualityImpactAssessmentbyAecom,takenfrom

Question11oftheSurvey,CD11/4).Thesequestionsandanswersare basedon

outdatedproposalswhichhavebeensupersededbytheDDVobligations.I

remainconfident,asIhavedescribedindetailinSection5,thattheTraderswill

besupportedincontinuingtheirbusinessesintheTemporaryMarketandNew

MarketArea.

7.14. Paragraph89statesthat anysuggestion thatthelong-termfutureoftheMarketis

secured“byreasonsofprojectedincreased footfallorspendingisalso

fundamentallyundermined”byastatementmadetothePlanningSub-Committee

on25th June2012that“therecouldbenocertaintyaroundthisissueasitwasnot

possibletopredicthowsuccessfulthenewmarketwouldbe”.Ofcourseitisright

thatpredictinghowsuccessfultheNewMarketAreawillbeisdifficultandcannot

possibly beacertainty.Inmyview,however,theanticipatedimprovementsin

thebuiltenvironment,acoordinatedmarketingandadvertisingplan,amore

visibleandeye-catchingentrance, andthelongstandingcommunitysupport

alreadyenjoyedbytheMarketmeanthatIamascertainasIcanbethatthe

Markethaseverychanceofthrivinginitstemporaryandpermanenthomes.

7.15. Paragraphs121-127statethattherearealternativeplansandlocationsforthe

development.InsofarasthisargumentreliesontheWardsCornerCoalition

schemeforre-providingtheMarket,Idiscussmyconcernswiththisbelow.In

summary,theseare:

i. ThereisverylittledetailintheDesignandAccessStatementsthatI

haveseenwhichdescribetheplan:therearethereforenoguarantees

orobligationstothelevelofdetailgoneintobytheDDV.

ii. TheWCCplantousethecornerbuildingasaTemporaryMarketfor

theTradershasnotbeenthoughtthroughinanyseriousway:using

theentirecornerbuildingwouldnotbeenoughspacetohousethe

currentTraders,andtheschemeonlysuggestsusingtheground

floor.Thetotalgrossareaofallthreefloorsis620sqm,or6,674sqft.

The Traders'stallsaloneneed6,200 sqftevenwithoutspacefor

circulationandservices.

iii. Assetoutabove(paras4.39-40), there isnodetailgivenonrent

althoughitishintedthatanincrease willbenecessary.Usingthe

79

roughfiguresIhaveestimated thattheWCCschemewould

necessitateanincreasetoatleastthefeesintheDDVschemeand

probablymuchhigher,giventheviabilityissues.

iv. TherearenoguaranteesofthekindgivenintheDDV:nothingon

provisionofservicesintheTemporaryMarket, nothingonstallsize

ineithertheTemporaryMarketortheNewMarketArea,nothing

abouthowlongTraderswouldhavetodecideiftheywantedto

accepttheoffer,noguaranteesonlicencefeesandsoon.

7.16. InsofarasIamqualifiedtoaddressthem,IamthereforeconfidentthatmyProof

addressestheobjectionsraisedintheTraders’StatementofCase.

ii) TheWardsCornerCoalitionScheme

7.17. AtthispointInotethattherearenoalternativeproposalsatallprovidingany

kindofdetailalongthelinesoftheDDVands.106agreement.Theonlyother

schemeofwhichIamawareisthatsetoutintheWardsCornerCoalition’s

planningapplication.Ihaveseen theDesignandAccessstatementforthis

scheme(CD9/15) butitcontainssolittlepracticaldetailthatitisdifficultto

compareitinanymeaningfulwaywiththeGraingerplans.HereIpickoutthree

keyissueswiththeWCCschemeaspresentedinthe DAS.

7.18. Thereare no othercomparable guaranteesinanyotherschemethatthe Traders

wouldbeprotectedinreturningtoarefurbishedMarketastheyareunderthe

currents.106andDDV.Amarketoperatorthat hadtospendsignificantsumson

refurbishinga market would beabletoterminateeverylicenceintheMarket and

refurbishtheMarketwithoutthecostanddistractionoftryingtokeepthecurrent

Traderstrading.Themarketoperatorcouldthenseeknewtraderstofillthenew

Marketinkeepingwiththedevelopmentstyle.AsI haveexplained,thiswouldbe

unusualbut possible:themarketoperatorcanterminateanylicenceonaweek’s

noticeandtheTradersneedreassurancethatthiswouldnothappen.Underthe

Graingerscheme,theTradersareprotected.

7.19. IntermsofprotectingtheTraders’continuityofbusinessduringrefurbishment,I

notethattheWCCDASproposesrelocatingtheTraderstothe“cornerbuilding”

duringtheirproposedworks(pp. 76-77,DAS).Itappearsthattheplanistouse

onlythegroundfloorofthecornerbuildingtohousetheTraders(thefirstand

secondfloorsareintendedtobeusedasflatsandanartgallery).

7.20. Thereis nothinglikeenoughspacetohousethecurrentMarket here:evenusing

theentirecornerbuildingwouldbeinsufficient.Drawings in theWCCDAS

indicatethatthetotalgrossareaofallthreefloors is620sqm,or6,674sqft (pp.

42-44,DAS).Traders’stallsaloneneed6,200 sqftevenwithoutspacefor

circulationandservices.

80

7.21. IcannotemphasiseenoughhowimportanttheTemporaryMarketistomy

supportfortheGraingerscheme.Withouthavingapre-preparedspacewhichis

properlysetupasafunctioningmarkethallwithappropriateservices,enough

room,easilyaccessiblebythepublic,andclosetotheexistingMarket,theMarket

anditscommunityofTraderswouldbeataseriousriskofsimplydisintegrating.

Ihavealreadydescribedhow difficultitwouldbefortheseTraderstosurvive

withouttradingforanythingmorethanacoupleofweeks.

7.22. Inmyview,theissueofprovidingatemporarymarketisaseriousweaknessin

theWCCscheme.Ontheinformationavailable,theWCCschemehasnotgrasped

thescaleoftheissuesinvolvedinre-providingtheMarket orkeepingtheMarket

tradingwhilstrefurbishmenttakesplace.There arenoguarantees forTraders

thattheywouldbeabletotradeanywhereduringanyrenovationsperiod,neither

arethereanyindications ofhowlongthatrenovationperiodmightbe.Farfrom

guaranteeingthe Market’scontinuedexistence,theWCCschemeposesarisktoit.

7.23. Ihavesetoutmyestimatesforthelicencefeesthatwouldneedtobechargedina

WCCrefurbishedmarket above atparagraphs4.42-43.The DASprovidesvery

littledetailbutitseemstomesimplyinevitablethattherewouldberent

increases.Again,therearenocomparableguaranteestotheGraingerscheme

thatthelicencefeeincreaseswouldbelimitedtoanythinglikethecompetitive

DDVrates.

7.24. Inmyview,theWCCschemedoesnotpresentacomparablealternativetothe

OrderScheme.Theguaranteesgiveninthe DDVands.106areessentialto

protectingthecontinuedsuccessoftheMarket.Thefactthattherearenosimilar

guaranteesinanyotherplanfortheMarket’sfuture,indeedthatthereisnoother

planatallwiththislevelofdetail atall,isacrucialconsideration.Intermsofrisk

reductionfortheTraders,theOrderSchemepresentsfargreatersecuritythan

anyalternatives.Aschemewhichfailstomatchalloftheobligationsprovidedby

GraingerwouldbefarriskiertotheMarket’schancesofsurvival.

81

SECTION8:ConclusionsandSummary

8.1. ThepurposesofmyproofaretoreviewthestateoftheMarket;toassess

Grainger’scommitmentstoafixedschemeofLicenceFeesandpossible

alternatives;andtoreviewandcommentontheobligationsinthes.106and

DDVforre-providingtheMarketintheNewMarketArea.Ialsoconsiderthe

2008 USMReportandrespondtotheMarketTraders’StatementofCaseandthe

WardsCornerCoalitionScheme.

8.2. MyoverallconclusionisthattheMarketclearlyneedssignificantinvestment

andthisOrderschemeoffers thebest,mostcomprehensiveandsafestrouteto

achievingthegoalofaflourishing,reinstatedMarketinthesamelocation.

8.3. InSection3,Ireview theMarket andconcludethattheMarketisunique,vibrant

andtradingtocapacity:Tradersarebeingsuccessfulindifficultconditions.

However,theMarkethasverylittleappealtoanybodynotalreadyusingit;the

entrancesarepoorandundefinedanddonotencourageacasualshopper.

8.4. Thepoorconditionofthebuildingmeansthatchangeisinevitableand

necessary tosecuretheMarket’sfuture:itissimplynotfeasiblefortheMarket

tocontinueoperatingindefinitelywithoutinvestment.TheMarketistherefore

notoperatingatanythinglikeitsbusinesspotential:itlacksdirection,leadership

andabasic marketingplan.Thisisnotacriticismbutanindicationofthescale

oftheopportunitiesavailable. Thereisachance tocreateahighprofile,modern,

clean,spaciousmarketwhichwillonlyencourageadditionalfootfall.

8.5. ThisMarketisripeforchangeanddevelopmenttoenhanceitscurrentoffering

andcomposition,nottochangeit. ThisOrderSchemerepresentstheTraders’

bestpossibleopportunitytokeepandimprovetheirMarket.

8.6. InSection4Idiscuss licencefees,which werealwaysgoingtobeamajor

concernfortheTraders.Graingerhascommitted to afixedschemeofLicence

Fees,beginningintheTemporaryMarketandending after30monthsinthe

NewMarketArea(includinga30%discountforthefirst18months).The

LicenceFeesunderthisschemearecapped andrepresentamanageable

increase.This decisionisahugebenefittoTradersintermsofbusiness

planning:theyearsofcertaintythatthisprovides willbeofrealvalueasthe

TraderssettleintotheirnewMarket.

8.7. Iamconfidentthatthese figuresandincentives are affordableandgivetheNew

MarketArea everychanceofsuccess.Infact,underthefixedscheme,some

Traderswillpayless thantheydonow.ForTraderswhosefeesincrease,even

includingVATthelargestincrease overandabovepresentaveragerents is

33.55%overfiveyears.IamasconfidentasIcanbethatasmanyTradersas

wanttowillbeabletocontinuetradingintheNewMarketArea.

82

8.8. WithoutGrainger’sscheme,licencefeeswillalmostcertainlyincreasewhatever

happenstotheMarket– whetheritcontinuesasitisona“donothing”basis,or

withrepairsona“makedo”basis,orundertheWCCscheme.Theadditionof

VATtoTraders’licencefees is,realisticallyspeaking,inevitableinanysituation

involvingrepairs.Underanyofthese alternative options,Traders’feesarelikely

tobehigherthanundertheGraingerscheme.

8.9. Althoughthereisanelementofspeculation – giventhatthisissomeyearsaway

– myinstinctisthat,inthelongterm,thistrendwouldcontinue and theTraders’

feeswouldbelowerunderGrainger’sschemethanunder the otheroptions.

8.10. Itisveryimportanttoemphasisethatsettingaviablerentistherefore inthe

MarketOperator’sinterestsjustasmuchasitisintheTraders’:market

operatorsneedtokeeptheirmarketsfullandbustling.Iamthereforeconfident

that,evenafterthefirst30monthsintheNewMarketArea,theLicenceFee

levelswillnotsuddenlyincreasebeyondthebudgetoftheTraders.Comfortcan

betakenfromtheobligationtosetLicenceFeesat“alevelthatisconsistentwith

theCouncil’spolicyobjectivetoattractandpromotelocalindependenttraders”.

8.11. InSection5Ianalyse theprovisionsofthes.106andDDVproposedbyGrainger.

TherearecriticalissuesthatmustbeaddressedfortheMarkettosuccessfully

relocateandthrive initsfinallocation.Alloftheseissueshavebeenconsidered

andaddressedinthes.106andDDVobligations.Iwouldgoasfarastosaythat

therearenofurtherreasonableadditionstothes.106thatIcanidentify.

8.12. TheobligationtocreatethenewMarketismetbythes.106andDDV,with

currentfloorplans showingenoughspacetorelocateallTraders matchingtheir

existinguseoffloorspaceintheNewMarketArea,hencetheguarantee ofan

identicallysizedstallintheNewMarketArea.Graingermustgivesixmonths’

noticebeforeclosingtheMarketandtheTemporaryMarketatApexHousemust

be readyforoccupation.Ihavediscussedtheimportanceofa rapid relocation

witha movingcompany andIamconfidentthiscanbeachieved.Thiswillallow

businesscontinuitywhichiscrucialto maintainingcustomersupportand

Traders’cashflow.

8.13. ThelocationoftheTemporaryMarketiscrucialtodeliveryoftheNewMarket

Area;ApexHouseanditsproximitytotheMarketandtheNewMarket Area are

vitaltotheMarket’sretainingitsidentity overtherelocations.TheTemporary

MarketisgoingtoprovidemorefloorspacethanisavailableintheMarket:the

latestfloorplanshows12,472sqftofgrossinternalareaproviding7,740sqftof

rentablespace(compared with6,200sqft now).TheOperatorwillbeableto

accommodateallexistingTraderswithadegreeofflexibility.Thisdemonstrates

arealwillingnessonGrainger’spartfortheprojecttosucceed,astoooftenthis

isspacethatissacrificedtocommercialpressures.

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8.14. TherelocationOfferwillbeofferedtoa)anyTraderwhoisoperatingaunitat

thedateoftheClosureNoticeandb)hasbeenoperatingaunitforthreemonths

beforetheClosureNotice.ThisguaranteesthatallcurrentTraderswillbe

offeredapositionintheTemporaryMarket,ensuringthatthecurrentcultural,

ethnicandretailbalanceisgoingtobepreserved.TheOffertoQualifying

Tradersalsospecifiesfreerelocation,guarantees“reasonableendeavours”to

ensureanequalsizeofunit(withaminimumof90%),a threemonthrent-free

periodandfixed LicenceFees.Thisconstitutesacomprehensivepackageof

inducementsalldesignedtoenhance thesuccessoftherelocation.

8.15. TheClosureNoticewillbeissuedsixmonthsbeforetheclosureoftheMarket

andTraders willhaveaminimumofthree months todecideiftheywishto

accepttheOffer,whichprotectsallparties.TheTraderwillbeabletoseethe

TemporaryMarket inanearly-finished state andtheOperatorwillhavetimeto

recruitnewtradersifnecessary.A “Releasepayment” isunusual;Tradersdo

nothavesecurityoftenureandtheOperatorcouldservenoticeandcarryout

therefurbishmentwithanemptybuilding. Instead,Graingerhasdevelopeda

planthatgiveseveryopportunityfortheMarkettosurviveandflourish.

8.16. TheTemporaryMarketcannotbecloseduntiltheNewMarketAreaisreadyfor

occupation.Thisprovidesthesamelevelsofprotectionandcontinuityasthe

previousrelocation.Theprocess forTradersmoving fromtheTemporary

MarkettotheNewMarketArealargelymirrorsthemove totheTemporary

Market.ThisprovidesthesamelevelofcomfortforthefinalrelocationandIam

confidentthatalloftheseincentivesalongwithadiscountedandknownrent

givetheNewMarketareatheoptimumchanceofasuccessfullaunch.

8.17. TheproposedNewMarketArealayout(thegrosssizeofwhichcanbeincreased

toprovideatotalfloorareaof11,270sqft,providingaround6,200 sqftof

rentable space andmorethanthecurrentMarket) demonstrates adesireto

ensuretheMarket’ssurvivalwhencommercialpressuresoftendictatethe

reductionofthespaceavailable.Theredevelopment providestheopportunityto

openuptheMarket;itwillhavealarger frontagewithmoreunitsdirectlyfacing

theHighRoad.Thisisalsoachancetoimprovethekerbappeal drastically.

8.18. TheMarketFacilitator role andtherequirement toadvertisebothrelocationsis

asignificantassettotheMarketanditsfuture.TheMarket lacksacoordinated

marketingstrategyandlargelyreliesonwordofmouthandexistingcustomers.

ThereisanopportunitytoembracetheLatinAmericanculturewithinthe

Marketandwidenitsappealtothisdemographicandthewiderpublic.

8.19. TheTraderswill alsobenefitfromthebusinessplanningaspectoftheMarket

Facilitatorrole,whichwillbeespeciallyimportantwhenconsideringwhetherto

registerforVAT tomitigatetheinevitableadditionofVATtotheirrent.Iwould

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expecttheFacilitator toproduceadetailedplan,tailoredtoeachTrader,

showingtimelines andkeystagesoftherelocation alongwiththeintricate

detailsofhowtherelocationswillwork. TheFacilitatorshouldalsoworkwith

Traderswhorequireadditionalsupportindeveloping theirskillsets.

8.20. Thereisanopportunitywhenfinalisingtheinternallayoutofbothmarketsto

makeimprovements,especiallyaroundseatingforcateringunitsandthe

encouragementofthesocialaspect.InbothoftheseareastheMarketlacks any

coordinatedthoughtasthelayouthasgrownorganicallyovertime.The

requirementtoconsultwiththeTraderswillensurethatallaspectsarecovered.

8.21. Insummary,inmyexperiencethelevelsofsupportprovidedbyGraingertothe

TradersinrelocatingtotheNewMarketAreaareunprecedentedintheir

thoroughnessandcommitmenttodeliveringtheNewMarketArea.

8.22. InSection6Iconsider the2008USMReportanditsconclusions.First,itseems

tomethatthereisan errorinthecalculationofthelicencefeespayablein2008:

thefigureof£31/sqftshouldhavebeenroughly£39.41for“internal”units.

Secondly,theReportprovidesusefulbackgroundfortheMarketandshowsthat

Tradershavealreadyweatheredasignificantincreaseinrent.TheReport’s

conclusions,however,ontheMarket’sviability and rentincreasescannot be

reliedon whenconsideringthecurrentScheme.Theseconclusions arebasedon

facts,estimatesandcircumstanceswhichhavechangedenormouslyoverthe

nineyearssincetheReportwaswritten.

8.23. InSection7Iconsider theMarketTraders’StatementofCaseandbrieflyanalyse

theWardsCornerCoalitionschemeforre-providingtheMarket.TheTraders’

StatementofCaseislargelybasedonamisunderstandingaboutthelicencefees

currentlypayable.ItisalsorespondingtoproposalssupersededbytheDDV.I

amconfidentthatIhaveaddressedtheseissuesinmyProofandtheTraderscan

beconfidentthattheirinterestsareprotectedunderthes.106andDDV.

8.24. IntermsoftheWCCscheme,ontheinformationavailableitdoesnotpractically

guaranteethere-provisionoftheMarketatall,letalonewithanythinglikethe

detailof theOrderscheme.Significantly,theplansfortemporarilyinstallingthe

Market inthe“cornerbuilding’s” groundfloor donotprovideenoughspace: the

entirecorner buildingwouldnotbeenough,letalonethegroundfloor.

8.25. TheOrderSchemeisaunique opportunitytosecurethelongtermfutureofthe

Market.Changeisinevitableandthisdevelopmentprovidesafantastic

opportunitytocreateanewMarket, whileallowingforbusinesscontinuityin

theclosestpossibletemporarylocation. Theseconditionsareunlikelyto

presentthemselvesagain.The DDV obligationsarecomprehensiveandwill give

theMarketeverychancetorelocateandthriveinanew,permanenthome.