Rates, BID levy and Crossrail are killing electronics shops, not the internet

Front of electronic shop.

Passing trade. Tourists don't buy components via the internet and they are a vital source of business for Tottenham Court Road's electronic shops. But Crossrail works are an obstacle to business.

The electronic retailers at the southern end of Tottenham Court Road complain their businesses are suffering not from competition from online sales but by a combination of high business rates and the Crossrail works. And the InMidtown business improvement district which is taking thousands of pounds in a mandatory levy on the traders is giving nothing in return or responding to their concerns.

Since October 2010 when the street between Charing Cross Road and Tottenham Court has been shut off, tourists and other West End visitors have been cut off from the electronic retailers and starving them of much-needed custom.

Mr Malik who owns MicroWorld says he has lost half his trade.

Road and construction site.

Crossrail construction site at Tottenham Court Road station have blocked the route for tourists coming from the West End say electronics traders.

“The Crossrail works have blocked the road so no tourists are coming up here from Leicester Square and other tourist parts of the West End,” he said. “They get to the top of Charing Cross road and just see a building site.”

Malik says these customers don’t buy over the internet because they are on holiday but they are looking for a variety of electronic and computer components to use while they are in London.

“I rely totally on tourists coming up from the West End and buying things like adapters for their electronic devices,” he says.

He has been trying for the last few years to get a reduction in his business rates from Camden Council because of the loss of trade due to Crossrail, but so far he has not succeeded.

Business rates are set by the government’s valuation office and are collected by the local authority. Businesses who think they are paying too much in rates can appeal to the valuation office.

He has two shops and pays around £140,000 in business rates for each shop. He is also liable to pay the levy of nearly £3,000 on each shop to the InMidtown Business Improvement District. But he says he is getting nothing in return from the InMidtown BID.

“All the Midtown people are doing is taking my money,” he says. And when he refused to pay his levy he got a visit from the bailiffs so he had no choice but to pay. “These people are robbing me,” he told Fitzrovia News.

Map of Midtown BID area.

The lower part of the east side of Tottenham Court Road is included in the InMidtown BID.

The Midtown BID charges 0.9% of rateable value on every business with a rateable value over £60,000. The BID was set up in April 2010 and will have to ballot its members in 2015 to continue. The Midtown BID promise a return on investment to its members and a number of cost-saving schemes. It is a private-public partnership with Camden Council.

We also visited other electronic retailers on the eastern side of Tottenham Court Road and they told us a similar story. All of them complained about the drop in the tourist trade since the Crossrail works. They complained about the high business rates that Camden Council are charging. Some of them had appealed unsuccessfully to the valuation office to get their rates reduced. They all said that they were getting nothing in return from their levy paid to the Midtown BID.

We put these criticisms to InMidtown. But instead of answering the concerns of their fee-paying members they issued a generic statement saying: “The role of BIDs in the UK is to provide a series of services which support the transformation of an area. BIDs across the UK are established through businesses within a given area voting for them. BIDs then deliver the vision to improve the area.”

After we received this response we contacted InMidtown again, through their public relations people, to ask if they could directly answer the criticisms. But we were told that InMidtown would not be making any further comment. It seems InMidtown are happy to take the money but not give anything in return or feel they have to explain themselves.

The response from Camden Council is of little comfort, either. A spokesperson said:

“The council collects business rates on behalf of central government and has to make up any shortfall in collection. Any reduction in business rates has to be funded locally by the council and would mean cutting the budget used to deliver services to residents and businesses.      

“Business improvement districts (BIDs) are business led organisations. The council works with the three BIDs operating in the borough to support local businesses and encourage them to make a positive contribution to the wider community.

“Inmidtown use their BID levy to deliver services to their business members. These services were developed following consultation with businesses in their area and set down in a proposal that was put to a ballot of businesses that are liable to pay the levy,” said the spokesperson.

Shop units under redevelopment.

Shop units on the western side of Tottenham Court Road are boarded up.

A row of shops on the western side of Tottenham Court Road closed earlier in the year when the landowner Derwent London starting doing refurbishment works. The whole row of shops is boarded up and that doesn’t make things look good say Malik and the other traders. The electronics traders all thought that when the new shop units re-open after refurbishment they will be expensive up-market shops opening just ahead of Crossrail opening.

One shop owner who also owns the freehold on his building said that trade is down 50 percent but when Crossrail starts running services in late 2018 he anticipates he will gain more customers. The other shop owners painted a grim picture saying they’d be out of business by 2018 if not before.

But Mr Malik and his staff at MicroWorld will not be around to see Crossrail. The owners of his building have announced that they will be redeveloping the site later this year. The existing building which includes the now empty Time Out offices is to be demolished under plans by developers Exemplar and Ashby Capital.

The main works at the eastern ticket hall at Tottenham Court Road are due to finish in late 2016 when the road will be open again. Camden Council are also due to open a public consultation in June this year about changing Tottenham Court Road into 2-way traffic and widening the pavements.

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