Piece Hall makes £850,000 operating loss after huge £19m renovation

Halifax's historic Piece Hall made a loss of £855,142 in its first year of operation and revealed daily costs of £5,000 per day to run in its first annual report and set of accounts.
The Piece Hall has revealed its accounts for 2017/18The Piece Hall has revealed its accounts for 2017/18
The Piece Hall has revealed its accounts for 2017/18

The Grade I listed building has been placed at the heart of Calderdale's tourism appeal, bringing in around three million visitors in its first 12 months, double the number initially expected.

It was anticipated by the Piece Hall Trust's trustees that the charity would make a deficit in its first year of opening to the public and for the subsequent few years.

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However, says the trustees' report for 2017-18, this is larger than expected due to unforeseen one-off costs and increased ongoing fixed costs, together with the delay of opening tp the public until August 2017, which impacted on the ability to generate income.

The report says: "To date. there have been numerous problems with the completion of the building renovation, which has restricted the ability to rent units to tenants as early as projected in the business plan.

"These problems continued into the 2018-19 financial year."

Because the Piece Hall is open from 7am to 11pm, seven days a week, it costs £5,000 a day, including staff costs (57 full-time and 32 part-time), to run and the report identifies a focus on fundraising as being required to supplement income needed to manage the building and secure its sustainable future as well as staging events.

Breakdown of the costs

The accounts, audited by independent auditors BHP LLP, show the Piece Hall Trust's main direct costs as being wages and salaries (£903,452 in 2018 and ££472,659 in 2017), eventing costs (£436,475 in 2018 and £17,613 in 2017), marketing and publicity (£152,962 in 2018 and £85,201 in 2017), food purchase costs (£184,251 in 2018) and computer repairs and maintenance (£108,420 in 2018 and £8,671 in 2017).

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Other expenses include cleaning (£29,281 in 2018), postage and stationery (£12,759 in 2018) and motor and travel expenses (£11,281 in 2018), among other costs ranging from insurance to power supplies.

A fundraising strategy has now being created as a priority in 2018-19, say the trustees.

The 18th century cloth hall re-opened after several years and £19 million of restoration work on August 1, 2017, with Calderdale Council being a major and ongoing funder.

There are still some elements of the transformation to be completed by the council and its contractors before a 125-year lease at a "peppercorn" rent transferring the world-famous building to the Trust's charge is signed off.

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Another key priority is filling the five remaining units with high-quality tenants which will complete the food and drink and retail and leisure offer in the Piece Hall.

The Trust receives funding from the council through a Service Level Agreement (SLA) which totals £2.75 million over seven years and this has been "front-loaded" to cover the higher costs in the first three to four years.

In order for the organisation to start up and operate the enterprise elements of its business plan - the Trust has developed a business model with multi-national professional services organisation Price Waterhouse Coopers, to sustain the Piece Hall for the next ten years and achieve its charitable objectives - a £3.5 million loan was also agreed in 2017-18 financial year with Calderdale Council.

This is broken down into three key packages, a £1 million capital loan to fit out its restaurants, ice-cream parlour and delicantessan, a £2 million revenue loan to provide the Trust with suitable levels of funding over the next decade and an optional £500,000 "essential maintenance loan to deal with works that may occur after warranties have expired or unexpected major works that need to be undertaken.

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During the year £500,000 of the revenue loan and £305,000 of the capital loan was drawn down by the trust.

In all the council contributed £10 million towards the restoration, another £7 million coming from the Heritage Lottery Fund nationally and the balance coming from a fundraising campaign.

Tourism, of which the Piece Hall is a key element, is a key element of Calderdale's economy which has nearly doubled since 2010 from £248 million to £344.1 million in 2017, employing more than seven per cent of Calderdale's workforce.

The Trust's vision for the Piece Hall is to create a world-class iconic heritage pulling in visitors from across the world, serving the local communities needs and contributing to the regeneration of borough, county and country while preserving and sustaining its heritage through its diverse cultural, retail and heritage offer.

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The Trust was successful in obtaining other sources of financial support in 2017-18, particularly £334,000 from the Leeds City Region Business Rates Pool to stage a number of cultural events over 2018 and 2019.

Static donation boxes raised £5,000 and Piece Hall membership £8,000.