This leaves us with the following possibilities.

• The shop may be purchased prior to, or at, the Auction by a private buyer and the shop and business then run by that individual.

• The shop may be purchased prior to, or at the Auction by a private buyer or a property investor/developer who is looking for a tenant to run the shop. If a purchaser does not want to run the shop, we aim to be their tenant

• The shop does not reach its reserve at Auction and is unsold. If there is no purchaser we will aim to raise the money (time permitting) using all fund sources available to us

Here we explain how we will need to approach each of these three ownership scenarios.

A buyer takes it on
As has always been our position, if a buyer comes forward wishing to run the shop – great, we will support them. This would require no further immediate action by the Community Group other than to encourage residents to support the new owners – and to encourage them to sustain the services that make the shop valuable as a cornerstone of the community.

Clearly there is always the danger that such a buyer might have an agenda to run the shop down over time, but if that emerges as a possibility, we will be determined to use the support we have across the community to take action to protect the shop’s future. This was the situation that emerged in Etchingham, and from which the community shop was born.
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We lease the shop (Option A)
If a purchaser does not want to run the shop, we would aim to be their tenant. We believe that our support from across the community would mean that we would have a good chance of being considered first by the new owner. In this option, the community would become the leasehold tenant of shop rather than the freehold owner. We would set up a Community Management Group to run the business, details of which are covered in the section that explains how we would run and operate the shop.

A Trust has already been set up to help facilitate a seamless transition and to provide the temporary vehicle for immediate working capital.

This outcome may be achieved by one of various possible routes but essentially involves the freehold owners retaining parts of the property for residential redevelopment purposes, and granting a commercial lease of the available shop area to the community.

The main benefits of lease rather than ownership would be:
- Lower acquisition costs
- Significantly lower debt profile and risks
- Consequently lower shop overheads
- Improved business sustainability

In other words, because we would not have to pay interest on loans taken out to purchase the property, we would be able to plough more of the takings of the shop back into improvements to the services and products offered to the community.
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We buy the shop (Option B)
This option assumes that no suitable buyer is found prior to or by the end of the auction. Our research shows that raising the full purchase price would take several months so this option relies on agreement of a suitable period before the sale to the village is completed.

In this scenario, the RGVS Association would purchase the freehold of the building post Auction and set up the Community Shop run by a Management Committee.

This option would require a significantly greater level of funding which would include the necessity of taking out a commercial mortgage for a substantial proportion of the purchase cost. There are various commercial lenders who specialise in providing flexible mortgage funding for projects of this type. We have approached two lenders and subject to everything being in order the estimated time scale between full application, which will require a detailed business plan, projections and costs, to the release of funds is estimated at around 6 – 8 weeks.

It is likely that initially we might need to raise up to 70% of the purchase and development costs in this way. The amount required can obviously be lowered if there is strong and generous support in the other funding options available for the community to support and invest in the project. Separate loans would be taken out to cover the cost of any residential conversion projects.

The main challenges of ownership rather than lease would be:
- Much higher acquisition costs
- Significantly higher debt profile and risks
- Consequently higher shop overheads
- A greater pressure on business sustainability

If the conversion of the associated residential property is successful, and the shop is able over time to pay off its borrowing, this could ultimately provide the most secure longer term future for the community shop. However it is a higher risk option and one that would require the most strenuous fundraising from within and outside the community. On balance, Option A is the preferable one and the most likely to result in the successful creation of a Community Shop for Rushlake Green, Warbleton and the surrounding areas.
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