viability not liability

Viability not Liability Workshop

Asset Transfer : Everything You Needed to Know

Peter Williams - Director, DTA Wales

Memo Arts Hall, Barry

10th June 2015

Development Trusts Association Wales

• The Development Trusts Association supports its development trust members as part of a community regeneration & enterprise network of 40 Trusts in Wales and more than 900 across the UK

• Our members hold community owned assets worth £500 million across the UK

• Income generated from assets is £25 million p.a.

• We are part of the Social & Community Enterprise and Community Regeneration Networks in Wales, helping to grow the Social Economy and build sustainable communities across Wales

Copyright DTA Wales 2015 2

Development Trusts

• Community owned and led Community accountable and based

organisations Independent

• Cultivating Enterprise Operating as social and community

enterprises Trading in good or services Not for private profit

• Securing Community Prosperity Creating wealth in communities and

keeping it there

• Building Assets Acquiring community owned land or

buildings to create income & ownership Engaged in long-term economic, social,

environmental & cultural regeneration

• Diverse Operate in villages, market & coastal

towns, rural areas, former mining communities, housing estates & urban areas

Committed to guiding values, new ways of working, actively involved in partnerships


Asset Based Development & Development Trusts

• Development Trusts have been at the forefront and have pioneered community based Asset Development in the UK for more than 40 years

• The DTA network across the UK and

in Wales includes a number of trusts that have demonstrated the case and value of Asset Based Development

• Briefing on Asset Development

published by DTAW & WLGA in 2005

• Taking Quirk Forward in Wales –

Research for Welsh Assembly in 2009

• Community ‘Right to Buy’ campaign

• DTA Wales Guide to Asset Development ‘To Have and to Hold”

• DTA Wales Assets Web Portal: http://assetsportal.dtawales.org.uk

• DTA – England managed the Asset Transfer Unit for 5 years

• DTA – Scotland managed the Supporting Community Assets programme


http://assetsportal.dtawales.org.uk/

Context for Asset Development in Wales

• Track record of asset development in Wales

• Many have been hard won success in spite of obstacles

• Other assets have been developed with support of partners- local authorities other public bodies

• Many assets have been acquired by community organisations at market value with use of grant or loan funding

• Community Asset Development cuts across a number of Welsh Government priorities – Finance, Local Government and Regeneration, Communities, Economic Development, Sustainable Development

• Lead by Welsh Government Property Division and National Assets Working Group on Community Asset Transfer in Wales – Best Practice Guide, 2015

• Consultation on Assets of Community Value Measures – current by Communities Minister

• CAT 1 Programme – Big Lottery and Welsh Government 2009

• CAT 2 Programme – Launched by Big Lottery 2015


What is Asset Based Development?

• Community ownership of buildings & land leads to community transformation

• Possession of tangible assets is a key to achieving viability, independence sustainability which underpins community based enterprises & regeneration organisations

• Focus on acquisition or transfer of land and buildings by Development Trusts, Co-operatives & other Community Enterprises

• Can also include equipment, other natural assets (woodland, renewable energy, materials for recycling)

• Financial assets – capital funds, endowments or investments on balance sheets


History of Asset Development

• NOT NEW!

• Early history relating to land reform and land rights (e.g.. Scotland) and Steve Wyler – A history of community asset ownership, 2009)

• Community Enterprise and Co-operatives History

• Community-led economic development and regeneration

• Asset based community development (ABCD models)

• Community empowerment and ownership and re-investment locally

• Quirk Review 2007


Asset Transfer

• Local authorities and other public bodies can play a key role in transferring assets to community organisations and enterprises

• Welsh Assembly General Disposal Consent 2003 for ‘Disposal of Land in Wales by Authorities for Less than Best Consideration’

• Land or buildings can be transferred at less than market value where there is benefit to ‘economic, social or environmental well-being’ of an area

• Welsh Assembly Government and Big Lottery £13 million Community Asset Transfer Fund, 2009

• Added value of assets to communities is greater than ‘financial’ value

• Need to promote & encourage asset transfer - DTA Wales training


Asset Transfer – Key Features

• Often used loosely to describe a whole spectrum of options of community ownership or management from licenses, leases or freehold transfer.

• Mostly used in context of transfer of public assets to community organisations (but can include private sector transfers)

• Link to public sector is due to legal accountabilities and possibilities for transfer, at ‘less than best consideration’.


Making Assets Work Creating New Social & Community Enterprises

Assets are the base for a wide range of community enterprise & services provided by Development Trusts, Co-operatives & other Community Enterprises.

Examples in Wales include

Managed workshops or office space Shops & retail developments

Restaurants & cafes

Community resource centres

Arts & cultural enterprise centres

Heritage & craft workshops

Housing – including green homes

Sports & leisure facilities

Recycling & environmental improvements

Play & childcare facilities

Renewable energy businesses

Healthy living centres


Benefits

• Community ‘ownership’

demonstration of shift in ownership & local control

Communities ‘doing it for themselves’.

• For communities sense of stability & positive vision

• Income Generation Can be used to generate independent

income & investment

• Local economy long term benefit, retaining wealth locally growing assets as foundation for renewal

& enterprise & creating local jobs

• Builds independence and skills, credibility & viability

• Creates a base & focus for new community enterprises & services

employment, training, arts, resources, etc.

• Enables access to wider finance income generation & loans

• Demonstrates sustainable development & resilience

regenerates derelict or underused land or buildings

productive use of resources brings together social, environmental and

economic solutions, community reinvestment


Challenges

• Community asset development isn’t for everyone.

• Community assets need to be ‘viable’, not liabilities and ‘fit for purpose’ – many are not!

• Culture Change - Staff & Boards need good range of skills, knowledge & governance, to buy, develop & manage assets.

• Can be complex and involve risk - finance, legal, design, planning.

• Need for good professional advice & support.

• Long term approach & vision required – to build assets & enterprising communities


Community Assets Case Studies


GALERI CAERNARFON

Est. 1992 as market town development trust. Started with one property & £350K grant. Owns & has refurbished 28 derelict properties in town centre & 11 further properties in slate mining valleys. Community arts project led to development of award winning £7.5 million creative enterprise centre Galeri Caernarfon with concert hall, cinema, workshops & offices for rent & café.


29 STRYD FAWR

BEFORE AFTER


4 PALACE STREET

BEFORE AFTER Copyright DTA Wales 2015 17

LIPTONS, DEINIOLEN

NOVEMBER 2000 OCTOBER 2001 Copyright DTA Wales 2015 18

• Promo Cymru co-operative enterprise long track record in Cardiff and South Wales working

with young people and cultural industries, media, music.

• Manage CLIC programme across Wales and Youth access TV

• Approached DTA Wales about acquiring Asset Base to build on work in valleys

• Acquired Ebbw Vale Institute on short term license as a stepping stone to Asset

• Transfer and winning Big Lottery CAT 1 Programme support

Ebbw Vale Institute


Menter Mon

• Originally set up in 1996 to administer the Leader II Programme. • Wales winner of the UK Enterprising Britain Awards • Developed wide range of regeneration and enterprise projects including Llys

Llewelyn as holiday accommodation, tourism information, shop, gallery and laundry.

• Recently acquired a number of Assets through transfer including Grade II listed Llangefni Town Hall approved for funding under Big Lottery Wales CAT 1 Programme in 2010


Menter Mon acquired a number of buildings through Asset Transfer including Grade II Listed Llangefni Town Hall, Princes Pier, Llys Llewelyn.


SBECTRWM, Vision 21

Long established community enterprise organisation working with people with disabilities in Cardiff

and the Vale. Owns a number of assets, including an industrial unit for carpentry, IT workshops,

horticultural centre, managed workspace & long term lease on former school site refurbished as

Sbectrwm Community Resource Centre with office, meeting, pottery & garden facilities.


Copyright DTA Wales 2015 24 Photo: Tim Martin

Glyn Wylfa, Chirk Pontcysyllte Aquaduct and World Heritage Site


Viability or Liability?


Definitions

• Asset Development

• Asset Transfer

• Viability

• Sustainability


Asset Development

Asset Development is a term used to describe the physical transformation of a land or building asset and the transformation of a new or existing community organisation or enterprise, to owning and managing assets.


Asset Transfer

Asset Transfer is a term used to describe the process of the transfer of the ownership (or sometimes leasehold) of property or land, from one party to another.


Before you Start

• Do you want to develop a new enterprise or business model, or deliver services or activities?

• How will you ‘sweat your asset?’

• What you do on the back of the asset, is equally or more important, than acquiring and developing the asset

DTA TOP TIP

Be clear about what you want the asset for!


Is it the ‘Service’ or ‘Asset’ that is being Transferred?

• Is it a freehold or leasehold transfer option?

• Have you considered other asset options and locations

• Avoid mistakes from the outset by research, planning, professional advice & discussion with stakeholders

DTA TOP TIP

Separate the service and the asset and realistically assess whether either or both are ‘viable’ and ‘sustainable’


Is the Asset ‘Fit for Purpose’

• Will it more than ‘wash it’s face’ and generate income and a surplus or be a liability?

• What are the costs to bring it up to standard to operate?

• Cost of new build versus refurbishment

• A good idea but have you considered other asset alternatives?

• Location, accessibility, parking

• Planning or other constraints e.g. full repairing lease, heritage, legal

DTA TOP TIP

Be realistic, will it accommodate your enterprise and activities, with room to grow?


Viability and Sustainability

• Viability – Will the asset have or generate the financial resources you need to acquire, develop and manage the asset and more than cover it’s cost?

• Sustainability – Does the organisation have the capacity, right people, skills and attitude to operate, manage and maintain the asset and enterprises into the foreseeable future?

DTA TOP TIP

Test every aspect of the CAT process and development through these two perspectives


Starting Points

• Clear project objectives

• Right organisational culture and attitudes

• Outcome focused – realistic and enterprising

• Leadership

• Professional advice at all times

• Viability and Sustainability Checks

DTA TOP TIP

Know the overarching issues and skills required, that run through the asset transfer and development process


Overview of the Asset Development Process

• Inception – the idea

• Feasibility – wanted, desirable, achievable

• Detailed design and planning – fixing plans and cost (viability and sustainability)

• Implementation – managing the process and professionals

• Management – looking after, using and “sweating” the asset

• Impact – capturing and measuring performance

DTA TOP TIP

Acquire the knowledge and skills you need to take ownership of the process and asset


Getting Good Professional Advice

• Legal advice

• Architect

• Project Managers

• Financial Advice

• Mechanical, Environmental Engineer

• Business Support

• Surveyors

• QS/Structural Engineer

• Planning Advisor

• Building Contractors

• Landscape Architects

DTA TOP TIP

Don’t underestimate the need for qualified professional advice and when to get it


Types of Assets – Peer Learning

• Wide spectrum of types and uses of community owned land and buildings

• Learn from others about practical experience of what works and doesn’t work

• Benchmark and test your idea against similar assets and enterprises

DTA TOP TIP

Learn from and visit, at an early stage, other community enterprises, who have developed similar types of assets


Build Stakeholder Involvement & Support

• Detailed guidance in “To have and to hold” DTA Assets Guide

• Stakeholders can create value, commitment and support and help reduce risk

• Can create opportunities for innovation

• Improve sustainability for the asset and the organisation

DTA TOP TIP

Plan a process and create opportunities for involvement of stakeholders at different stages of transfer and development


Feasibility

• Consider as best you can all the “make or break” questions in DTA ‘To have and to hold’ Guide

• Is the proposal desirable, can it be accomplished, is it viable?

• Identify and forecast all likely costs and income

• Can Capital costs be secured?

• Can the Asset be secured on right terms?

• Is there a market and community support

DTA TOP TIP

Take time to undertake an initial and detailed feasibility study before you rush into a business plan


Forecasting Costs

• Land & Buildings can be liabilities because they cost a lot to run and maintain and have legal & other responsibilities

• Planning will help inform your business model and plan and design and construction

• Need to recover the costs and make a surplus

• See DTA To have and to hold Guide – managing physical maintenance, managing use and organisational management checklists

DTA TOP TIP

Don’t underestimate the management and maintenance costs


Risk Analysis – Example


Investment Readiness

• Credibility – of business model and clarity

• Competence – of organisation, governance, financial management etc.

• Capacity – to deliver and to grow

• Confidence – to pitch and sell your idea

DTA TOP TIP

Remember the 4-C’s: that funders and investors look for


Building Financial Stability

• Full Cost Recovery

• Understanding your Business

• Understanding the market and benchmarking against the best

• Being real about risk

• Knowing the numbers

• Your USP – Social Return on investment

• Diverse, high quality revenue streams

• Ownership of the Strategy – your Board, Trustees, Stakeholders & staff

• Relationship Management with funders & investors


Next Steps

• Raising the Finance

• Detailed business and financial planning

• Securing further professional advice

• Design, construction and development


Taking Forward Community Asset Development & Transfer in Wales

• Learn Lessons from Advancing Assets Programme & Asset Transfer Unit in England and Community Assets Support Programme in Scotland

• Specific Training for Third & Public Sectors –identifying viable assets, managing assets, asset transfer (DTA Wales Seminars and Support)

• Development of Specific Community Asset Transfer Policies by Public Bodies.

• Opportunities for more Strategic Transfer of Assets to Third Sector

• Consultation on Assets of Community Value Measures by WG

• Guidance & Risk Management- in Asset Transfer

• Investment required (CAT Fund, CFAP Fund, Loan Funds, Community Shares)

• Capturing Good Practice & Added Value of Asset Transfer and Development (See ARAD Economic Impact Study of Galeri Caernarfon)


Further Information

Websites

www.dtawales.org.uk http://assetsportal.dtawales.org.uk

www.renewwales.org.uk www.communityenergywales.org.uk

DTA Publications:

To Have and To Hold – DTA Guide to Asset Development by Lorraine Hart (2005 & 2010)

Asset Transfer Route Map - ATU 2010

Assets for Enterprising Communities in Wales– Briefing WLGA/DTA Wales 2005

Green Asset Guide – improving the environmental performance of assets (DTA 2007)

Other

Welsh Government Community Asset Transfers in Wales Best Practice 2015

Quirk Review- Making assets work (May 2007)

Opening the Transfer Window (CLG 2007)

CLG – Managing Risks In Asset Transfer A Guide

Community Land Trusts – capturing value for communities

Communities Taking Control – report on community ownership of assets OPDM/Home Office


http://www.dtawales.org.uk/


http://www.renewwales.org.uk/

http://www.communityenergywales.org.uk/

Support and Advice for Assets

Organisation Website

DTA Wales www.dtawales.org.uk

Association of Independent Museums www.aim-museums.co.uk

Big Lottery Fund https://www.biglotteryfund.org.uk

Building Preservations Trust http://www.ukapt.org.uk/

Business Wales www.business.wales.gov.uk/socialbusinesswales

Community Energy Wales www.communityenergywales.org.uk/

Community Land Advisory Service Wales http://wl.communitylandadvice.org.uk/

Community Land Trusts www.communitylandtrusts.org.uk

County Voluntary Councils www.wcva.org.uk

Locality www.locality.org.uk

Planning Aid Wales www.planningaidwales.org.uk

RICS Wales www.rics.org.uk

RTPi www.rpti.org.uk

The Prince’s Regeneration Trust http://brick-work.org

Wales Community Woodlands Association www.llaisygoedwig.org.uk

Wales Cooperative Centre www.walescooperative.org.uk

Wales Council for Voluntary Action www.wcva.org.uk/CAT2



http://www.aim-museums.co.uk/



https://www.biglotteryfund.org.uk/

http://www.ukapt.org.uk/

http://www.business.wales.gov.uk/socialbusinesswales


http://wl.communitylandadvice.org.uk/

http://www.communitylandtrusts.org.uk/

http://www.wcva.org.uk/

http://www.locality.org.uk/

http://www.planningaidwales.org.uk/

http://www.rics.org.uk/

http://www.rpti.org.uk/

http://brick-work.org/



http://www.llaisygoedwig.org.uk/

http://www.walescooperative.org.uk/

http://www.wcva.org.uk/CAT2

Membership - Join us!

• Emerging development trusts or existing community regeneration organisations or enterprises wishing to become development trusts can become Full Members of DTA Wales

• Housing organisations, local authorities & other partners can become Associate Members

• Benefits include: newsletter & publications, UK wide and Wales based conferences, training & seminars, access to best practice network, peer advice and support, members’ discounts, links to Energy Action Group and advice from Renew Wales and Community Energy Wales


Contact

[email protected]

www.dtawales.org.uk

http://assetsportal.dtawales.org.uk

Tel: 02920 190 260

@DTAWales

DTA Wales

www.renewwales.org.uk www.communityenergywales.org.uk

Suite 1b, Second Floor,

Stangate House, Stanwell Road,

Penarth,

Vale of Glamorgan,

CF64 2AA

Tel: 02920190260


mailto:[email protected]



http://www.renewwales.org.uk/


https://twitter.com/renewwales

https://www.facebook.com/pages/Renew-Wales/110522639107064

viability not liability

Government & Nonprofit

wales copyright dta

community asset transfer

community organisations

community accountable

economic development

development briefing

wales research

social community enterprise