Pier is up for sale!

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seahermit
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Pier is up for sale!

Postby seahermit » Fri Feb 23, 2018 10:20 pm

I spotted the headline, glanced briefly at the Hastings Observer article and I am afraid I burst out laughing. Which attracted others to the news-stand and we had quite an impassioned little discussion about it!

It's like the re-run of an old film. We have seen it all before, several times. Unrealistic and ill-thought out visions for Hastings Pier which come to nothing, so now it is apparently being sold off to anyone who wants .. who will have a go at making a few bucks out of it, before the structure is passed on to some other temporary custodian.

I thought it couldn't be sold, thought it was in the hands of a trust into which numerous Hastings residents had invested a share ..

Other coastal towns have attractive and perfectly well-functioning piers with various attractions including music, theatre etc. It's rather depressing that Hastings doesn't seem to have any idea how to run anything properly. We really need some intelligent administrators with some vision and the competence to actually see it through.

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Richard
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Re: Pier is up for sale!

Postby Richard » Sat Feb 24, 2018 6:18 pm

It is unusual, but not unheard of, for a community interest company / Trust to be limited by shares.
When the Trust advertised the sale of shares they warned that difficult times may be ahead.
There may be liabilities outstanding if the Pier is sold and any such debts would take first priority.
Shareholders may end up with nothing.
I believe an entrepreneur such as the owner of Eastbourne or Brighton Pier may soon show an interest but whether the shareholders would receive much of their investment back, if any, will depend upon negotiations and liabilities.
A pity that it has failed but all businesses carry risks.

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Richard
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Re: Pier is up for sale!

Postby Richard » Sun Feb 25, 2018 7:46 am

The Pier share issue was revolutionary because it was the first time a registered charity in the UK has issued share capital.
Charities tend to be companies limited by guarantee, which means they can’t have equity. That restricts their capital to either donations or debt. Neither were appropriate here because donations wouldn’t get enough money in (research shows people invest significantly more in shares than they give as donations) and debt was too risky and too expensive for a fledgling business.
The Charity Commissioners were nervous but recognised that a charity paying a very low level of interest to supporters, if it could afford to, was much better than paying a bank a much higher rate of interest.
It also marked a departure for piers generally, which have tended to be owned in both the private and public sectors. Hastings was the first to be community-owned.

It is now a Community Benefit Society (Bencom) with exempt Charity status.
Community benefit societies must only use their assets for the benefit of the community. If a community benefit society is sold, converted, or amalgamated with another legal entity, its assets must continue to be used for the benefit of the community and must not be distributed to members.
So, it looks as if shareholders would not have been entitled to profits (just interest on the shares, perhaps) even if any were made, which they were clearly not.
Any legal challenges may arise to the intended sale and it will be interesting to see what happens next.

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seahermit
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Re: Pier is up for sale!

Postby seahermit » Sun Feb 25, 2018 12:47 pm

I suspect that most people would find the complications of the Trust's business structure and its relationship with shareholders complicated and rather a bore.

The plain fact remains .. that the impression was created that the pier was to some extent owned by and operated for the benefit of the community. Now it is to be summarily sold off as yet another failed business venture and I doubt very much that "shareholders" will have much say in the matter.

It was obvious almost from the start that the structures being erected on the pier were very basic and unlikely in themselves to generate the kind of income needed to make the pier financially viable.

What sort of people formed membership of the Trust? Did they have experience of successful business projects? Did they consult advisors and formulate a serious plan based on proposed activities on the pier and the projected income? I doubt very much that those questions will even be asked by anyone!

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Richard
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Re: Pier is up for sale!

Postby Richard » Sun Feb 25, 2018 7:25 pm

"I suspect that most people would find the complications of the Trust's business structure and its relationship with shareholders complicated and rather a bore."

Well, of course, many folk are naïve and want to believe in all manner of good things. Most would not bother to read the small print and got carried away on a wave of euphoria, nothing new in the history of investing there.

"that the impression was created that the pier was to some extent owned by and operated for the benefit of the community."

And so it was and adverts are not always true, buyer beware has deep roots and, as you say:

"It was obvious almost from the start that the structures being erected on the pier were very basic and unlikely in themselves to generate the kind of income needed to make the pier financially viable."

I rest my case.

Sorry to sound harsh but the writing was on the wall and we (investors) have to be realistic and accept that they were 'sold a pup'.

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seahermit
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Re: Pier is up for sale!

Postby seahermit » Sun Feb 25, 2018 8:22 pm

I wasn't sold a pup and I didn't invest anything. Because from the start I was doubtful about the extravagant claims being made about the pier's future prospects, in view of previous false promises. I would have supported the project if I had seen some really convincing business plan being put into effect, but that absolutely did not materialise. Woolly thinking and idealistic visions do not make a project succeed.

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Richard
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Re: Pier is up for sale!

Postby Richard » Sun Feb 25, 2018 9:05 pm

The fact of the matter remains that £590,000 was raised by the sale of shares.
It appears that many people were very keen to help the project succeed.
It has now failed and they may lose all of their money.
I understand and sympathise with the wish to help out by those who bought shares but simply did not realise that it was a very risky venture, even though they were warned at the outset that there was a strong possibility of failure.
Investors were 'sold a pup' but with very good intentions and better times may be ahead becasue of it.
They have contributed to the next stage of the pier's development as otherwise, whatever administrators were in charge, they would have drawn numerous salaries and racked up expensive bank loans in trying to make progress.
Now there is a chance of a single entrepreneur taking over and using their own money to make major improvements. People using their own money are naturally more 'business savvy' and that is exactly what is needed now.

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Richard
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Re: Pier is up for sale!

Postby Richard » Sun Mar 04, 2018 9:31 pm

It’s not hard to find people who are keen on the open plan meditative, minimalist space but “fine words butter no parsnips” in the end.

https://www.hastingsobserver.co.uk/news ... -1-8400212

I went round with a bucket collecting pennies for the restorationm, which many folk thought would never happen.
Well it happened but, as a structure clearly in need of further resources, it has now been passed on to the next stage of its survival - and survive it surely will!


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