Aberdeen food hall Resident X was lent more than £1m to open in Marischal Square – and council chiefs won’t say how much has been repaid.
The P&J has been pressing the local authority, head tenant at the £107m Broad Street complex, for answers for more than four weeks.
The neon-adorned two-storey venue occupies 10,000 sq ft of Marischal Square.
Giving The Press and Journal an exclusive first-look at their new place last December, then-directors David Griffiths and Michael Robertson said the Instagram-friendly fit out had cost £1.3 million.
The P&J first asked questions about the loan for what the city council on Friday described as the “failed” business on September 19.
It took more than a month to get answers, with the local authority issuing them amid the Storm Babet chaos.
Resident X: The £1.3m Aberdeen food hall
Resident X opened with space for four street food vendors – including another of Griffiths’ and Robertson’s businesses – and two cocktail bars.
Their Aberdam brand took one of the spots in their new-age venue, along with chicken shop Pluck, curry house Baby Jewel and Greek restaurant Acropolis.
Having previously looked at a similar venture built out of shipping containers, and running the popular Backyard Beach Collective during the Covid pandemic, the pair opened over the festive period.
But they surrendered the lease at the end of August – and a new tenant was found.
The Croft Aberdeen Ltd, run by Ryan Clark and Andy Eager, has taken over.
The pair have worked together at the Croft and Cairns in Stockethill.
And Mr Clark’s family also run other north-east venues including the Scottish Embassy, the Atrium (formerly Howie’s in Chapel Street), the Old King’s Highway in Aberdeen and the Wig and the Queen’s Hotel in Stonehaven.
Once the lease was surrendered, the Resident X company was taken over by Fife businessman Neville Taylor.
But his Aguia Group has nothing to do with the running of the Resident X venue in Aberdeen.
Council chiefs tight-lipped on Resident X funding
Meanwhile, Aberdeen City Council has delayed making any statement on the loan for more than a month.
Councillors are understood to have waited just as long – and were briefed early on Friday morning just before the statement was published.
City property chiefs’ preoccupation with the “crumbly” RAAC concrete crisis has been blamed for the wait.
Marischal Square cost £107m to build as part of Aberdeen City Council’s regeneration of the east end of the city centre.
The Press and Journal was among the first tenants, with DC Thomson occupying the entire fifth floor of Marischal Square 1.
Various deal sweeteners have been offered to get tenants in the door.
And the city fronted more than £1m to help Resident X to set up shop.
A loan was first agreed in May 2022. The headline figure was increased later last year as construction costs soared.
Aberdeen City Council could have taken over Resident X development if owners went bust
A freedom of information response from the local authority first confirmed that the council had loaned them the cash.
Aberdeen taxpayers even paid for the consultant architect to design the electric food hall.
And the local authority loaned its tenants the money to fit out the units, expecting to be paid back over the course of the lease.
Throughout the fit out, Resident X had to prove with invoices that the money they were borrowing from the council was being spent on the food hall.
And the local authority had step in rights on the deal too, meaning the city could take over Resident X, if the owners went out of business.
Resident X: Pre-opening balance sheet would leave owners ‘struggling’ to access bank funding
Accounts lodged with Companies House showed Resident X was valued at £100 in August 2022, before it began trading.
But it had assets on its balance sheet worth £294,000.
Meanwhile, the company had £18,000 in its bank account with another £44,500 due from debtors.
But Resident X was due to pay out a huge £391,000 in the coming 12 months.
That means the £100 company was £34,387 in the red.
Balance sheets are a snapshot in time – and this picture was taken before Resident X opened its doors.
The construction was marred with similar issues to many other big-money projects, with shortage of supplies caused by the pandemic and global events.
But – as one banking source puts it – Resident X would have “struggled” to secure a bank loan for their Marischal Square venture with their negative equity.
Aberdeen City Council finally breaks silence on Resident X loan
Finally, after four weeks of pressure, an Aberdeen City Council spokeswoman fronted up to The P&J’s questions.
Her statement followed a far more explicit, confidential, briefing going to councillors.
She said that Resident X had been given a “hybrid option” of free rent, along with a loan from Marischal Square developer Aviva, to set up shop.
Earlier freedom of information responses made by Aberdeen City Council detail the local authority as the lender.
The spokeswoman added: “Unfortunately the business model for Resident X failed.
“This was identified through discussions with council officers over the trading period, and reflected a number of challenges to the operation, particularly around rising construction and energy costs between February and June 2022.
“The original lease was for 15 years. The rent level is commercially sensitive.
“A new lease is in place with a new tenant. The rental level reflects current market conditions.”
She refused to add anything more on the new lease, including whether or not the agreement with Aguia Group includes repayments of the set up loan.
The council statement comes on opening day of the new venture of the Resident X founders, David Griffiths and Michael Robertson, at Shot ‘n’ Roll in the Trinity Centre.