Fermain cafe questions answered

Saturday 27 April 2024

As a petition is launched to 'Save Fermain Beach Cafe', P&R has gone on the offensive to explain why the lease is going out to tender for the first time in 21 years.

Numerous people have contacted the Policy and Resources Committee, other deputies, and the States Property team to share their concerns on any possible changes.

P&R says what's already been disclosed is "part of the ordinary commercial operations of the States of Guernsey" and is "in keeping with its approach to other coastal cafés and kiosks".

The Committee said it also "fully appreciates the strong feelings many customers of the Café have shared".

“A number of concerned members of the community have been contacting my team, the Policy & Resources Committee and their Deputies, with questions about the decision to invite applicants for the lease of the Fermain Café. So, we are more than happy to share as much detail as we can," said Mark Ogier, Director of Estates, States Property Unit.

Pictured: In less than a day the petition to 'Save the Fermain Beach Cafe' had more than 100 signatures.

"We have sought to treat the tenant fairly throughout our relationship, as we would any of our tenants. We are also obliged to ensure we are doing the best thing possible on behalf of the community with the important sites we look after, and that means that at appropriate times we need to go out to the market and see what other prospective applicants would put forward. This should not be seen as a criticism of any current tenant, it is just good commercial practice.

"In a competitive market where commercial decisions need to be made, a lease-holder whose lease is coming to an end after a very long period, is often asked to retender to renew or extend that lease. Their submission is treated impartially and considered on its merits against any other proposals put forward. If the strongest submission received comes from the current tenant, the States will be more than happy to agree a renewal of the lease.”

Deputy Bob Murray is the Property Lead for the Policy & Resources Committee.

“The decision to invite the market to bring forward expressions of interest for this site is an operational one, but it is also one that I support," he said.

Pictured: Deputy Bob Murray.

"It is a perfectly normal practice in any commercial environment, to re-tender a lease from time to time, and in this case it hasn’t happened for 21 years. The States are often criticized for not acting in a more business-like way, but that is exactly the approach that has been taken here. Having to compete to hold on to a lease is not a punishment, and I don’t believe it is unfair either. In fact, fairness is one of the main reasons for ensuring there is a competitive process. We have been transparent with the tenant and we are sharing this information today to be as transparent as possible with the community too.”

Background 

The Fermain Café has been leased to its current tenant since 2003. The current lease is due to end on 31 October this year. P&R says the lease does not contain any clause determining a right to renew, but a renewal – or a new lease or an extension – can be granted subject to agreement by both parties.

P&R says when the current 21-year lease was relatively new, the tenant and States made agreements to "carry out improvements to the site in exchange for a concessionary rent period".

P&R also says that since 2009, the tenant has approached the States with various proposals to further invest in the Café, including extending and altering the premises, in exchange for extensions to the 21-year lease. These options have not been pursued by the tenant, but P&R says "the States has been very open to exploring these proposals".

In 2009, a lease extension was agreed until 2038 on the condition the tenant’s proposed alterations to improve the premises were carried out by May 2015. However, that did not happen. The States then invited the tenant to submit a new request for a new completion date in order to keep the extension of the lease in place, however no such request was received.

Most recently in March 2023, the tenant approached the States to discuss buying the site, or extending the lease.

P&R said it would not sell the site, and while the States is not opposed to renewing the lease it is "mindful that the tenant’s previous proposals to carry out improvements to the site have never been progressed, and the States regularly receives interest about the running of and investment in publicly-owned kiosks and cafés".

A decision was then made that the "fairest approach" would be to invite all interested parties including the current tenant to put forward expressions of interest for the new lease.

The States made the tenant aware of this a year before opening the tender process.