Lynton and Barnstaple - Operations and Development

I agree. But choices have consequences, and in this case, those consequences include significant ongoing constraints on the ability of the Trust to pursue its objects.

That trade-off hasn’t been openly acknowledged, and nor have the associated risks to the sustainability of that heritage.

the worst case is that the pub fails, and the railway loses control of the heritage. Not because of extreme circumstances, but because of how the transactions were set up.

 

Overpayment is also where someone pays significantly more than anyone else might pay. In an auction its rival bid+£1, any more is folly. Were there any other parties seriously interested in buying OSHI? What were they offering?

I understood that whilst the previous owner was not an 'over my dead body' type, he didn't really want to sell his business that he'd worked hard for many years to establish.
The railway could have waited. The business might have gone under, or, in time, the owner might decide that he'd like to retire to count his blessings(but likely not his millions).
As it was, the L&B had established a running line elsewhere, terminating about 3 1/2 miles and several unfriendly landowners away. At current rate of progress, Blackmoor station is about 50 years away, in which case waiting would not have hurt.
It is somewhat likely that the existing business would have failed. If it is such a good business, why is it being propped up by the trust. If it is such a good business, why are the trust not able to run it sufficiently profitably to redeem its capital?
Over the years, I have seen several people buy an existing business (at least 4 pubs) when they had no experience in the field, and all failed. I've seen a few where they had some experience, but still failed (not 100% failure rate though).
The £million+ spent on the OSHI might have been much more effective spent elsewhere

 

That’s not the point.

The overpayment (and it is pretty clear that there was) is fine from the perspective of the Trust securing a heritage asset.

Purchasing a pub is fine for a business incorporated for that purpose, but as a business it isn’t sound to overpay for the assets required to operate.

The organisation which values the heritage asset, doesn’t own it. It obtained shares in a business which overpaid for an asset it needs in order to operate, thereby saddling itself with a debt it appears not to be able to pay from that operation. It is problematic for a charity to own a loss making subsidiary. It is even more difficult to be the main shareholder with many others in said business.

It would have been less convoluted and more secure for the Trust if it had acquired the freehold of the entire site and leased the pub operation to the LBBC. There would have been no shareholders in the freehold, the loans would have been quite proper and with the entity that would end up paying them anyway, and the business would not have been stuck having to fund the overpayment on the value.

 

At the time of purchase someone reported that Rightmove had around 40 North Devon pubs on the market, only one over £1m, and none of them are likely to have had a sitting tenant (the Trust renting the house). This purchase should have waited until the Shepherds wanted to retire and advertised it for sale. Then the Trust would have faced competition from potential pub owners. In order to satisfy those doubters that the land and buildings are worth the cost figure of £1.9m stated in the accounts they should be professionally valued and, if necessary the book value adjusted accordingly (as have the Trust's land and buildings). I would very much like to see the business plan for the purchase with an initial interest charge on the loans until they were paid off. Presumably the prospectus included something along those lines. I can only assumed they were badly advised, or desperate to buy it.

 

As I recall the initial price talked about was £1.2m for the whole site, maybe 12-18 months later that price jumped to £1.8m,on purchase the price was £1.9m with only a small piece of the land and the Trust purchasing an extra parcel of land for the new formation and station building for somewhere reportedly in the region of £50k, premium purchase or not, an increase in price of over 1 third and a reduction in the real estate size should be questionable, however, the deal was done and it is where it is so more importantly now is the structure set up between LBBC and LBRT and how would it affect the Trust should anything unfortunately happen to LBBC.

 

The more that I read about the OSI topic, the more that I feel we are going around in ever-decreasing circles. It appears to me that no one can reach any firm conclusions without access to all the information that the Trust and LBBC Boards have yet to make clear to their respective members and shareholders. All we can do really is to speculate on possible scenarios and in the meantime to urge for yet more 'openness' on a matter which clearly has to the potential to be of great concern to those interested in the future well-being of the L&BR renaiscance. Sadly I fear that we may all remain 'in the dark' for quite some while yet...

 

Sadly, as reported in the local news, Mr Shepard recently died (just before Christmas 2024) , now anyone who is following the story will have seen that he had applied for planning permission to build a stable/animal house on the bit of land he still owned which if it is correct may have interfered with the rebuilding of the railway anyway.

Like I say, I am not privy to what others are thinking right now, but my understanding was at the time that the Shepards wanted to build a new house on the bit of land they still owned near the pub.

Just what this means for the Pub and the railway is anyone's guess, to be honest, right now, if the Shapard family decide to sell that bit of land and it turns out that it was going to be part of the deal, then I would suggest that this needs to be made clear to all parties both the Family and the Trust.

Of course, this is not the end of the story; as there are still three other owners in or near the station building, which can affect what happens at the station itself. According to Zoopla, the total cost for these is around another 2 million pounds. The trouble is now that we have set a precedent on the value of property in the area, so it's not going to be any less than that