Unhappy tenants say they’re ready to quit loss-making Boxpark

It’s not been a great week for Boozepark. Then again, nor has it been great for Croydon Council, either, as it was they who provided a £3million loan and more than £400,000 in hand-outs of public money to help get the private business started.

Boxpark: there’s a slow exodus of dissatisfied tenants

Not only has Nando’s parked its tanks on Boxpark’s lawn, this week opening a rival restaurant on the corner of Dingwall Road, but Boozepark’s owners have received a threat of a group legal action from their own tenants, some of whom are unhappy with the way the venue is managed, claiming “deep and prolonged dissatisfaction concerning the operation of the Croydon Boxpark”.

In the lengthy lawyers’ letter, seen by Inside Croydon, among the various complaints is that Boxpark’s wifi system (which the tenants are forced to use) has frequently failed to function, so rendering the Boxpark-provided payment processing system inoperable and also disabling traders’ own CCTV systems within their units.

They claim that there was one period when Boxpark’s wifi was unreliable or not functioning for more than six months.

Traders also allege that there is a serious  issue with mice and “other rodents” because of their landlord’s failure to ensure effective pest control.

A brief check of Boxpark this week showed that of the 40-or-so food and booze units  available, at least 11 are, as the management puts it rather euphemistically, “coming soon”. Or, as any normal person would say, empty.

Lazeez: calling time on their Boxpark outlet

Of the others, 10 units are occupied by just two larger restaurants. Boxpark operates its own in-house bar business – to the commercial disadvantage of other units, some tenants maintain. And in an effort to fill the empty spaces, in what was supposed to be an exclusively food and drink venue, Boxpark now includes a barber shop…

Lazeez Lebanese Tapas has rented Unit 11 in Boxpark since the venue opened in a blaze of council-funded publicity in October 2016. But this week the owners (they run a successful restaurant on Duke Street in London’s West End) were planning to shut up their Boxpark shop.

They claim that their unit, despite costing them nearly £150,000 to fit out, has always been loss-making, to the point where they can no longer continue to trade there.

In March last year, Inside Croydon reported how around a dozen traders had left Boxpark in the previous couple of months because of tough business conditions, some of which were created or caused by their own landlord.

Then, the council stepped in with a business rate relief scheme which might have saved Boxpark’s tenants an average of £8,000 per unit each per year, money which would otherwise have gone to the Town Hall or government. With other bars and restaurants in the town centre struggling, some businesses folding, questions were raised about why they should be put at a commercial disadvantage by the council compared to Boxpark’s tenants.

Boxpark enthusiast Tony Newman, right, with owner Roger Wade

Yet now, even that kind of generosity with public money won’t be enough to stop Lazeez and others considering whether to continue to trade in Boxpark.

Boxpark was originally given the land, for a peppercorn rent, on a 10-year lease by the owners of Ruskin Square, to help occupy the long-neglected “gateway” site next to East Croydon Station. The £3million loan from the council is due to be repaid, with interest, in five years – which should mean it is paid off by next year.

“It is a loan, it is not a grant,” has been the mantra of the defensive Boxpark founder Roger Wade, who manages to overlook the £400,000-plus of grants of public cash his business has received from the council towards Boxpark’s launch party and other events, plus the regular venue bookings from the Town Hall. Council leader Tony Newman and his numpties have been frequent and thirsty visitors.

Yet even with such enthusiastic support from the council, Boxpark has continued to trade at a loss. According to Companies House records, after a loss of £523,000 shown in its first annual report, Boxpark’s latest (unaudited) accounts, for the 12 months to April 2018, show a further loss of £182,626.

Competition: a big chain like Nando’s parking outside is a challenge for the Boxpark tenants

Boxpark Croydon depends mainly on rents from tenants, such as Lazeez. Yet a number complain of poor footfall. That won’t be helped by the arrival of Nando’s, setting up a 100-seater restaurant in the former Lloyd’s Bank in AMP House.

Rents and service charges in Boxpark vary, but after the special introductory offer on rents in its first year, a typical unit will now pay £3,000 per month in rent and service charges, with electric bills on top of that. All other costs – staff wages, business loans and interest, the raw materials for meals – also have to be paid before the unit can “wash its face”. That’s an awful lot of over-priced burgers to flog each month.

“The service charges, electric and rent are too high for the size of our unit and the electric we use,” one Boxpark business-owner told Inside Croydon.

“Business is down 50 per cent in the last 12 months.”

Worse, while Boxpark’s big events may draw bigger crowds, but because the way the venue is set out, while the landlords’ own bar business remains open with its tills ringing, many of the tenants are usually unable to continue trading, their frontages cordoned off.

In the lawyer’s letter sent to Boxpark on behalf of Lazeez, it states that when the venue stages its large events, “those days are effectively write-offs”, and that the events “suffocate our client’s business and [do] not allow it to trade properly at the same time”.

According to one tenant, “On events days we lose 75 per cent of the business as we have no families visiting Boxpark due to drunken people. Boxpark wants to sell all the alcohol and cover all the area with drinkers.

“We requested some incentives from Boxpark to help us, as we are a small family business. But they refused.”

A source at Lazeez suggests that their company may not be the only tenants considering legal action.

In the letter sent to Boxpark, Lazeez’s solicitors state that after their clients took up their unit, “regrettably the subsequent experiences has been very far away from what our client had hoped for and had been promised. Consequently, the unit makes a trading loss.

Despite extensive marketing, Boozepark has not been drawing in the punters to eat

“Irrespective of broader market conditions, many of the reasons for this lie at your client’s door. Our client has suffered and endured a wide number of problems at the site.”

These “wide number of problems” include, according to Lazeez’s lawyers, “Our client has been required by your client to… use your client’s wifi systems and providers. Our client preferred not to use your client’s systems, but it was forced to do so and acceded to this instruction.

“The wi-fi systems have failed to be operational for very extensive and prolonged periods of time. Although these systems are integral to the successful operation of our client’s business, our client has been unable to use them. These time periods have not been momentary or irregular. They have instead been extensive, consistent and have seriously damaged our client’s business.”

The letter alleges that Boxpark’s wifi was down or unreliable for one period of more than six months and “this caused a severe and debilitating impact on our client’s business”.

Tenants suffer a double-whammy when Boxpark’s wifi was down, Lazeez claims. Boxpark has insisted that its tenants use its own payment processing systems, or EPOS. “The EPOS systems have not at all proved fit for purpose,” the lawyer’s letter alleges.

“The systems are… reliant on a stable internet connection. The failure to provide a stable internet connection has consequently meant our client has frequently been entirely unable to process sales and this has led to a significant amount of lost sales and customers.”

And then there’s the problem of pest control.

Given that the nearby Porter and Sorter pub, on the other side of East Croydon Station, was recently hit with a £180,000 fine when mice were found in its kitchens, tenants are understandably furious when they spot rodents in their units. With Boxpark built on a former railway goods yard, and with a stretch of waste ground nearby, it is the landlords’ responsibility to ensure that there is proper pest control.

The Lazeez lawyers’ letter states, “There have been multiple instances where mice (and/or other rodents) have been identified both at Boxpark but even within our client’s unit itself… the presence of rodents around food preparation areas is unhygienic deeply damaging and is likely to have severe implications on our client’s business and reputation as a restaurant.”

According to Lazeez, they have received no response from Boxpark.


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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in Boxpark, Business, Croydon Council, East Croydon, Jo Negrini, Property, Pubs, Restaurants, Ruskin Square, Tony Newman and tagged , , , , , , , , , . Bookmark the permalink.

2 Responses to Unhappy tenants say they’re ready to quit loss-making Boxpark

  1. derekthrower says:

    Another matter to be noted about the glorious novelty that is Box Park is when heavy rain occurs, water pools at the Dingwall Road entrance and you are treated to the entertainment of the squeegee man shoving pools of water towards the road sewers and pushing the false ceilings of the entrance to stop it gathering above the bar that is placed there. What shoddy cheap architectural design with a lack of attention to detail and practical application.
    Reminds me of a certain other Croydon developer.

    Liked by 1 person

  2. mraemiller says:

    I remember when all this was just a Warehouse Theatre…

    Like

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