AUGB RADA MEETS WITH MANCHESTER COMMUNITY TO DISCUSS NEW HALL PROJECT

21.10.08


The President and Members of the AUGB General Council (Rada SUB) held a meeting with the Manchester community on Sunday Oct 19th to discuss issues relating to the construction of a new community hall.

This issue has been ongoing since a devastating fire destroyed the old community hall in February 2005.

1) Construction and Planning

Dr Andriy Chymera, Chairman of the AUGB’s Finance Control Committee, by way of a presentation, set out the background and details of the developed proposals for the community re-build.  In November 2007 Condale Construction (a company selected by the AUGB Manchester Branch committee) provided a cost estimate of £1,865,900 (incl. VAT) for a project that had received planning permission.  Following requests for cost reductions, in February 2008 Condale Construction revised its proposals and reduced the cost estimate to £1,559,812.50 (incl. VAT). 

The cost reductions were achieved by omitting: 
• Disability lift,
• Ceilings and fit out works to Mezzanine floor
• Floor finishes and decoration throughout
• Connections between new and old building tarmac on car park
• Provision of fire exit footpaths only

In March 2008, during a meeting of the AUGB General Council (Rada) and AUGB Manchester Branch committee, the latest February 2008 proposals were discussed.  Rada concluded that the revised proposals did not provide a cost effective fully functioning community space and that the contractor lead documentation was not fit for purpose.  On the basis of professional advice MNB Partnership, an independent Building Consultancy was appointed to:

• Work together and in collaboration with AUGB Manchester Branch representatives to facilitate a redesign of the proposals,
• Retender the scheme to achieve a total cost (incl. VAT & Fees) of less than £1,600,000.
• Prepare all necessary client led contract documentation.

The proposals of MNB, based on plans solely prepared and submitted by the Manchester Branch committee, were redesigned to form a single storey hall with 70 car parking spaces and landscaping works.  Changes to the original plans were limited to:

Omissions:
• Basement & Mezzanine level
• Disabled lift
• Fire Escape in NE corner
• Class room

Others:
• New chair store provided
• New smaller plant room

On the basis of the designs and tender documentation, six building contractors were invited to tender.  MNB Partnership are still in negotiations with two of them.  The lowest initial tender price was £1,571,124 (incl. VAT). 

The current position is that the tendered proposals may require new planning consent which is likely to cost approx. £4,500 and have a further time delay of at least 13 weeks depending on whether the plans have any objections.  However this can be avoided if the Hall has a structural provision for a mezzanine floor (at a cost of approx. £20,000 incl. VAT) and basement (at a cost of approx. £35,000 incl. VAT).  A fresh meeting with the planners has been arranged.

It was made clear the external facade of the building as required by the planning authorities will look exactly the same irrespective of whether the structural provision for a mezzanine and basement are included or not.  However, the existence of a  structural provision for the mezzanine and basement will not make them useable spaces.  Additional costs would be required to fully fit them out.

2) Insurance claim

AUGB Manchester Branch Chair, Mike Mandzij, reported on the present position of the insurance claim.  During the last several weeks the AUGB solicitor has served on behalf of AUGB a “Claimants Summary for negotiation” on the Broker’s solicitor.  Mr Mandzij said that the estimated insurance rebuild value for the old hall was approx. £2,120,000.   Two claims figures have been put forward.  The AUGB solicitor is now working to agree the name of a mediator and date of a meeting (late October, early November) with the Broker’s solicitor. Either way Mr Mandzij was very optimistic the AUGB’s claim will be successful. Should mediation prove unsuccessful, ‘After the Event’ insurance has been secured which allows AUGB the option of taking the claim to court on a no win no fee basis. 

3) Financial position

AUGB President, Zenko Lastowiecki, reaffirmed that the duty of the General Council is to secure the best interests of the entire Association and its members.  He said that it was unfortunate that the claim for the full payout of insurance had lasted for almost four years. The financial position as matters stand today is that the Association does not have the required £1.6M to fund the hall-build.  There is approx. £1M in the “Fire Account” – money received from Norwich Union shortly after the fire and held by the Manchester Branch in a separate treasury account. 

Mr Lastowiecki pointed out that in April 2007, subject to the sale of the former AUGB community centre in Cheltenham, the Council had agreed to act as guarantor to fund the project shortfall for the rebuild of the hall, which at that time stood at £560,000.  This decision was taken on the back of information provided by representatives of AUGB Manchester Branch which included information regarding the insurance claim against the Broker and also an application to the National Lottery Fund for £500,000 that appeared to have a 90% certainty of success. In the event that the £560,000 of AUGB money needed to be used, the same amount would be repayable to the AUGB Homes Fund as soon as money became available from other sources – be it from the Lottery Fund, insurance claim, donations, etc.

It was further requested that the Manchester Branch was to commence fundraising activities within its own community, regionally and nationally.

The President of the AUGB continued that in April 2007, the AUGB had accepted an offer for the property in Cheltenham for over £1 M.  However, as everyone is aware, property prices have substantially declined this year and the credit crunch put paid to the AUGB finding potential purchasers competing for the property.  Today the AUGB has a considerably lower offer on the table and it is by no means certain that a successful sale will be concluded.  Any further decision on the amount of financial assistance will only be possible if or when the property is sold.
This leaves two options for securing the funding needed for work on the hall to commence. 

(1) To resolve the insurance claim as soon as possible and/or
(2) To raise the required £500K shortfall locally and/or nationally.

The position of the General Council has not changed.  It continues to support the building of the hall in Manchester but cannot allocate funds that are not available. It is therefore imperative that the insurance claim is resolved in the nearest future.

Questions were put to both the Chair of AUGB Manchester Branch and to the General Council.  Topics covered included issues such as:  the amount currently held on the Fire Account (£997K), the proposed new-build details, building time from start to finish (which would be approximately 40 weeks), Condale Construction’s invoice for works carried out in January (£89K), the possibility of re-tendering in November, budgeted costs for running of the hall, feasibility of taking out a mortgage for the shortfall, the possibility of building a new hall for approx. £1 M (a scenario previously rejected by the local Branch committee) which would in any case require a new planning applicacation, fundraising locally and nationally including revisiting lottery funding, difficulties of building in stages, consideration to the longer term plan to see what the North-West community needs for next 10-15 years – how many people will use/visit the community and the need to work together for the benefit of the whole community...   

One theme was repeated several times in response to different questions, namely, that the project prepared by MNB, which went out to tender, was prepared in collaboration with AUGB Manchester Branch.  For the avoidance of all doubts and misunderstandings about the meeting held on 29 March and the discussions held and decisions taken, Rada proposed that the Manchester Branch Committee supply the names and addresses of all AUGB members in Manchester to Head Office so that a full transcript of that meeting may be sent to every member.

In conclusion, Z. Lastowiecki repeated Rada's point of principle that irrespective of how desperate the position had become in Manchester, work cannot be started until necessary funding is in place.  Mr Lastowiecki agreed to a proposal tabled by a member of the local community, Mr Gawlyk,  to wait and keep hold of existing plans until the outcome of the meeting with the Broker’s solicitor (late October, early November) have been concluded.  A decision regarding financing from the proceeds of the sale of Cheltenham will only be made once the property has been sold.  However it is already clear that this figure will be far lower than £560,000 and that there will undoubtedly be a shortfall. 

The meeting was constructive in that it allowed the community to air its concerns at the delay in replacing the old community hall.  The presentations made coupled with the q&a’s + comments have hopefully helped to ensure that the hall build in Manchester does not lose any impetus and that the Branch re-focuses on its own needs, potential resources and avenues of funding to ensure that a new community hall is erected as soon as is practically possible.



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