There will be no “fire sale” when Bath and North East Somerset Council reviews its £500million estate, the deputy leader has promised.
Councillor Richard Samuel said the 1,200 properties are a “jewel in the authority’s crown” but “the time has come to consider a change of direction”.
The review was already underway but has been accelerated by the Covid-19 pandemic, which knocked £6.6million off the council’s rental income and led to 1,200 of its employees working from home, freeing up space for other tenants or uses.
It plans to maintain ownership of its £295million commercial estate but it will be “rebalanced”, and empty shops could be turned into homes.
Cllr Samuel told the cabinet meeting on December 10: “The council’s property holdings have been faithful servants for many years.
“The holdings have produced income to the council that has used to support its wide of range of services and the improvement of our area. It is a jewel in the council’s crown that must be looked after and nurtured.
“But the time has come to consider a change of direction.”
He said the council has to “wean itself off” its reliance on property income, and the estate needs to balance the interests of income maximisation, the tenants and the community.
“For the avoidance of doubt, we aren’t doing a fire sale, we aren’t outsourcing this property portfolio, we aren’t selling the family silver,” added Cllr Samuel, the cabinet member for resources.
“What we want to do is make the whole complex estate work better for the council and for the community. We aren’t flogging things off.”
He said there will be renewed focus on tackling the climate emergency and he wants the council to set an example for other landlords.
Chief operating officer Mandy Bishop said pre-Covid its commercial lettings had held up well despite the challenges faced by town and city centres, but the pandemic had had a significant impact on its income.
The council has lost £6.6million in commercial income and the proportion of empty properties it owns has more than doubled to 7.6 per cent. Many tenants are in arrears.
Tourism and parking, two other key income streams for the authority, have also been badly affected since March.
Property consultants Montagu Evans have been tasked with reviewing the commercial estate and testing whether it should “move to a more residential based portfolio”.
The £200million operational estate is also being re-evaluated.
With many staff working from home since March, the authority has reduced some of its leasehold costs and is letting some of its office accommodation in Bath to other public sector organisations.
Ms Bishop said: “Keynsham will become our primary office base for our staff, who will work in a more flexible way. Our teams will work in a blended way, with a mix of office use, home use and working from other localities. We’re working with other public sector organisations to look at the joint use of buildings.”
Decisions relating to the estate will be delegated to Cllr Samuel and top officers.
Stephen Sumner, Local Democracy Reporter