2020/NO.41 - The emotive question of non-viability is at the heart of any application for change of use in either a closed or underperforming pub trading operation. The new owner, for it is hardly ever the original Pubco or Brewer, will claim with a wringing of hands that there is not a hope in hell of the place ever being viable. In the formality of things, he will engage the learned support of probably a Chartered Surveyor echoing those heartfelt sentiments. Time and time again the supporting logic for non-viability is totally misplaced.
Pubs that have been left to drift, abandoned and closed can and do rise like a phoenix from the ashes of neglect to once again become a vital and successful heart of a local community. We have been delighted to have aided that recovery and relaunch in many different cases Nationwide. But how did this sorry state of affairs happen in the first place? From that past, you build for the future and correct the previous errors.
In the days of a pub being on every street corner, the drinking culture was very different. Time moves on and we all have to adapt to change. Spin forwards to the 1990s and the continuing rationalisation by numbers of the pub stock in England and Wales. This is not to defend every pub as being viable come what may but to accept that the drinking scene has polarised. But the process accelerates if the trade supports are allowed to fall away. Nearly always the original trading style was as a supply tied pub. Over rented and having to charge full whack on bar prices because of the tie. Scraping a living under those conditions meant that property maintenance comes very low down the list of priorities if indeed at all. So does enthusiasm which is ground out if money is very tight. The Brewer/Pubco makes an attempt to re-let the pub but the death spiral has set in. Even offering the new tenancy on a free of tie basis often sees a daft rent being proposed. The scene is now set for Act Two.
The Brewer or Pubco recognises a corporate duty to maximise property assets. So rather than wasting time trying to find another patsy to take over the much ailing pub they just give up. The freehold is offered for sale, and to try to maximise value, with the hint that a change of use could be in the offing. Subject to planning approval of course. Either the new owner keeps the current tenant at an increased rent and never lays a finger on the property by way of significant maintenance or, if it is closed, boards the place up and leaves it to rot. It is very rare to find operational publican skills in a developer. They may be very clever people in terms of development but often plain useless at the revitalisation of a business. But that was not the underlying reason why they bought the place. It goes without saying that it takes skill, flair, and much creative thinking to bring back to life a “dead” pub. We then proceed to Act Three.
Little if any consideration is given as to how totally changed the trade can be if there is no supply tie. The previous strangulation by supply tie is forgotten as was the ground out lack of enthusiasm. The justification for non-viability glosses over those two vital considerations. “The trade has gone and cannot possibly return” the developer’s expert will proclaim. ”Look at the other pubs in the area, they will never compete” and thereby overlooking yet another key issue. The competition is not only open but successful. Not a failing pub amongst them as if by chance. This has been the stand out issue in a number of rural change of use applications (unsuccessful we would add) because the sense of ‘community’ has been forgotten. That social need for the general area has not gone for good as the developer would have you know. It has been suppressed all the way back to the original supply tie, lack of investment, and lack of enthusiasm. Building from that previous template can result in the rejuvenation of a vital cornerstone of the local community. No need to squeeze the fruit till the pips run blood as happened in the past in the pursuit of a corporate return. Played sensibly and in the right circumstance pubs can return to a cherished future. But that would not be remotely in the thinking of the developer who has made the financial commitment to try and ensure that the building never operates as a pub ever again.