Mouchel will to end its contract for managing the operations at The Lawn in Lincoln, which would lead to up to ten redundancies.
Bookings for events after February 27 at The Lawn have also been cancelled, as the firm started a consultation period for the move earlier this week.
The City of Lincoln Council is currently tendering for the lease to operate The Lawn for three years.
The council tried to sell The Lawn last year, but received only one bid from Jonathan Pass, owner of Charlotte House Hotel on the grounds, which was rejected.
— Update on February 22: A Mouchel spokesperson said: “Mouchel’s agreement with the City of Lincoln Council (CLC) for the management of conference and banqueting facilities at The Lawn comes to an end on 28 February following a one-year extension of the contract.
“CLC has taken the decision to put a new lease out to tender. Following careful consideration, we have decided not to tender for the lease as we have been unable to find a viable business case that would permit us to successfully continue with an operation at the venue. As a result, a formal consultation process has commenced with a small number of staff.”
Meanwhile, The Lawn remains on sale for potential buyers. The City Council purchased The Lawn in 1986 for £425,000.
There is a £50,000 per year deficit in running costs for The Lawn, it takes some £120,000 for repairs per year, and it would need some £2.5 million capital investment over the coming years.
The Lawn site totals around 1.62 hectares and includes three main buildings, the main complex, the conservatory and Charlotte House (which is subject to a long-term lease), as well as the south lawn and car parking.
Formerly a hospital, the main complex was built in 1819, with Charlotte House added in 1938 and then the conservatory in 1989.