A council is remaining positive about a £750,000 Gainsborough regeneration scheme despite a potential return of just £19,000 in five years time – £187,000 less than it anticipated.
Members of West Lindsey District Council on Thursday, were given a report on the Market Street Renewal company, a joint venture with Dransfield Properties by executive director of resources Ian Knowles.
The council has so far invested £375,000 in the form of a shareholder loan after the company purchased 25 and 27 Market Street, along with another unnamed building.
“We did that on the basis we believed investing in the properties within Gainsborough would allow us to generate a return,” said Mr Knowles.
“The costs incurred by that company to both acquire and develop those properties has been far greater than was originally anticipated.”
He blamed heritage requirements of the buildings.
He said however, that there had been positives, including grants in support of the work and that the project had shown the authority could regenerate the town.
A report before councillors outlined how the original business case was to buy and regenerate five properties, of which three have been purchased.
It was originally predicted to have £206,000 remaining after five years following the resale of the shops and flats created above them.
The other two however, were “deemed unviable by the company” and instead sold directly to a subsidiary of Dransfield.
Mr Knowles said it would have required more money from WLDC had the original plan gone ahead.
Councillors however, remained positive about the regeneration plans.
Councillor Jeff Summers: “With this type of work, the biggest problem we face is viability once you put the money in. They are so desperate for renovation it’s costing such an amount of money there’s no profit in it.”
“It’s just a question of doing the work to make the town look and work better,” he added.
Councillor Stuart Kinch said the standard of what had been done was “fantastic” but raised an issue with the £80,000 price tag for the flats.
Councillor Roger Patterson said his group also supported the regeneration of any town centre, but urged caution in the face of the changing high street and rise in online retailers.