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Music Venue Properties: MVT’s Plan To Purchase Venue Freeholds
The UK’s Music Venue Trust (MVT) has launched a scheme designed to increase ownership of properties amongst the operators of grassroots music venues (GMV).
The scheme is called Music Venue Properties (MVP), a so-called Charitable Community Benefit Society (CCBS), which differs from a regular charity in that it can raise money trough community shares available to fans and investors alike.
The money is being raised through dedicated crowdfunding pages. MVP will use the money to purchase freehold property, and thereby own the real estate on which GMVs stand. Purchasers of shares, fans and investors alike, will receive a 3% annual percentage rate.
According to MVT data, the issue of ownership underpins almost every other challenge that GMVs have faced during the last twenty years including gentrification, noise complaints, under-investment, poor economic models, and an inability to plan for the future.
Over 35% of GMVs have closed in the last 20 years, and 93% of them are tenants with the typical operator only having 18 months left on their tenancy. Since the start of the COVID crisis the sector has acquired over £90 million ($112 million) of new debt, yet 67% of Culture Recovery Fund grant aid was paid directly to landlords.
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The MVP scheme put ownership back in the hands of the grassroots music sector. Nine venues listed below – six in England, one in Scotland, and two in Wales – are part of a pilot project that will allow the scheme to establish proof of concept.
The target is £3.5 million ($4.3 million) to purchase the freeholds for these nine venues before the end of 2022. By subscribing for shares issued by MVP in this share offer, investors will become a member of the society and a co-owner of the society and its assets.
Rues and other supporting documents are available on the MVP website musicvenueproperties.com.
According to the MVT, further venue freeholds will be identified and secured as and when they become available, and MVP will continue to raise funds through selling community shares and borrowing against the freeholds purchased. All rental income subsequently received from the purchase of venues will be reinvested towards the expansion of the portfolio.
On completion of purchase MVP will offer the majority of current operators an immediate rent reduction and help contribute to building repairs and insurance, while also guaranteeing long term security and market resistant rents.
Mark Davyd, CEO of Music Venue Trust, is confident that people are going to invest. “Our #SaveOurVenues campaign launched during the pandemic raised over £4.1 million with more than 80,000 people contributing. We already have the crowd – we just need to ask them to invest from May 23 and are confident they will,” he commented.
And Davyd continued, “This is the most ambitious initiative Music Venue Trust has ever undertaken. The long-term security and prosperity of grassroots music venues depends almost entirely on one thing – ownership. Too many have been at the mercy of some commercial landlords whose motivations revolve primarily around profit.
“We have lost over a third of our venues in the last 20 years and with over 90% having only 18 months left on their tenancies we are at the cliff edge and could see the decimation of our sector if we don’t do something radical about it. The Music Venue Properties scheme will allow ethical investors and music fans to invest in the future of live music while receiving a healthy return on their money.”
The Ferret, Preston
The Snug, Atherton
Le Pub, Newport
The Glad Café, Glasgow
The Hairy Dog, Derby
Sunbird, Darwen
The Polar Bear, Hull
The Palladium, Bideford
Bunkhouse, Swansea