Management of Richmond Chambers

The Richmond Centre in Londonderry consists of a large shopping complex and two floors (43,000 sq ft) of office accommodation known as Richmond Chambers. This part of the report examines matters relating to the management, occupancy and service-charge arrangements for Richmond Chambers. The main findings are as follows:

It is of concern that this office accommodation was not taken into consideration in the strategic planning for Civil Service accommodation in Londonderry. The present lack of clarity regarding management of the property should be reviewed.

When staff moved out of the building in October 1993 and June 1994, over 10,000 sq. ft (24 per cent) of space remained vacant for over four years. Since August 1998 the unoccupied space has been 4,500 sq ft. (11 per cent). The potential loss of rental income during this period is some £270,000 with a further £160,000 contribution to service charges foregone.

Under the terms of the lease the Department for Social Development is required to pay a service-charge which includes items such as security, maintenance, cleaning and management costs. The charges (approximately £220,000 for 1999-2000) are at precisely the same rates for the unoccupied, unheated, uncleaned office accommodation as they are for the busy retail units in the adjoining shopping centres which are open 7 days a week and late evenings. Consultants have now been engaged to review these charges to ensure that they are fair and reasonable.

The rationale for the present apportionment of the service-charge between tenants for the office accommodation is unclear and the full amount is not being recovered by the Department. At 31 March 1997 there was an accumulated deficit of £270,000 and the deficit for this year alone is over £66,000. The Audit Office recommends that the apportionment should be reviewed urgently to ensure that the Department is not carrying a greater share of the cost than is appropriate.