RVT Future update and finance report
This campaign update coincides with the first anniversary of the fighting fund campaign, so we’re treating you to a bumper edition. We are committed to complete transparency so this a longish sort of update.
TL;DR: the RVT is still on the market so not safe yet, the Community Benefit Society rules and registration have been submitted for approval, and we are recruiting in preparation for the share offer. For all the news, read on.
The figures for this quarter are here. You’ll notice that not much has changed since November – but it’s about to. We’re about to invest the majority of our fighting fund into creating two paid positions to make the purchase of the pub more achievable.
Why we are looking to hire people
Though we’ve had a lot of help, RVT Future is still the small group of volunteers that raised the alarm about the sale of the RVT in 2015. But fundraising millions of pounds to bring the Tavern into community ownership is a task we need professional help with – and so it’s where we’ll be spending the bulk of our fundraised budget. We are looking for:
- Part-time Project Manager
- Part-time Fundraising Manager
We will advertise these positions shortly.
What we’ve been doing
Our main focus has been setting up the legal structure for a community-owned RVT. After looking at various models, we’ve decided that a Community Benefit Society is the best vehicle for us. It has many of the features of a co-operative or a social enterprise, and is owned by its members. This kind of Society was created under the Co-Operative and Community Benefit Societies Act 2014. It has already been used for community buy-outs of pubs and shops, most famously The Hastings pier. Because these Societies are regulated by the Financial Conduct Authority, it takes quite a lot of paperwork and time to set one up.
What is a Community Benefit Society?
A Community Benefit Society (CBS) is owned and controlled by its members – the shareholders – on the basis of one member one vote. This means that members have an equal say in decisions, no matter how many shares they own.
Our Society will be run by a board of directors. Initially, those directors will be chosen by the Society’s founder members. If we succeed in buying the RVT, the directors will in due course be elected by the wider membership. Directors will be able to co-opt other people so that the Society has the right skills to make it a success.
Who will own and run the Royal Vauxhall Tavern?
The CBS will buy the freehold of the building. Owning the building will protect it from development and ensure it remain in the community. Owning the freehold is not the same as owning and operating the business.
The current operator runs the RVT very successfully. If we succeed in buying the freehold, the CBS would become his lessor, and he would continue to operate under the terms of his current lease (unless we mutually agree other terms). He’s been doing a great job and we are confident that we would work well together.
Is the Community Benefit Society a charity?
The legal advice we received was that the CBS would be unlikely to be recognised as charitable. But the CBS Rules, which are legally binding, state that the purpose of the Society is to own the freehold of the RVT and to ensure that it remains open and operated for the community.
What rules govern the Community Benefit Society?
We are putting the finishing touches to the CBS Rules. This is a legally binding document that’s required for registering the CBS, so we want to make sure we get it right. The Rules will be published once the registration is complete, but here are a few things we considered:
- Minimum shareholding: we have confirmed that a share will cost £250. We believe this is a good balance between affordability and the need to raise a very large sum. But we know that £250 is beyond the means of some supporters, so people will be able to club together to buy a share. We will also make it easy for shareholders to buy shares for others.
- Withdrawal of share capital: we don’t want people’s money to be locked in indefinitely if they need it back, but on the other hand we need to ensure that the business has sufficient funds. So it will be possible to withdraw, but only where the Society can afford to pay without jeopardising its business.
- Protecting the asset: our purpose is to ensure the RVT remains in community ownership for years to come, even generations. So we are putting in place rules that will make it very difficult to sell the society’s interest in the property or to use the property as security.
There have been many other issues to consider so this has taken us longer than expected. But we have now submitted a draft to Co-Operatives UK. Once they approve the Rules, we can move on to formal registration with the Financial Conduct Authority. And then we are ready to move!
So what about the share offer?
Once the CBS is registered, shares can be offered. The share offer will explain the terms, how much we are seeking to raise, the timescale, how applications and payments will be processed and the arrangements for protecting investors’ money.
Asking the community for a large sum of money is a serious undertaking. We are acutely aware of the responsibilities placed on us to carry out this task professionally, openly and carefully. So the share offer and the supporting administration are important things to get right.
As a community endeavour, it is also crucial that the CBS and share offer represent the entire community. We are actively seeking ambassadors from all sections of the community and would love to hear from you if you’d like to get involved. We also have plans for making the RVT an even more inclusive space once we own the freehold, for example by improving accessibility.
What’s the current status of the RVT?
The current owners, Austrian property developers Immovate, are still trying to sell the building. We understand that they are seeking a price of £4m. We believe this is a massive over-value that can only be justified if the building is regarded as a development opportunity. But the protections that we helped put in place (the Grade II listing, the ACV and the Sui Generis) make such development difficult (but, sadly, not impossible).
We will not ask the community to buy the freehold at an inflated value. We will also require a full structural survey, with the costs of repairs priced into any sale price that we agree with Immovate.
So the RVT is not yet safe: a buyer could come along any day and we could lose the RVT for good.
We are proud of what we achieved so far with your help. But it’s been hard work, and at times we have not progressed as quickly as we would have liked. We are all volunteers, and we all have other commitments. To pull off such a large community buyout, we need your help. Here are some things you can do right now:
- Let your network know that the RVT is not safe and share this update with your network.
- Spread the news about the coming share offer to generate interest.
- Start putting aside money towards a share in the RVT.
- Email us if you’d like to get involved in any way.
- Tell your friends about the two positions we will be advertising soon.
As ever, we invite you, the community, to read our latest update and to email us any comments or suggestions to firstname.lastname@example.org.