Scarborough Council seeks to resolve 'unusually difficult and protracted' lease dispute with North Bay Railway

A report by the authority said that it is seeking to conclude negotiations that are “unusually difficult and protracted” regarding the North Bay Railway following a failure to complete new property leases.

While the “main heads of terms” have been agreed, the crux of the issues lies in the replacement of the carriages and their subsequent ownership at the end of the lease term, according to the council.

The council states that since taking possession of the site, the tenant has carried out “significant investment” at the properties and has been paying the agreed rents but the authority has “encountered difficulties in completing formal leases”.

In 2021 the North Bay Railway celebrated its 90th birthday and ownership of the company that runs the historic attraction was taken over by John Kerr and Peter Bryant.

A “disagreement” by the North Bay Railway about the proposed lease period, the handing back to the council of land by the neighbouring developer Benchmark Leisure Ltd, and “attempts by NBR to renegotiate the rent” have all contributed to the leases not completing, according to the report.

Additionally, staff changes at the council, a requirement to obtain consent from Yorkshire Water and a change in NBR ownership have also impacted the completion of the agreements.

The report prepared for Cllr Liz Colling, cabinet member for inclusive growth, recommends that she “note the current position in relation to the letting of the North Bay miniature railway and associated concessions”.

It adds that the completion of the legal agreements will take place after April 1 when Scarborough Council is abolished and as such “formal approval will be sought to enter into the leases of the properties from North Yorkshire Council”.

Scarborough Council has said it “obtained external legal advice” according to which it could take back possession of the property “at any time” leaving the tenant “unable to recover any investment”.

However, the report states that council officers are working with the new “enthusiastic” owners of NBR to rectify the position.

The owners have said they plan further investment and have requested a 35-year lease instead of the original agreement for 25 years to gain “more security to raise funds for investment”.

The new terms have been "provisionally agreed for both the miniature railway and the adjoining Skytrail concession” with an increased rent that will be "subject to inflationary increases”.

The report concludes that “the treatment of the carriages at the miniature railway which belong to the council” is yet to be resolved.

The matter will be finalised by the new North Yorkshire Council and Cllr Colling is asked to approve the report and note the progress of the negotiations on Tuesday March 21.