Frequently Asked Questions

We held an open meeting for any member of the public to attend and ask questions of the management team and board members of the organisations across Hastings Commons on Thursday 15^th February 2024.

The event was independently chaired by Steve Manwaring, Director HVA and was attended by more than 50 people.  A short presentation was delivered by Bob Thust, Finance & Investment Lead from Hastings Commons.  You can access the slides via this link and you may want to refer tour FAQs already on the website to provide further detail.

A wide range of questions were asked, and we have had further emails from attendees since.  We are working on gathering further and will be updating our website and FAQs as quickly as possible. In particular we intend to share more information on the following:

• Breaking down all our grant funding by fund and indicating the purpose of the funding, how that funding was applied for, how it was approved, how it was used, and the decision making and reporting processes for each. This will include the Trinity Triangle HAZ funding on which there were a number of requests for further detail.
• Providing an update on our impact and learning across Hastings Commons, and keeping that updated at regular intervals.
• Calculating and then showing clearly the current value of the founder shares in Hastings Commons Neighbourhood Ventures and clarifying the likely pathway and timing towards ‘steady state’ based on the latest information available i.e. when shares will be transferred in full to Hastings Commons CLT.
• Clear information on all opportunities for members of the community to attend meetings, input their views and ask questions -generally or on specific areas of work

In order to ensure all information is clear, correct and complies with our legal responsibilities we will ensure we have reviewed this with the company directors and board to the CLT as well as, where necessary, independent advisors.

Since 2014, Hastings Commons has brought over 8,000 square metres of floor space into custodian ownership across a whole cluster of difficult and derelict buildings in the centre of Hastings, renovating them to a high quality, offering genuinely affordable rents, and supporting residents and businesses to collaborate and take more control of where they live and work.

But the vision is much bigger than owning and managing buildings. It’s really about the people in the buildings, how they live, work and play together. It serves as a beacon marking a different approach to development, for the community, by the community.

• Find out more about what Hastings Commons does and our story
• Find out more about Who We Are, including further information on our governance & structure

There are lots of different ways you can get involved in Hastings Commons: our community of commoners are central to the vision. Become a tenant, hire a space, become a member of the Community Land Trust or volunteer to support our work. Recruitment for volunteers, trustees and staff is advertised on our Getting Involved page.

At the moment we manage 11 rent-capped buildings, 50+ workspaces and have over 120 tenants.

Most of the properties (Rock House, Observer Building, Eagle House, Harper’s Caves) are owned by Hastings Commons Neighbourhood Ventures Ltd. This is a company with three equal shareholders - Jericho Road Solutions (JRS), Meanwhile Space CIC (MWS), and Hastings Commons Community Land Trust (the CLT).

Hastings Commons Community Land Trust owns the freehold of 39 Cambridge Road and holds a 125 year lease on 12 Claremont from East Sussex County Council.

Rose Cottage is owned freehold by Jericho Road Solutions but is managed as part of the Hastings Commons, using the same tenant selection criteria for the two artists’ studios. The classroom at Rose Cottage is leased by Leisure & Learning who hire it out for use by local groups.

• Learn more about our buildings

Including private funds and loans, as well as capital grants received, the total investment in our buildings since 2014 totals £12.79 million.  The current value of those assets based on our draft accounts for 31 March 2024 is £6.61m, a deficit of £6.18m.  This is nearly all a result of the Observer Building, owned by HCNV.

The current value of the Observer Building is based on independent valuations by professional valuers.  The process they go through helps determine the value based on current market conditions, and current uses.  It is not unusual to have significant deficits on revaluation for proprieties like the Observer Building.

• The purpose of HCNV and of the grant funding and private investment and has never been to maximise market value, but instead to maximise long-term community value. This often reduces the value of an asset on the open market. The result is to reduce the overall asset value in HCNV and therefore the share price ahead of the purchase of shares by the CLT from the founder investors.  You can find out more about HCNV shareholders’ agreement and share transfer here.
• Difficult, derelict, heritage buildings like the Observer Building often take significantly more investment than they create in financial market value - referred to as a ‘heritage deficit’. For example, repairing the façade to its original glory was very important to us and to our funders, but does little to add market value.
• Hastings Commons bought the Observer Building in 2021 without the funds in place to restore and redevelop it.  It has taken time to secure the necessary funds, often awarded with challenging conditions and timescales, meaning we have had to stop and start development at various stages.  Combined with the cost of living crisis, interest rate rises, energy crisis, COVID and Brexit over this period the final costs of development have been much higher than if we had all the funding in place from the start.  However, we believe that taking the risk to purchase the Observer Building when we had the opportunity was essential to meet our long-term, ambitious goals.

It is also important to note that we are still part way through full renovation of the Observer Building, 12 Claremont and Eagle House.  Valuing properties that are not yet complete is difficult and can often result in valuations that do not reflect the likely final value of the building. When all renovations are complete, we will commission a new set of full, independent valuations.

• See here for a detaiIed breakdown of our investment into each building and its current valuation

The members of the Hastings Commons board must strive to avoid any conflict of interest between the interests of Hastings Commons as a whole on the one hand, and any personal, professional, and business interests on the other. This includes avoiding actual significant conflicts of interest as well as managing the perception of conflicts of interest.

It is important to note that multiple overlapping interests have been key to the creation of Hastings Commons to date. So-called ‘conflicts’ need not be problematic, but must be acknowledged, carefully managed and published in each entity’s annual accounts.

A Memorandum of Understanding sets out the role of each collaborating organisation, how potential conflicts of interests are managed, and the approach to transactions between Hastings Commons entities.

The accounts of every Hastings Commons entity are either audited or independently reviewed by external accountants every year, with accounts made publicly available.

We also publish our annual report every year; which includes financial, governance and impact information.

Twice a year we hold open, public Q&A sessions with the answers to key questions posted on our FAQs page.

We hold an Annual General Meeting for the members of the CLT to review and approve accounts, go through the annual report, vote for CLT trustees and answer any questions that members may have.

For all the grant funds we receive we must abide by the strict terms and conditions of each grant. For nearly all grants this includes:

• Detailed due diligence carried out by the funder prior to making an award on our governance, financial policies and procedures, financial history and forecasts, and impact.
• Evidence of spend in accordance with the grant agreement and purpose, including providing both invoices and evidence of payment.
• Evidence of outputs and outcomes in accordance with the grant agreement and purpose.

The published accounts for the year ended 31 March 2023 for each entity can be found in the table below alongside the independent accountants that carry out annual audits and independent reviews.  Just click on the name to download the links direct from the government's Companies House website (for HCNV, Living Rents and Leisure & Learning) or from the Financial Conduct Authority (for the CLT).

The accounts for the year ended 31 March 20924 are still being audited or independently reviewed. We expect to update with links to the 31 March 2024 accounts before 31 December 2024.

Hastings Commons CLT Ltd (CLT) and Leisure & Learning Limited (L&L) are charities operated purely for public benefit.

The social enterprise property development company Hastings Commons Neighbourhood Ventures Ltd (HCNV) is a limited company and its articles ensure that the work of HCNV is aligned with the charitable objectives of the CLT with an ‘asset lock’ to ensure funds are used for those purposes.  Living Rents is 100% owned by HCNV and so bound by those same terms.

HCNV was established in 2014 by Meanwhile Space CIC and Jericho Road Solutions Ltd, two socially-driven entrepreneurs. They immediately granted 10% of the shares in the company to local community organisation White Rock Trust.  After WRT collapsed in 2016-17, our funder Power to Change supported a transition of the shares to Heart of Hastings CLT (which is now Hastings Commons CLT Ltd) and equalised the shareholding with investment into Rock House so each partner held 1/3 of the company.

The plan has always been that the risk-taking organisation (HCNV) will eventually reach ‘steady state’ where the buildings are earning enough to sustain themselves and at that point the CLT would buy all the shares from the founder investors so bringing the company and all its assets into 100% ownership by the CLT.

This is a deliberately new approach to achieving neighbourhood change for community benefit and is part of why Hastings Commons has been successful because it has allowed us to take risks that few charitable organisations would have taken alone.  For example, just prior to signing the shareholder’s agreement and equalising the shareholdings with the CLT the founder investors had built up significant value of more than £1.6m through the development of Rock House.  They decided to mortgage Rock House to fund the purchase of the Observer Building, putting that value at risk in furtherance of the mission and purpose of HCNV.

A specific formula in the HCNV Shareholders’ Agreement determines the timing, conditions and price at which the CLT would purchase the shares from the two founding investors and ensures:

• The price is based on assets that are valued in accordance with the social mission i.e. not on private market value, but on assumption the use is for community purpose and to provide affordable and capped rent residential and workspace.
• The contribution of charitable grant funding to any increase in asset values is taken off the price
• Any liabilities or debts of HCNV are taken off the price
• That it is affordable for the CLT to purchase even with debt, with no more than 50% debt on the total portfolio of assets, including both outstanding debt and any new debt taken out by the CLT to acquire the shares
• A fair return for founding investors. Eventually it is anticipated that the value will at least match the original input of the founder investors in cash and time while having created a strong, sustainable and relatively low-risk asset for the CLT.

Since 2014 up to 31 March 2024 the two founding investors have invested cash at today’s prices (i.e. adjusted for inflation) of over £400k and contributed over 1,380 unpaid days (an average of 138 days per year combined, assuming 7 hour days).  As of 31 March 2024 the price of the shares and return they would receive would be zero in accordance with the formula in the Shareholder’s Agreement. However, the transfer will not take place until up to 5 years after ‘steady state’ is achieved in order to provide fair opportunity for founding investors to earn a fair return, or July 2030 being the ten year anniversary of the agreement (whichever is earlier). Any return or repayment of the initial investment remains at significant risk.

Had we sought equivalent investment from alternative sources, e.g. banks, social investors they would have required less risk, formal charge on buildings as security and regular returns from the start.  We would not have been able to provide this, so it would have been too expensive and impossible to raise alternative finance of this type.

• Read more about the Shareholders’ Agreement and how it works here

No dividends have been drawn so far.

The shareholders do not charge for their time as directors of the business. At various points they have charged for specific pieces of work such as developing funding bids, preparing feasibility studies for particular projects, or providing project management, beyond the remit of company director duties. Such payments have always been agreed by the relevant boards and subject to detailed scrutiny in line with our financial oversight and management policies.

Jess Steele, the sole owner of Jericho Road Solutions Ltd has been paid a salary as the CEO of Hastings Commons since July 2022.

As of 31 March 2024, together Meanwhile Space CIC and Jericho Road Solutions Ltd have invested over £400k of cash and contributed over 1,380 days (an average of 138 days per year combined, assuming 7 hour days).  These unpaid hours do not include hours charged through any consultancy or employment arrangements described above.

Our published accounts for each entity include notes outlining all ‘related party’ transactions and these include any transaction with Directors or Shareholders of any of the entities.  The CLT accounts in particular provide a summary of all the related party transactions across all Commons entities and any other connected parties.  You can download the CLT accounts for each year – they have been published here.