DEVELOPER McAulay will start paying rent for the Markets in November – a decade after taking on the development project. The property will net the States about £230,000 a year, but it will be paying some subsidised rent to McAulay to use part of the building.

Treasury minister Lyndon Trott has responded to written questions about the Markets from Deputy Mary Lowe.

McAulay’s proposal for the development was accepted by the States in 1997 and the company has spent more than £20m. on the buildings.

‘The States never intended for McAulay to start paying rent until it started receiving rent from tenants,’ said Deputy Trott.

The firm will start paying rent to the States on 24 November, which will be a year after the practical completion of the building works.

‘It is normal practice in such a development, which requires tenants to occupy units on a shell and core basis – the basic building without specialised finishings, fixtures or fittings including suspended ceilings and floor coverings – to have rent-free periods while they fit out prior to trading.’

Under the agreement, the States will get 8% of the gross rental income received by the developer or at least £90,000.

There is 12,500sq. ft of office space in the Markets which was provided by the developer.

The Housing Department was initially due to move in but has since gone to Sir Charles Frossard House, so the Probation Service, Cadastre, the Company Registry, the Intellectual Property Office and the Enterprise Agency will now occupy the space.

The last three will pay a commercial rental to the States.

The relocation of the Probation Service will allow the States to terminate the lease on its Court Row premises.

Moving the Cadastre Office is part of the plan to allow the sale of Nelson Place in Smith Street

to generate funds for other projects.

The States will pay less than £20 per sq. ft – £10 less than the normal commercial rate for that area of Town.

Rental income and the money paid by McAulay add up to the £230,000 annually.

Deputy Lowe was concerned that rent from the five flats on the second floor – £740 a month each – appeared to be on the low side.

They have one bedroom and a kitchen/living/dining room but no parking.

‘States Property Services calculated the proposed rentals on similar properties available to rent at the time and believes that the rents are providing good value to the tenants and providing the States with a good income,’ said Deputy Trott.

All the flats have been let –

four to key workers and one to staff from a business in the building.

The annual income from the flats is expected to be £42,600.