Tunbridge Wells Borough Council has given more details of the case for its £ 27 million project to update the Palm Court area of the Royal Victoria Place Shopping Centre ahead of a scrutiny meeting on Monday.
But concerns remain that the council will not get the returns it expects, creating a risk that council taxpayers will foot the bill.
The Palm Court changes will see the creation of a new enclosed basement area for “leisure” activities to replace the old food hall, while the atrium will be reduced to just the top two floors (see below).
The borrowing for Palm Court is just the first stage of the shopping centre revamp. It will be followed up by another loan of around £30 million which is due to be considered next year.
This second loan will finance new restaurants and a 3-screen “boutique cinema” as well as the demolition of buildings including the Victorian Friendly Societies’ Hall, which is now used by the snooker club.
The Palm Court scheme appears to have overwhelming support among the Liberal Democrats that control the Borough, but some opposition councillors think the council’s hopes of attracting an extra £1.8 million a year in new council revenue from the project are over optimistic.
There’s also concern that the major internal changes are being paid for with a loan paid back after 50 years, when many of of the fittings are likely to have a much shorter life.
The picture below shows the current glass roof:
The new glass roof and extra floor over the void will generate a new look to Palm Court:
Back in April, the Liberal Democrat Deputy Leader of the Council, Justine Rutland, gave an interview to Southborough News in which she said: “Onward investment in the shopping centre is really crucial to make sure that it keeps delivering…and we make the town a better place to live.”
Southborough News has now spoken to James Tansley. He was a founding member of the Tunbridge Wells Alliance Party which successfully fought a campaign to oppose the Conservative’s £100 million Calverley Square theatre and offices project.
James Tansley said of the Liberal Democrat’s new Palm Court investment scheme: “It’s a dog’s breakfast of a plan. The whole business case needs robust independent scrutiny.”
James Tansley continued: “I think it is based on some very optimistic assumptions. Revenue from the project is unlikely to cover the costs, so it will not be self-financing and council taxpayers will almost certainly need to contribute. We should have been told that.”
Before the Calverley Square project, James Tansley had served as a Conservative Kent County Councillor.
The empty basement floor space to be rented out for new income appears to be only around 10% of the RVP’s total area^ – yet the council says its plans will boost RVP rental income by 30%. Critics say the council is being over optimistic.
Boosting RVP’s current rental income by 10% would only bring in around £400,000, while the council is counting on generating £1.2 million a year in extra RVP rents – just from the Palm Court improvements.
The total extra annual revenue expected by the council is £ 1.8 million after also adding in higher parking income and higher business rates paid by the new shops. That compares with an estimated £ 11 million total revenue currently for Borough-wide business rates income, car park revenue and RVP rental income. So the council is expecting a major boost of around 16% in those receipts.
The council’s planning committee approved the Palm Court plans in June, but another chance for scrutiny is this Monday 5th October when the Finance, Innovation and Transformation Cabinet Advisory Board meets giving residents an opportunity to ask key questions.
This is the link to watch the meeting at 6.30pm:
https://democracy.tunbridgewells.gov.uk/ieListDocuments.aspx?CId=455&MId=6076&Ver=4
The final go ahead is set be approved by a full council vote on 11th November.
A plan of the new basement is shown below:
Although on a visit this weekend, most of the retail units on both floors seemed full already, the council is promising that: “The retail space will also be improved, with larger, modern units designed to attract the kinds of brands people want to see in the town centre.”
Upper level plan after improvements:
The council says:
* At the upper level, there will be better facilities, including improved access and new toilets, to make the space more comfortable and inclusive for everyone.
* The atrium itself will be redesigned to make it easier to move around and to create a brighter, more attractive atmosphere. This will include better lighting, new flooring, updated finishes, and glass railings.
* The old basement food court will be turned into a new leisure area, with a direct link to Ely Court and potential space for community activities.
First floor plan after improvements:
The council is asking for an additional gross capital budget of £ 23.3 million, in addition to the £ 3.3 million approved in July 2025.
The council says that it wants to take out a government loan to fund it by borrowing over 50 years, creating a bill of £ 1.5 million a year in interest and repayments, assuming a 6% interest rate.
But the council believes returns from the investment will make it self-funding. Indeed it is forecasting £ 1.8 million of increased revenue per year, giving it a £ 315,000 profit every year.
This is a breakdown of the £ 1.8 million increased annual revenue the council is banking on:
| Appraisal base position Net Operating Income pa Development means that the council will no longer be paying business rates (half of which goes to central govt) on the vacant units in the food court or paying money to clean the empty shops so filling the shops will bring this benefit. | £ 188,000 |
| Net Operating Income Post Development increase pa Extra shopping centre rental income in Palm Court area from improvements per year | £ 1,141,346 |
| Wider Economic Revenue increase pa Council Parking and business rate revenue should increase | £ 402,900 |
| Additional income from retained shopping centre | £ 34,406 |
| Fixed Rental Uplifts within existing lease arrangements | £ 25,392 |
| TOTAL Council additional revenue per year | £ 1,792,044 |
Southborough News also asked why the council will only pay back the loan after 50 years. If elements of the rebuild have a life of less than 50 years, the borrowing would normally be over a shorter period – maybe 30 years – with a resulting higher annual repayment cost.
The deputy leader of the Council, Justine Rutland, gave this explanation:
The proposal is not a complete rebuild. A key aspect of the scheme is the retention of as much of the existing structure as possible, reducing both cost and carbon impact. The project focuses on refurbishment, remodelling and the addition of a new roof structure to create high-quality space that can remain in use for many decades.
The suggestion that modern buildings typically require replacement after 30 years does not reflect standard industry expectations. Well-designed and properly maintained commercial buildings can remain in use for 60 to 100 years or more. As with any asset, their long-term viability depends on ongoing investment and maintenance rather than wholesale replacement after a fixed period.
The financing model reflects the anticipated long-term life of the asset and is consistent with the Council’s approach to managing major investments. As set out in the appraisal report in the Exempt Appendix A, the loan repayment profile is aligned to the long-term performance of the asset. Any future redevelopment proposals would take account of both the value of the asset and any outstanding borrowing at that time.
Our focus is on bringing a long-vacant part of Royal Victoria Place back into productive use, creating new opportunities for businesses, attracting more visitors into the town centre and strengthening the long-term future of this important asset for residents and taxpayers.
According to an interpretation of official International Financial Reporting Standards, a retail shopping centre cannot simply be depreciated over 50 years as a lump sum but must be unbundled into major segments based on their economic lifespans, according to the following categories:
Parking Lots & Land Improvements: Depreciated over 15 to 20 years
Building Shell & Structure: Depreciated over 30 to 50 years
Building Systems (HVAC, Elevators, Electrical, Plumbing): These degrade faster and are depreciated over 15 to 25 years.
Fixtures and Finishes (Carpeting, Atrium Decor, Mall Signage): Depreciated over shorter cycles, often 5 to 10 years.
^ The council says the new leisure focused basement is 22,000 square feet, compared with the reported shopping centre total rentable space of 300,000 square feet. Plus a couple of shops on the higher floors of the Palm Court area are currently also empty.
