The Mansion House Trust Advisory Committee is scheduled to meet to discuss a progress report and next steps for the Mansion House. The committee will also discuss the potential procurement of an operator for the Mansion House. Finally, the committee will agree on the date and time of the next meeting.

Mansion House

The committee will receive an update on the Mansion House¹ and discuss the next steps for its operation.

A report included in the Public Reports Pack prepared by the Business Development Manager states that a market engagement event was held to find an organisation to run the Mansion House. According to the report, Newcastle City Council received a proposal from Crafted Projects Ltd, who want to create:

• 19 rooms in the Main House
• A tearoom
• A spa
• A wellness centre
• A garden shop
• A summerhouse for weddings and events

The report notes that Crafted Projects Ltd has opened a similar venue in Morpeth called Pleased to Meet You, which consists of a restaurant, bar, tearoom, hotel and wedding venue.

The report states that traded business within the Mansion House has slowed down because of the market sounding exercise, and future bookings have been restricted. However, the council has started to take bookings again, as Crafted Projects Ltd has stated that they would honour any existing bookings.

The report recommends that the council go back out to market for an organisation (potentially Crafted Projects Ltd) to take over the operation of the Mansion House on a 6-9 month rent-free basis. The organisation would take over all operations, including honouring any existing bookings, running the webpage, and managing security. They would receive the income from all events and take over all running costs, including day-to-day repairs and maintenance. Milestones would be agreed for this period to allow both parties to step back from the arrangements if not viable. During this time, the organisation would be expected to put forward a firm business plan if they wished to continue. The council would also use this time to progress legal advice and see any required permissions from the Charity Commission².

The report states that for any potential future operating model, the council would need to secure a contribution towards the deficit.

The report also states that the procurement of an operator for the Mansion House must comply with the requirement to achieve Best Consideration in accordance with Section 123 of the Local Government Act 1972³. All submitted proposals must be duly considered. The procured operator will initially enter into a short-term agreement, either in the form of a Tenancy at Will or an Excluded Tenancy⁴. If, at the end of the exclusivity period, their business plan is deemed acceptable, a lease will be negotiated without the need to re-advertise the opportunity, subject to approval by the Charity Commission and any Planning and Licensing conditions.

The report states that the deficit on the balance sheet for the Mansion House is £1.2m, and that this increases on an annual basis as the running costs exceed the income generated. Current annual costs associated with the Mansion House total approximately £103,000.

The report states that advice received previously from Womble Bond Dickinson indicated that if the intention is to appoint an operator to generate commercial revenue for the charity through more commercial-related events, not necessarily charitable in nature, then the property essentially becomes a commercial property investment, rather than held for a specific charitable purpose. The council would therefore need to apply to the Charity Commission to re-write the objects of the charity to release it from its functionality and look to turn the charity into a grant-making charity instead, using the proceeds of any lease/commercial agreement to fund other charitable activity.

The report recommends that the Mansion House Trust Advisory Committee:

• Supports the proposal to seek legal advice from Charity Law Specialist (WBD) as to whether or not an application for a scheme is required to change the charitable objects and if so, that this is done on a flexible basis to allow either the proposals as detailed above or the option to dispose of the property.
• Supports the proposal to carry out a formal procurement exercise in line with the proposals above
• Agrees the duration of the exclusivity period for the initial operator.

Previous Minutes

The minutes of the previous meeting held on 18 December 2024 will be reviewed. At that meeting, Anthony Francis, Service Manager Financial Accounting, and Detlev Anderson from Kinnair Associates presented the Trustees report and financial statements for the Mansion House Trust Charity and the Mansion House Trust Trading Subsidiary.