Public cash fears over landmark
THE collapse into administration of the hotel company that owns the Coal Exchange could mean Cardiff council losing public money.
Signature Living Coal Exchange filed for administration last month, just four months after the council loaned the company £2m to finish refurbishing the historic building.
The Coal Exchange, on Mount Stuart Square in Butetown, was built in 1888 and soon became the hub of the global coal trade.
From 2001 to 2013 it was a music venue, but the building grew increasingly dilapidated and was eventually deemed unsafe.
The council used health and safety powers to carry out emergency safety works in 2014.
The Exchange Hotel opened on the site in 2017, owned by Signature Living, who were in the middle of refurbishing the building before the coronavirus lockdown began.
Councillor Mary McGarry asked about the Coal Exchange and the financial risk at a full council meeting on Thursday.
Cllr McGarry said: “I wanted to ask for clarity on who actually owns the Coal Exchange and whether the council risks losing any money because of the company going into administration?”
Cllr Russell Goodway, cabinet member for investment and development, said: “The company having gone into administration creates a fairly sensitive situation, where we need to respect commercial confidentiality in order to protect the interests of the many parties which have an interest in that business.
“The council is working closely with the administrators and other secured creditors, and the council is itself a secured creditor, to understand the administrators plans.”
However, the risk of losing public money is not from the £2m loan decided in January to Signature Living, as the council hasn’t yet given the company the money.
The risk of losing public money actually comes from how the council paid for the works to make the building safe in 2014.
The council took out a “charge against the building” to pay for the safety works — meaning the building owner was already in debt to the council.
Cllr Goodway said: “The council has never provided loans to Signature Living or to the Coal Exchange company. Our charge relates to a liability that was incurred prior to the involvement of either Signature Living or the Coal Exchange company.
“It has never been the council’s intention to advance funds to the company, but rather to fund works to complete the building refurbishment.”
The council could still loan the money for the current refurbishment of the building. But if Signature Living doesn’t come out of administration, the council could lose the money that it’s owed for the safety works in 2014.
Cllr Goodway said: “The council will consider providing funding, but only [for] the necessary works to complete the redevelopment of the building; only on the basis previously agreed by cabinet; and only after appropriate due diligence to ensure taxpayers’ money is protected.
“But, in the event the company does not come out of administration, then clearly the council is at exposed to the extent of the value of its current charge.”
Cllr Goodway did not specify how much is owed to the council nor how much public money is at risk.