Arun councillors have supported the idea of spending almost £8 million converting the upper floors of the Bognor Regis Arcade into flats.
The council bought the arcade in 2017 for investment and regeneration but, while new life has been brought to the shops on the ground floor, the rest of the building has remained derelict and largely unused.
During a meeting of the economy committee on Tuesday (June 13) members supported the idea of borrowing £7,362,747 to pay for the work to build 35 rented flats.
A bid for a grant from the government’s Brown Field Land Release Fund has already been made in the hope of securing the remaining £628,322.
Other options explored by officers were to sell the whole arcade – but it was felt unlikely that the council would recoup the £1.9m paid for the building.
Developing it for social housing was also given the thumbs-down as the housing team advised officers that such a scheme would not be able to provide the housing types needed.
Leaving the upper floors derelict was the final option and would lead to high maintenance costs as well as denting the council’s reputation for leaving such an asset in a poor state of repair.
Dr James Walsh (Lib Dem, Brookfield) said the council had been ‘saddled with a millstone around its neck’ when it bought the arcade.
But he acknowledged that doing nothing with the site was not an option and said they had to ‘get to grips with what was a wrong decision and find a way out of it’.
His concerns were understandable.
A report to the committee said borrowing the money to build the flats would cost the council more than £420,000 per year.
Even after taking account of an estimated £362,000 in rental income, there would still be a deficit of £28,646 per year to be found.
Explaining why building the flats was the best thing to do, regeneration consultant Neil Taylor told the meeting that the council was paying more than £29,000 per year in rates for the upper floors as well as ongoing maintenance costs.
And there was a £180,000 budget for roof repairs which had yet to be spent.
Mr Taylor added that the building ‘doesn’t look great’.
He said: “It’s a main gateway between the seaside and the town and it looks a bit grim. It’s full of pigeons – we keep trying to keep them out but of course they will get in.
“One you look above the vibrant retail on the ground floor it looks quite grim.”
The committee’s recommendations will be put to the next meeting of the policy & finance committee before going to full council for final approval.
Planning permission will be needed before any work can be carried out.
