A derelict pub is set to be brought back to life after locals in a Norfolk village announced plans to kick-start raising investment using Social Investment Tax Relief (SITR).
The Swan in Gressenhall, which has been closed for over 20 months, needs to raise £230,000 to help it complete the purchase, refurbishment and provide working capital and the Community Benefit Society (Gressenhall Community Enterprise) behind the scheme has decided to give ‘people power’ a chance.
Individuals living nearby or those that have an historical association to the site will be able to buy shares in its future. Their investment is eligible for SITR, which offers the organisation a low rate of interest, whilst giving investors up to 30% back in tax relief.
In a strange twist of fate, Alex Begg, one of the people leading the campaign, was actually instrumental in work completed around raising awareness of Social Investment Tax Relief when he competed a 9-month ‘OnPurpose’ placement at Big Society Capital in 2018.
“Gressenhall needs a community local that serves great beers, good reasonably priced, home-cooked food and can act as a meeting place/hub for all the various interest groups we have in the village,” explained Alex.
“In the last few weeks we have agreed, in principle and subject to a survey, a price to purchase the building and this is a major step forward.
“£350,000 would acquire the building, complete internal developments and give us enough money to get going and we believe we can achieve this through social investment loans and a share raise of £230,000. It’s ambitious but I believe we can do it.”
He continued: “I am perhaps one of too few people who know a reasonable amount about SITR and am keen to make its benefits understood to prospective members of our Community Benefit Society as well as others trying to achieve similar aims.
“It is a great way of raising a significant amount of money with borrowing rates that are much more attractive than traditional lending.
“Equally important for a project with the community at its heart, is the chance for people, who have a vested interest in its success, to get financially involved and enjoy some great tax incentives in the process.”
The Swan is hoping to start the SITR raise in late August and the campaign will last for two months, with shares starting at £50.
If successful, an extensive ‘zero carbon’ refurbishment will take place over nine months to create a ‘local pub’ feel, with the plan to open seven days per week and serve a mixture of ales and food from produce sourced via nearby farms.
Four jobs will be created and a number of volunteer positions opened up to support the first few months of trading and to help co-run the café offer and keep the garden and outdoors looking beautiful. Special themed evenings, quizzes and other fundraising events will also be held.
“93% of responders rate the need for a pub as important or very important, with 160 people replying that they would use it at least once a week…that’s very promising,” added Alex.
“We’ve tried to bring the concept to life through virtual reality, so that people can put on a VR headset and, via an immersive 3D experience, see what The Swan could look like when complete. It’s a fantastic marketing technique and one that is generating a lot of interest.”
Melanie Mills, Senior Director at Big Society Capital, commented: “Local pubs have always been at the very heart of our communities and we are losing too many. Conversation, camaraderie, care and community are essential facilities every place requires.
“The Swan at Gressenhall has a big groundswell of support and hopefully SITR will give it a vehicle to raise the necessary finance that makes the dream possible.”
Big Society Capital is running a concerted campaign to ensure the Government does not let Social Investment Tax Relief come to an end in April 2021.
It is encouraging MPs to get behind its bid to increase accessibility to SITR investment for a further two years as part of an amendment to the Financial Bill that is currently passing through parliament.
To date, more than 76 organisations have successfully been able to secure over £14m using SITR, but with more investors coming forward and the threshold of £1.5m for each raise, there could be a larger pool of finance to tap into.