An investigation by the Stray Ferret has revealed that Harrogate’s Royal Baths have massively under-performed as a commercial investment since they were bought by North Yorkshire County Council in 2018.

The council bought the Grade II listed building for £9 million in 2018 as part of a wider strategy to become more entrepreneurial to plug its declining budget from central government.

But the Baths have only generated about a third of the income expected, raising questions about the wisdom of the decision to buy it, as well as whether the council has the necessary business acumen to invest taxpayers’ money in such schemes.

The council was accused of making a “trophy investment” last month when one councillor said he was “absolutely’ speechless” by the £9 million sum paid for the Baths.

It has now emerged that rental income is way down on what was predicted in a confidential report to councillors before they agreed to buy it.

Prepared to pay £10m

The report, which has now been made public, reveals the council was prepared to pay up to £10 million for the Baths, which included four commercial units.

At the time, they were J D Wetherspoon, The Potting Shed bar, the Viper Rooms nightclub and Royal Baths Chinese Restaurant. The Potting Shed subsequently closed.

The report forecast the Baths would generate annual income of £500,940.

But gross income received in the three years since then was just £613,000 — way down on the £1.5 million expected. The council has also incurred maintenance and other costs of £222,000 on the Baths to the end of March 2021, further reducing the income figure to £391,000.

Read more:

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Philip Broadbank

Councillor Philip Broadbank, a Liberal Democrat who represents Harrogate Starbeck on the county council, said

“The price for the Royal Baths investment seems to be high and the rate of return has been very disappointing and needs to improve.

“The Royal Baths complex is in a central position in Harrogate town centre but margins need to improve quickly for council taxpayers to see some financial benefits. It is vital that all the units are let and fully operational and officers need to ensure that happens soon to help the local economy.

“The periods of closure have been significant and challenging and the poor rates of return need to be substantially improved if taxpayers are to have confidence that the investment policies are to work satisfactorily financially.”

‘It will end in tears’

The council has not been helped by lockdowns, which have affected all three surviving businesses. The Royal Baths Chinese Restaurant remains closed but plans to re-open this year.

Stuart Parsons

Nevertheless, Councillor Stuart Parsons, who represents Richmond and is the Independents group leader at the county council, said the financial performance of the Baths was worrying and predicted the council’s attempts to generate income in new ways would “end in tears”. He said:

“There’s always that belief in local government that they have expertise and can deliver anything but they are experts at delivering services rather than property projects.”

He said the council had been “absolutely strapped for cash by central government for 11 years” and was being encouraged by ministers to find new sources of income to “shore up shortfalls”. But he added:

“We have seen a number of councils fail because they have taken on projects like renewable energy and are unable to deliver them.

“They will try their hardest in North Yorkshire but they don’t have the necessary expertise to drive things forward. This will be one of the black marks against the Conservative government. It will end in tears.

“Councils should not be trading. They should be providing services, not building houses or power plants. If they had kept the £9m it could have been used to help people in desperate need in social care.”

Cllr Parsons added it was concerning that major spending decisions involving taxpayers’ money were being made on the basis of such inaccurate forecasts.

“If they are basing their finances on estimates that are unsound then something seriously needs to change.”

North Yorkshire County Council offices in Northallerton.

Councillor Gareth Dadd, deputy leader of the Conservatives on the county council, has been one of the key supporters of the Baths investment.

The Stray Ferret sent him some questions but he did not reply.

‘Better than treasury returns’

A council spokesman said it received legal advice and a surveyor’s report and undertook comparative market analysis to support the business case and necessary due diligence before buying the lease on the Baths from M&G Property Portfolio.

He added the investment “continues to stand up against the alternative investment opportunities where cash returns amounted to an average return of 0.19% p.a. at Quarter 2 21/22”.

Gross income received to the end of 20/21 was £613,000 and standard treasury returns would have generated £152,000, the spokesman added, and therefore the investment “has realised £461,000 of additional benefit to the council and its taxpayer when compared to our standard treasury returns”.

He added covid and lockdowns had had a significant impact since the Baths were bought in 2018.

“Our tenants, in the hospitality sector, have been significantly impacted by the pandemic with extended periods of enforced closure during 2020 and 2021. We are working with them to reach reasonable terms on recovery of arrears where possible.

“National regulations in force until late March 2022 prevent us from evicting tenants that have fallen into arrears as a result of covid.

“All retail and hospitality suffered significant periods of closure and financial challenge throughout the pandemic. The Harrogate Royal Baths is a local asset and we remain confident that Harrogate and the Royal Baths itself will recover from the pandemic and continue to contribute to the Harrogate and North Yorkshire local economy.

Besides the four commercial units, the purchase of the Baths also included two further units held on long-leases by Harrogate Borough Council at a peppercorn rent occupied by the tourist information centre and the Turkish Baths, as well as two car parks similarly let on long leases at nominal rents.

The council set up the Brierley Group of firms, ranging from house builders to lawyers, in 2017 to bring together council-owned companies and find new ways of making money. However, last year it reported a loss of £639,000.

Further losses are forecast for the current financial year.

The council warned last month it faces “enormous financial pressures” and needed to find £19 million in savings.

Keeping in mind the importance of a vision for Harrogate’s future, the Stray Ferret asked Malcolm Neesam to come up with suggestions for making Harrogate more attractive to visitors and residents alike, regardless of cost or planning requirements. This is the third of three articles. Malcolm fully understands that his “visions” may not appeal to everyone, and he submits them as purely private dreams.

Vision 7: Royal Baths

With my unlimited budget and full planning control, my next vision involves the Royal Baths, and let me explain immediately that contrary to what some might guess, my vision does not consist of restoring the building as a working Spa, as I am not convinced the market for such an amenity exists in Harrogate today outside small, private luxury hotels.

The Royal Baths should remain at the heart of Harrogate’s leisure and entertainment area.

Instead, I see the Royal Baths building as being at the heart of Harrogate’s leisure and entertainment area, and consequently, I would leave the bars and restaurants in the 1897 building intact. As for the former Lounge Hall, I would restore this as Harrogate’s ‘town’s hall’, or an assembly space for use by local groups, Mayor makings, school prize days, fashion shows, or simply as a place of assembly with refreshments still being available, but on a far reduced scale to the present situation.

It was, in my opinion, very wrong of Harrogate Borough Council to have disposed of the lease of this complex for such a long period when the place was built using public money for the whole community. But let that pass, as the centre-piece of my vision for the Royal Baths is outside the former Lounge Hall.

When the council allowed the block of flats known as “Royal Baths 2” to be built, it ensured it had an underground car park, yet for the adjoining site between the former Fountain Court and the road at Montpellier Gardens, it approved its conversion into a surface car park! This was a gross waste of one of the most valuable building sites in Harrogate. And to add to the bad decision, it allowed the lovely Fountain Court to be torn down in an act that provided for a mere nine cars. I would construct an underground car park here, and restore the Fountain Court, but giving it a glazed roof, so that it could be used throughout the year.

Fountain Court 2001: Walker-Neesam Archive

But my most ambitious work would be between the restored Fountain Court and Montpellier Gardens, where on the site of the long demolished New Montpellier Pump Room I would build a four-storeyed replica of an old Harrogate coaching inn, complete with galleried courtyard, which would be filled with whatever catering, accommodation and entertainment facilities the market was judged to require. It would need to be attractive and picturesque, to draw as many visitors as possible, and would be a major enhancement for the Montpellier and Royal Parade Quarters.

Vision 8: Prospect Square

The large urban space bounded by Cambridge and Prospect Crescents, St. Peter’s Church, the Yorkshire Hotel, and – across the busy road – the old Pier Head, certainly has as good a claim as any to be regarded as the heart of Harrogate.

Pier head lavatories and terrace: Pic: Walker-Neesam Archive

As its last makeover came from the experimental pedestrian zones of the 1970s and 1980s, with little subsequent change, it makes a good candidate for the last of my series of visions for the future.

The first thing I would do, if I had unlimited funding and full planning control, would be to re-open the suites of underground lavatories at what is facetiously called Pier Head, which the council built on the Stray after the passing of the 1893 Harrogate Corporation Act. The location, opposite the junction of Prospect Place, James Street, Cambridge Street, Parliament Street and Montpellier Hill was perhaps the best site in the town for such an amenity. As this location was within 75 yards of Hopewell House (now Bettys) the 1893 Act required that it be built underground.

To comply with this requirement, the corporation removed soil from the crown of Montpellier Hill, built the lavatories, and covered them with the excavated soil, thus giving the impression of subterranean construction. Work does not seem to have begun until 1896, and progressed slowly, in that the brick structure was not ready to receive its disguising “ornamental rockery” until January 1897, when the council discussed tenders. On June 2, an advertisement appeared for male and female applicants who would be required to work from 9.00am to 9.00pm each day, including Sundays, at a wage of twenty shillings a week for the man and fifteen shillings a week for the woman.

These wonderfully constructed public lavatories remained in use for nearly a century, until the council, still reeling from the lamentable mishandling of the Conference Centre affair, took the frankly stupid decision to close them to “save money”. The power and water were disconnected, and the entrances filled in with soil. I am sure that 95% of the present council has no idea they are there. Given the wonderfully convenient location of the Pier Head lavatories, it would be sensible to restore and properly staff them, and this would be my first goal for this location.

Prospect Square

Read more:

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• Royal Baths Chinese Restaurant reveals plans to re-open

For the rest, I would close the short length of road in front of Cambridge Crescent, to link the central war memorial to the Crescent, and I would pay for a facsimile of Samson Fox’s sensational Water Gas candelabra. This was built by Fox as a demonstration piece for his water gas plant. It consisted of a “gigantic lamp of four tiers of branches, each branch have 12 double branch light, making a total of 48 brilliant lights”.

The Water Gas experiment was a great success, with Parliament Street lit to great effect, so much so that by autumn, the press reported visitors were coming from far and wide to see how the Mayor of Harrogate “had bottled the sun”. Despite the overwhelming brilliance of the Fox Water Gas candelabra, its energy consumption was enormous, so its modern use would have to be minimal. I would also floodlight the whole of Prospect Square and the War Memorial as – hopefully – an attraction for residents and visitors alike.

Keeping in mind the importance of a vision for Harrogate’s future, the Stray Ferret asked Malcolm Neesam to come up with suggestions for making Harrogate more attractive to visitors and residents alike, regardless of cost or planning requirements. This is the first of three articles. Malcolm fully understands that his “visions” may not appeal to everyone, and he submits them as purely private dreams.

Vision 1: Unlocking the potential of Crescent Gardens

Here, I am referring to the gardens themselves, rather that the building that was until recently the home of Harrogate’s administration.

Crescent Gardens consists of the detached portion of Stray outside the Hotel St. George, and the rest of the gardens to the west of the slip road, which so awkwardly divides the council-owned gardens from the Stray. Although this rat-run is popular with motorists trying to avoid the traffic lights, it really should have been grassed over years ago, to create a single civic space at the heart of the spa area.

The centrepiece of my vision for Crescent Gardens is to complete the architectural frame-work of the unfinished building ensemble, which has the Grosvenor Buildings and the Royal Baths to the south, the Royal Hall and Exhibition Hall “M” to the east, the Hotel St. George and the former council offices to the north, and on the western edge – a small block of public lavatories and the disused Shelter of 1910.

Despite several attempts in the Victorian and post-Great War eras to build something handsome and useful on the gardens’ western edge, nothing was ever achieved. The site has tremendous potential, and the loss of a small strip of the gardens for a new building could easily be compensated by grassing over that awkward slip road and adding it to the main gardens.

Crescent Gardens

Although this land is owned by the council, it lacks the vision and business sense to grasp the development potential. I would commission an eminent, classically-based architect, to design a three or four-storey building on the western edge of Crescent Gardens to contain either offices or apartments in the upper floors and very high quality shops and restaurants on the ground floor.

Built of solid stone, and with elevations to harmonise with the other buildings around the gardens, the development would breathe new life into the heart of the spa area, and complete the architectural framework of this most important locality. The ground level would be fronted with a classical colonnade to protect pedestrians, and the first floor would have as its centre piece a large restaurant with a spacious terrace overlooking the gardens.

I would erect a splendid fountain at the centre of the gardens, consisting of a series of circular bowls of diminishing size to create an attractive water feature symbolic of the town whose old motto was Arx Celebris Fontibus (a citadel famous for its springs).

As for the pretty but under-used Shelter, I would move it 180 degrees on to the grassed area to the north of the Mercer Gallery for use by the gallery to display sculpture or the Park Drag.

Perhaps the new North Yorkshire Council will see the sense in doing something creative with the under-used asset that is the western edge of Crescent Gardens.

Vision 2: Replace the ‘piecemeal bungling’ of the Island site

This is the site bounded by Ripon Road, King’s Road and Springfield Avenue, excluding the land and buildings of the Hotel Majestic.

An aerial view of the Island site. Pic courtesy of Simon Kent.

The development of this key site for the economic prosperity of Harrogate was undertaken with a series of coherent master plans, until 1958, when these were junked in favour of amateurish, piece-meal bungling, which was so incompetent that the subsequent buildings had neither adequate road access nor a single floor level.

My vision for the island site is that I would demolish everything apart from the Royal Hall and the Convention Centre, and rebuild in the following manner to a master plan that ensured vehicular deliveries occurred away from the public highways and footpaths; that all ground floor areas other than that of the Royal Hall were of the same level; with an external architecture that harmonised and enhanced Harrogate’s historic monumental buildings; and, with green open space at its heart as an amenity for visitors and residents and to serve as the centre piece of a leisure and retail complex.

Malcolm would keep the Royal Hall but suggests a complete rethink for much of the land behind it. Photograph: Flickr, Tony Hisgett

Before embarking on my expenditure, I would undertake or commission fastidious research to establish the economic future on which the conference and exhibition business is based, possibly by such a reliable company as Mintel. If such research showed that these activities were likely to continue into the post-covid world, I would include the appropriate facilities in the development specification. If not, I would drop them.

Whatever the result, I would ensure that the new development was targeted at residents and general visitors, with an emphasis on leisure, entertainment, and retailing. After all, this is the heart of the town, and if I could change history, I would have shifted the whole damn development to the Great Yorkshire Showground and kept intact the old railway link that once crossed the site.

As for the new buildings, they would be built over a large underground vehicle park, above which several new structures would frame an open garden accessible to them all. Some of these new buildings would be dedicated to exhibition use, if the demand for this can be demonstrated. Others would contain such leisure amenities as bowling alleys, a trampoline facility, shops, cafes, and office space.

On the important site at the junction of Ripon and King’s Roads, I would reconstruct the most important monumental building ever erected in Harrogate, the Spa Rooms, with a stone facade including the main entrance of six Doric columns with a proper entablature, and the great Georgian internal saloon with its vaulted ceiling, musicians gallery and chandeliers. This would be used to contain a luxury restaurant, and also through its link, a break-out space for the neighbouring Royal Hall. I would also restore the little garden in front of the Royal Hall, long lost under a sea of tar, and replant the chopped down beech trees at the pavement junction of King’s and Ripon Roads.

Vision 3: Create stunning fountains on Prospect Place

Perhaps the most important entrance to the heart of the town is Prospect Place, as it is flanked by an imposing architectural backdrop and also by that wonderful symbol of Harrogate, the Stray.

Culminating at the War Memorial, from which Harrogate’s principal shopping streets radiate, it might be thought that the locality was beyond improvement, but given unlimited funding, I would add something so spectacular as to make visitors arriving at the town’s centre gasp with wonderment.

Prospect Place. Pic: Walker-Neesam Archive

Prospect Place between James Street and Victoria Avenue was at one time fronted by the individual gardens of the private or commercial properties to the east, all of which were converted into the present gardens after the Second World War, Harrogate Borough Council being responsible for their maintenance – a task they perform with great skill.

Here, I would introduce at least four multi-bowled cascade fountains to advertise Harrogate as the original Spadacrene Anglica — the English spa fountain, which would be illuminated at night, and of such a design as to ensure the minimum side effects from wind. Along the low row of boundary stones, which separate the gardens from the footpath, I would add a long ornamental railing, which would be attractive to the eye and useful in emphasising that pedestrians should remain on the path.

Why should earlier attempts to provide Harrogate with handsome water features always be doomed to failure? When a fountain was placed in Station Square after the Second World War, as part of the council’s plan to improve the town’s appearance, an order came from Emmanuel Shinwell’s Department of Power to turn it off, to save energy. A few years later, the council re-introduced a water feature as part of its reconstruction of Station Square, which was eventually filled in.

When Speyhawk remodelled the area outside the Victoria Quarter in 1992, it incorporated pools and fountains, which a subsequent owner was allowed to remove. The time is well overdue to provide Harrogate with some magnificent water features to celebrate its Spa past.

Tomorrow Malcolm gives his visions for the future of Station Square, Cambridge Street, Library Gardens and Princes Square

A Chinese restaurant set in the main hall of the Royal Baths in Harrogate plans to reopen next year after months of repairs.

Royal Baths Chinese Restaurant has been closed for most of the last two years due to coronavirus lockdowns and an extensive refurbishment that began in May this year.

Because the restaurant is based in a Grade II listed building, the work has been more complicated than expected.

The building, which is owned by North Yorkshire County Council, underwent a series of roof repairs before work started on the internal central hall in September.

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Now the Royal Baths Chinese Restaurant has revealed that the works are almost complete. It said on its Facebook page:

“We are almost finished with the renovations. However we will not be open until after the New Year.

“Royal Baths Chinese Restaurant wish you all a very merry Christmas and happy New Year. We look forward to seeing everyone in 2022.”

Although the Royal Baths Chinese Restaurant has been closed, the owners have continued operating at their other site, Haks Little Royal Baths Chinese Restaurant, on Station Parade.

North Yorkshire County Council has been accused of making a “trophy investment” by buying Harrogate’s Royal Baths for £9m, as part of a bid to raise money for frontline services.

The council set up the Brierley Group of firms, ranging from house builders to lawyers, in 2017 to bring together council-owned companies and save money. However, last year it reported a loss of £639,000.

With further losses forecast for the current financial year, some members of the authority have questioned whether the council has the necessary business acumen to run the array of firms.

A meeting of the Tory-led authority’s corporate and partnerships scrutiny committee heard the pandemic was continuing to significantly affect some arms of the Brierley Group.

Officers have estimated revenue returns for its property investment this financial year of £282,000, which equates to a return of 2.38 per cent.

The meeting heard the Royal Baths property comprises four commercial units, including a nightclub, bar and restaurant that had all closed for extended periods over the last two years, but also that “the longer term viability of some tenants is a concern”.

Officers said covid and the resulting lockdowns could not have been foreseen and officers were working closely with tenants to achieve a return to pre-covid performance as soon as possible.

‘Absolutely speechless’

After learning of the rate of return, Conservative member for Escrick, Councillor Richard Musgrave, told the meeting he was “staggered” to learn the council had invested £9m in the Royal Baths:

“I thought you might say a million for example for four units. I am absolutely speechless.”

“The performance looks very very poor. Several of the tenants are struggling by the looks of things. It looks like a poor investment, it looks like a trophy investment.”

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The meeting heard the council had carried out thorough checks before accepting tenants.

Councillor Gareth Dadd, the authority’s deputy leader who also chairs the council’s Commercial Investment Board, said the Harrogate Baths investment had been approved by the council’s executive.

He said businesses sometimes had to take non-payment of rent “on the chin”:

“It’s about the percentage rate of return of investment that we would expect and at the time it looked good. Even with covid, which has clobbered the market, we are still the right side of the line in terms of leaving the money in the bank. Overall, yes it hasn’t performed as well as anybody would have hoped, but we are still making a margin on it.”

The meeting heard a proposal, first revealed three years ago, for the council to set up a solar farm to generate more funding had been shelved after the set-up costs and time for a return on the investment were found to be prohibitive.