Seachange Sussex have finally let their Hastings town centre offices – but have given the occupiers a year’s free rent.

In January 2018, Seachange Sussex announced that they had let their Havelock Road offices. These £7m offices, in Hastings town centre, had been virtually unoccupied for two years so Seachange must have breathed a big sigh of relief when the Department for Work and Pensions (DWP) agreed to let them.

In the Hastings Observer, a Seachange spokesman said:

We’re thrilled the DWP has chosen to move to Priory Quarter. They’re an important employer which we wouldn’t want to lose from the area. This move brings hundreds of workers into the business district, which will provide a big economic boost to Hastings town centre.

Jobs created or jobs moved?

The project was, according to funder the South East Local Enterprise Partnership (SELEP), supposed to create  440 jobs. However, the DWP jobs are simply moving from elsewhere in Hastings – so no new jobs have been created by the development, apart from the 12  created by the first tenant of the building, Medica Group.

Rent-free

Buried deep in a March 2018 SELEP document about the Growing Places fund (which paid for the office project), we can find this statement about the Havelock road development:

There is a 1 year rent free period as part of the deal and therefore risk of insufficient income to meet full 18/19 repayment.

It is clear from this that the £7m given to Seachange for the project was a loan, rather than a grant (the fund allows for either).  It looks as if offering a sweetener to the DWP may be putting Seachange’s finances at risk.

How much?

According to the Hastings Observer article, the DWP is renting a total of 32,000 sq ft of office space.

We don’t know much Seachange was asking for the rent, but a comparable office for rent in Hastings at the moment (May 2018) is going for £12.45 per sq ft/year:

If the Havelock Place offices were rented at the same price, that would mean a cost of £398,400/year. In fact, we’ve heard from numerous sources that Seachange space is usually more expensive than average, so it might well be more.

A £400,000 sweetener

Here’s how the situation looks to us:

1. Seachange receives £7m of public money to build the offices in Havelock Place;

2. In March 2015, Seachange announces  that the offices are ready to occupy. It says that one occupier – Medica Group – has already been found. Medica will occupy 16% of the space;

3. By March 2017, two years on, still only 16% [pdf,p99] of the office space has been let;

4. In January 2018, Seachange announces that the rest of the building has been let to the DWP. They fail to mention that no new jobs have been created, nor that the DWP was given a sweetener of perhaps £400,000.

No scrutiny, no accountability

Seachange Sussex is dependent entirely on public money. As a private company, its business is conducted with no public scrutiny or accountability whatsoever. As a member of the public, you can’t attend its meetings or read its minutes. It is not subject to the Freedom of Information Act so you can’t demand that it answer questions about its business.

Other projects still empty

Havelock Place is very far from the only Seachange project that’s struggled to attract tenants. North Queensway is still empty five years after construction began. Half of the proposed buildings at Enviro 21  – a project of Seaspace, the predecessor company under the same director as Seachange – were never built. As for the vast amount of new business space Seachange are building around the Queensway Gateway road and the North Bexhill Access Road – only time will tell whether they manage to find tenants without having to offer further inducements.