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Westway Development Trust: (1/6) "London property developer in nightclub swindle"

This research document will make little sense if you haven't read Brian Deer's Notting Hell from The Sunday Times of June 17 2001. In July 2002 the trust renamed itself Westway Development Trust. A Westway Development Trust index of materials is also available


THE WESTWAY DEVELOPMENT TRUST [PREVIOUSLY NORTH KENSINGTON AMENITY TRUST] AND SUBTERANIA - FIRST OF SIX PAGES

From 1988 until 1999, the Westway Development Trust, then known as the North Kensington Amenity Trust, unlawfully claimed more than £118,000 in business rates and public entertainment license fee exemptions from the Royal Borough of Kensington & Chelsea on behalf of a night-club. The losers were the local community and the exchequer. The beneficiary was Mr Vince Power of the Mean Fiddler entertainment group on whose behalf the charity claimed that the (wholly for-profit) club Subterania were charitable premises used mainly for charitable purposes. Deceptions were perpetrated by the charity against the council, proper requests for information rebuffed and, when challenged, the charity dissembled. It is clear that the charity knew what it was doing, but no satisfactory explanation has been forthcoming. Mr Power has done nothing wrong, merely availing himself of an opportunity any London night-club owner would envy.

(A) INTRODUCTION

Subterania is a well-known London night-club, leased since 1988 from the North Kensington Amenity Trust (NKAT, "the trust", Westway Development Trust), registered charity 262167, to Vince Power of the Mean Fiddler Group. The group's website describes the club as follows [S1]:

"Subterania in the last ten years has become one of West London's most prestigious venues. It has become the musical heartbeat of Notting Hill and regularly host some of the best international names on it's stage and is renowned in the club circuit as the venue to watch for new trends. Within Subterania you will find an intimate environment. There are two bars, one of which serves the balcony area overlooking the stage and dance floor below. Subterania is equipped with 'State of the Art' sound and lighting."

Evidence given for the trust at West London Magistrates Court on 23rd-24th October 2000, attended by Brian Deer for The Sunday Times, indicated that the club's capacity is 600, with a music and dancing license extending into the early hours of the morning. Paul Weller, Annie Lennox, Iced T are among past performers at the venue. After 11pm, admission was stated as £11. At the hearing, the trust, which for reasons unknown has remained the licensee on behalf of Mr Power, was attempting to overturn restrictions imposed by the local authority arising from residents' complaints about late night noise and disruption. The trust lost, with costs awarded against it on grounds of its unreasonableness, and lodged an appeal of the appeal to the Crown Court (withdrawn shortly before the scheduled hearing on February 21st 2001) and in so doing was able to defy the magistrate's order, the council and local residents for a few extra months.

A report of the council's licensing (hearings) committee dated 30th June 1991 [S2] shows that Subterania was in full flow as of that date at least:

"We considered an unopposed application by the Trustees of North Kensington Amenity Trust for an amendment to the existing extension of hours at Subterania, Acklam Road, W10 from 1.00am to 2.00am, Monday to Thursday, and from 2.00am to 3.00am Friday and Saturday."

One condition attached was that "Dancing shall not be permitted on the mezzanine floor."

Eight years later, after inquiries frustrated by the charity at every opportunity, a report by the director of environmental health of the Royal Borough of Kensington and Chelsea for a committee meeting on 11th March 1999 [S3] says evidence suggested that:

"Subterania was operated principally as a commercial night club by the organisation 'Mean Fiddler' and that NKAT - the licensee - had little to do with the premises on a day to day basis. It would seem that 15 charitable events were held at the premises in the period May to December 1998, seven of which were associated with the Portobello Film Festival in August. However, over the same period, Subterania operated as a commercial night club twice a week on Fridays and Saturdays - around 60 events in all. There was also evidence that the Mean Fiddler had advertised the fact that the premises were available for hire for parties."

Also:

"Officers in the Licensing Unit know from experience that Subterania operates at virtually full capacity two nights a week throughout the year. With typical attendance of the order of 600 persons per night, and an average ticket price of, say, £8, this would imply gate receipts alone of the order of £500,000. The receipts from the bar cannot be estimated with similar confidence, but it is likely that these are very substantial - quite possibly at least as great as the gate receipts."

Aside from the noise and disruption, Subterania has attracted local controversy. In allegations denied in the report by Mr Power, The Kensington News dated 9th March 1995 leads page 1 with the following [S4]:

"CLUB IS 'RACIST'

"We're being barred claims community

"Community leaders fear a violent backlash over a North Kensington club's 'racist' door policy... Steve Shervington, 33, turned away twice from the club, already has 100 signatures on a petition to be given to the trust."

See also reports of two recent shootings and other problems at the club. [S4].

(B) IN 1988 THE TRUST LEASED THE PREMISES TO VINCE POWER

The premises at 12 Acklam Road were originally constructed about 25 years ago, using loans from the Royal Borough of Kensington and Chelsea, as the Acklam Community Hall. Later it was redesignated as a club, Bay 63, still occupied and managed by the trust. The premises are a few hundred yards from the trust's offices at 1 Thorpe Close.

Declaring itself incapable of managing Bay 63, in 1988 the trust gave the premises, without advertising or competitive tender, to Mr Power for nine years (since renewed). On 30th March 1988, a lease was issued to Mr Power, drawn up by the trust's solicitors, Sinclair Taylor and Martin, a tenant of the trust at 9 Thorpe Close. The trust claims that this document is a "management agreement" or, alternatively a "management arrangement", claiming that Mr Power was not a tenant, but the trust's "promoter". This is wrong. This document [S5] is plainly a lease, with elements of a license, including (on page 1) the definitive expression "demised premises", plus a map and standard terms, such as clause 5.5:

"To paint the Club with two coats at least of good quality paint of a colour to be previously approved in writing by the Trust in the case of external and the last internal decoration and wash polish or otherwise treat as the case may be in a proper and workmanlike manner all the wood stone iron and other work in the Club previously or usually painted washed polished or otherwise treated as aforesaid as to the interior in every fifth year and as to the exterior in every third year of the term calculated from the date hereof and also in each case in the last month thereof (howsoever the same may be determined)"

Mr Power took this document to be a lease - and presumably he would know. In the published accounts for (Mr Power's) Subterania Ltd 1992, [S6] the company claims tangible assets as at July 1991 valued at £569,000. The following year, the accounts identify such assets under the heads "Land and buildings leasehold (short)" and "Fixtures fittings & equipment." The accounts for the following two years do likewise, depreciating the sums, after which accounts may not be available from Companies House. In a recorded interview with Brian Deer, Mr Power said that he had spent £330,000 upgrading the facility, including the construction of a balcony.

The trust's accountants identified the (nominal) income from Subterania as "rent", further exposing as a fiction the suggestion that Mr Power was managing the club on behalf of the charity. As in earlier years, the notes to the published annual report and accounts for the year ending 1994 [S7] - with the club confusingly still identified as "Bay 63" notwithstanding its earlier redesignation as Subterania - shows money received against the words "rental income". For reasons unknown, comparable information is not included in trust accounts for more recent years, obscuring the relationship from those who may wish to inspect the public record. No reference to Subterania, "Bay 63" or anything relating to them is included in recent annual reports and accounts - an important matter to be dealt with later in this document.

In a "confidential" internal trust memo dated 8th May 1997, [S8] which discusses extending the relationship with Mr Power to run a cocktail bar, the Ion Bar, next to Ladbroke Grove station, Roger Matland describes the Mean Fiddler organisation as "Well known to the Trust as tenant/managers of Subterania". (The "confidential" trust document discussing the assigning of Subterania to Power is also attached at [S8])

Further evidence that the relationship was arms length landlord and tenant and not a management agreement or arrangement is that the trust had no access to basic business information about the club's operations. On 7th October 1998, the council's environmental services department wrote to the trust [S30]:

"If the North Kensington Amenity Trust intend to apply for a reduction in the licence fee, please submit documentary evidence relating to the income, expense and profit/loss for Subterania."

Matland replied for the trust on 16th October 1998 declining this request [S31]:

"We have no knowledge of their profits and losses and it would be far too invasive of the Trust to now try and demand such information."


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