Rating Manual section 6 part 3: valuation of all property classes

Section 930: skating rinks and skateboard parks

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This instruction applies to all Skating Rinks and Skateboard Parks.

Ice rinks that form part of a larger multi-use property should be valued in accordance with the instructions that apply to that particular class of property.

2. List Description and Special Category Code

List Description: Skating Rink and Premises (to include Ice or Roller) Skateboard Park and Premises, Scat Code 140 for Ice Skating Rinks - Suffix S Scat Code 239 for Roller Skating Rinks and Skateboard Parks - Suffix G

2.1 Ice skating rinks

Ice skating rinks were first developed in this country in the 1920s, and many more were built in the inter-war period. Most are purpose built.

The size of the actual ice pad tends to be fairly constant - the ideal for a national or regional rink being about 1800m2. Competitive rinks have a minimum specification of 56m x 26m (1456m2) and many modern rinks have been built to meet this criterion. In the early 1990s several new developments have moved away from traditional rinks aimed at serious skaters towards “leisure” rinks, possibly on two or more levels, aimed at a broader leisure market.

Throughout the late 1980s, and increasingly in the recessionary early 1990s, ice skating operators sought to diversify and add to the basic income from admissions and skate hire. Increasing emphasis is put on receipts from the bar, cafe/fast food restaurant, equipment shops, and other ancillary areas. New purpose built rinks are designed to maximise revenue from such sources. This may not be possible in some of the older rinks where there is limited scope to carry out the necessary refurbishment or extension.

In addition to increased emphasis on ancillary sales, operators are also trying to widen the appeal of the rink itself. The trend towards leisure rinks is matched by increasing marketing focus on specific activities. For example, many rinks now run discos, junior discos, children’s hours, and ice shows in addition to the more traditional open skating, galas and lessons.

Some operators have recently introduced “Taster Sessions” to attract the younger generation to participate in ice skating, with the lure of accessing places in “Skating Academies”. And many ice rinks now offer “Penguin Clubs” which are specifically aimed at the very young where they are supported by a rigid model of a penguin which gives them support to get around the ice without falling over.

Ice Hockey has also increased in popularity since the mid-1970s. In 1974 there were 14 ice hockey clubs registered as members of the British Ice Hockey Association. By 1985 this had risen to 37 and in 1994 there were about 60 rinks running clubs, each club fielding about 5 teams. Many ice rink operators do not charge the clubs as such but make their money from admission receipts for matches, together with ancillary sales, which can be a major source of income.

Ice rinks are increasingly promoting themselves as venues for events such as ice shows, concerts, exhibitions and conferences. The ability of a rink to obtain such additional income will depend on its being able to conform with planning and fire officer requirements, its seating capacity and the extent and proximity of the competition.

The traditional construction of the ice pad of an ice skating rink is a sand base with a thick layer of ice that requires three compressors running full time to maintain the requisite temperature. When the property is to be used as a venue for an alternative use the ice pad would be protected by timber staging. Modern technology has led to the development of an ice pad that has a concrete base with a much thinner skim of ice. In these instances if the property is to be used as a venue for an alternative use it is relatively easy to thaw the ice and utilise the concrete base.

The popularity of skating appears to vary not only with the general economic climate, but also with the amount of exposure of the sport on television. British success in the winter Olympics and other well publicised competitions boosts admissions.

The recession in the early 1990s was a difficult era for ice-skating due to the need to adapt to a declining demand and rising expenses. Subsequently there are signs that the industry may have stabilised. The increase in various other leisure developments and activities may continue to affect the number of sustainable ice-skating venues by providing a greater range of alternative leisure activities.

Most national indoor arenas also have the capability to be used as an ice rink but have a much greater spectator seating capacity than the majority of stand alone ice rinks, and major ice hockey teams use these. There are also ice arenas used for concerts throughout the year. Values between these two types of property need to be co-ordinated where their physical characteristics are similar.

2.2 Roller skating rinks

Although most organised roller skating takes place within leisure centres there are a small number of properties that are dedicated wholly or mainly to roller-skating.

Modern purpose built international roller-skating rinks were built in the early 1990s and externally resembled modern industrial units (as do many modern purpose built leisure properties). Internally, in addition to the 25m x 50m maple skating floor with spectator seating, these properties had ancillary bars, fast food restaurant, shop and quasar room.

Older roller skating rinks tend to be located in former industrial or warehouse buildings that have been converted to a greater or lesser degree. It is unlikely that such conversions will include the range of ancillary activities found in a modern purpose built rink.

The roller skating rink market was largely developed in the 1980s when operators favoured existing industrial units that could be converted to roller rinks with minimal alterations. The popularity of this activity was often short lived as closures and bankruptcy regularly occurred in the early to mid-1990s. Some rinks have successfully diversified into other leisure uses, but others have suffered due to the development of small roller rinks as part of larger mixed leisure centres.

2.3 Skateboard parks

Skateboarding was introduced from the United States of America and was briefly very popular in the 1970s. Since then interest has declined considerably. Although some purpose built skateboard parks were constructed, generally by local authorities, many of these had been demolished by the early 1990s.

Most skateboard parks are open air and formed from reinforced concrete. They generally have a flat area with a variety of sloping sides and features designed to enable various movements and acrobatics to be performed. A smooth finish is beneficial.

Some skateboarding takes place within former industrial or warehouse buildings using temporary timber ramps. It is unlikely that such ramps will be sufficiently fixed to the floor and/or walls as to be regarded as part of the hereditament.

3. Responsible Teams

Currently CCT Members are responsible for valuation with a member from each Business Unit. Any queries of a complex nature arising from a particular case should be raised through the CCT.

The Specialist teams within each Unit are responsible for the inspection and valuation of Ice Rinks in their area.

4. Co-ordination

The Class Co-Ordination Team has overall responsibility for the co-ordination of these classes. You can find contact details here Section 885: VP and CCT Members. The team are responsible for the approach to and accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers and referencers have a responsibility to:

  • follow the advice given at all times - Practice Notes are mandatory

  • not depart from the guidance given on appeals or maintenance work without approval from the co-ordination team

  • seek advice from the co-ordination team before starting any new work

No specific restrictions are believed to exist for ice rinks.

A Skateboard Park may be exempt if it is, or is situated within, a public park. The exemption from rating of parks provided or maintained by a local authority, Para 15 of Schedule 5 to LGFA 1988 (as amended), extends to any part of such park as is available for the free and unrestricted use by members of the public for the purposes of sport or recreation, e.g. cricket, football, bowls, tennis, BMX riding or Skateboarding etc. A reasonable charge for the use of equipment and the imposition of restrictions amounting only to proper management would not defeat the exemption.

Where, however, part of a park is reserved for the purpose of sport or recreation and the use thereof is granted to a club or person to the exclusion of the public, the part so reserved is not entitled to exemption and falls to be assessed, (See Blake (VO) v Hendon Corporation (No 2) (CA) 1965 RA 67).

Technical Advisers are able to give further detailed advice on this aspect if required.

6 Survey Requirements

Ice and roller skating rinks and skateboard parks should be measured to gross internal area (GIA) in accordance with the Valuation Office Code of Measuring Practice for Rating Purposes in England and Wales.

The actual rink area should be shown separately.

The survey should also note the following information:

Type of premises, age, construction, quality, costs of building/conversion, services, details of spectator areas, type/extent and quality of ancillary facilities, parking, location, transport links, competing or complimenting leisure attractions in the area, etc.

7. Survey Capture

In all cases plans and surveys should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

8. Valuation Approach

8.1 Rental method

Given sufficient evidence, the rental method forms the best approach to the valuation.

Where a rent relates to a “shell” of a building, care must be taken to ensure that adaptations are properly taken into account.

a.Ice rinks - rental evidence should be analysed in terms of a percentage of gross receipts and a price per m2 of the ice pad.

b.Roller skating rinks - rental evidence should be analysed in terms of a percentage of gross receipts and a price per m2 of the whole building.

c.Skateboard parks – rental evidence should be analysed in terms of a price per m2.

Where rents have been analysed in terms of gross receipts, then a percentage of known or estimated receipts for any other rink may provide a useful method of comparison.

Except for the largest fully commercial roller-skating rinks the preferred method of valuation is by using a price per m2.

Any skate parks (which are not exempt being part of a public park) should be valued having regard to any available local evidence, and comparisons to sports grounds/sports pitches may be appropriate if there is no direct evidence available. The valuation will need adjustment for the presence of ramps, jumps, bowls etc that are permanent structures, rather than temporary (and thus removable) items.

8.2 Receipts and expenditure approach

In the absence of reliable rental information, a full receipts and expenditure valuation should be undertaken and detailed accounts for at least the three previous years should be requested. Grants towards running costs should be taken into account insofar as they are receivable on a continuing basis.

The above does presuppose, however, that the motive of operation is unquestionably to make a profit.

Many local authorities now provide ice rinks, and especially skateboard parks, some of which are known to operate at a loss. Local authority accounts must be considered very carefully, especially where there is evidence of the private sector running an ice rink apparently profitably, and perhaps sufficiently as to pay a substantial rent.

8.3 Contractor’s basis

a.Ice and roller skating rinks – The contractors basis is not recommended for stand-alone ice and roller skating rinks. This method of valuation may however be appropriate where the facilities are provided as part of a larger multi-use leisure facility (some local authority, some private, some joint ventures).

b.Skateboard parks – where there is no rental evidence or receipts information to provide an alternative valuation method, a contractor’s basis valuation is appropriate.

8.4. Valuation Considerations

8.4.1 Ice skating rinks

The main factors that determine use and profitability are:> Location of the subject ice rink > Range of facilities > Quality of those facilities > Presence or absence of Resident Clubs > The immediate locality - especially where there have been regeneration schemes

All of these factors should be taken into account when determining the percentage of gross receipts to be adopted.

Other valuation consideration should include the following:

a. Plant and machinery

For the purposes of valuation and analysis, exceptionally, and for this particular class only, the value of rateable plant should be reflected in the value of buildings and not shown as a separate item.

b. Suitability as a venue for shows, non-skating events and ancillary sales

Additional revenue from the use of the property for shows, non-skating events and ancillary sales will form a significant component of the total income for a rink. The ability to attract such additional revenue will greatly influence the level of turnover and the profitability of the rink.

Relatively few ice rinks will be capable of attracting exhibition and conference business or of staging concerts. Ice shows, galas and ice hockey are likely to provide extra revenue where there is adequate spectator seating.

The ability to increase ancillary sales may be limited by the physical constraints of the building or site.

One source of additional revenue is where the operator of the rink owns an ice hockey team. This would generate a much wider income base from the sale of t-shirts, posters, etc. but at a much higher cost. In such cases it is critical to look at the full accounts to enable a judgment to be made regarding the real profitability of this income stream.

c. Car parking

As with most leisure attractions car parking is important. If this is contained within the hereditament, no separate charge will be made but the benefit will be reflected in the admission charge.

Where there is no, or limited, on-site parking, and no free public car park nearby, a separate parking charge may affect the admission price(s) and/or the number of admissions. This factor would therefore already be reflected in the gross receipts of the subject property.

8.4.2 Roller skating rinks

a. Comparison to ice rinks

It is likely assessments of roller skating rinks and ice skating rinks will be compared and this cannot be ignored. Nevertheless, when comparing these two categories of property it has to be remembered that although ice rinks have more ability to generate income from spectators, they occupy larger properties than roller-skating rinks and the running costs of providing an ice rink are much greater than that of a maple floor for roller-skating.

Consequently when undertaking a valuation, the percentage of gross receipts that is adopted should be higher than that applied to an ice rink doing a comparable level of turnover.

b. Comparison to industrial levels of value

Whilst in the past roller skating rink operators could afford industrial rental levels, the increase of rents in the industrial market coupled with the decreasing popularity of this leisure activity have led to some of the surviving operators negotiating rents at lower levels.

Hence, it is no longer appropriate to value roller-skating rinks at industrial levels of value with an addition for fitting out, unless such approach is consistent with the two limb rule of “rebus sic stantibus”, as defined in the Court of Appeal decision of Williams (VO) v Scottish and Newcastle Retail Limited and Another (RA/41/2001). This will be so where any alterations needed to facilitate the alternative use can be viewed as minor, and rental evidence suggests a hypothetical tenant wishing to use the property in the mode or category of a roller-skating rink would pay rent at a similar level to that of the alternative use.

8.4.3 Skateboard Parks

These will often be located in public parks and therefore the matter of exemption must be considered (see Legal Framework above).

9.Valuation Support

All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant Scat Code.

Other support available:

  • Survaid

  • Class Co-ordination Team

Practice note 1: 2017: Ice rinks

1. Market Appraisal

During the past 5 years the number of ice rinks in the country has fallen by approximately 30%. The older and more dated facilities have lost their share of the leisure market to either new or substantially modernised facilities elsewhere.

By June 2015, however, there was a 27% increase in the number of people participating in ice skating compared to 2014. The view within the industry is that there is an underlying demand and interest in ice skating indicated by the fact that last year 46,700 people took part in ice skating, every month of the year.

Demand for this particular class of leisure property goes through a 4 year cycle primarily driven by the Winter Olympics and by exposure of this sport on television - the Winter Olympics in Sochi in 2014 helped fuel the increase in demand of 27% referred to above.

However Ice Skating has not generally prospered in the last decade as British success in the competitive side of the sport has not been very significant, but there has been continued interest generated by the TV Show “Dancing on Ice”. The main purpose-built facility is the National Ice Centre at Nottingham, a venue with a 7,500 capacity for ice events and 10,000 for concerts. There is a modern ice rink in Sheffield with both a competition and practice pad, but the city’s chief ice hockey team play at the neighbouring Sheffield Arena. A traditional ice rink survives elsewhere in the city.

Multi-purpose Arenas, rather than ice rinks, are homes to some of the leading ice-hockey teams such as the Sheffield Steelers, Nottingham Panthers and Cardiff Devils. These arenas have a much greater spectator seating capacity than the majority of stand-alone ice rinks and are often used as concert venues throughout the year.

Some of the smaller rinks have limited seating capacity and any ice hockey team is likely to play in a lower league.

Values between these two types of property need to be co-ordinated where their physical characteristics are similar.

Within the last 3 to 4 years there has been a considerable increase in the number of mobile Christmas ice rinks within England and Wales. These range considerably in terms of size, and are often most popular at locations where there are other events taking place such as at Hampton Court Palace, Somerset House, or Canary Wharf. Despite the transient nature of this form of occupation these hereditaments still fall to be rateable.

Despite the closure of the more outdated and un-modernised ice skating facilities, there is demand for new and strategically well located facilities as demonstrated by the construction of a new £16 million ice arena in Cardiff Bay in 2014 - designed to be a world-class facility as part of a larger development project encompassing retail, hotel, and restaurants. Also, a new multi-million pound ice rink is promised for East Kilbride as is a new Olympic sized ice rink in Manchester City Centre for the “Manchester Phoenix” ice hockey club.

The outlook as at the Antecedent Valuation Date for the new and modern ice rinks is therefore one of cautious optimism, with reasonable expectations of moderate growth in the future.

2. Changes from the Last Practice Note

There are no changes from the broad principles followed for the 2010 Rating Lists and the approach therefore remains the same.

3. Ratepayer Discussions

None have taken place.

4. Valuation Scheme

General advice on valuation and the factors that need to be taken into consideration are provided in the main section of RM 5: Section 930.

Where a valuation is undertaken using a percentage of gross receipts, the guide for the percentage to be adopted is as follows:

Ice skating rinks 5.0% - 9.0%

Demand for ice rinks has two main drivers - the Winter Olympics and exposure on the television. The Winter Olympics in Sochi in 2014 has left a sustained demand for ice skating facilities in 2015.

Between the 2010 & 2017 Rating Lists demand has been underpinned and uplifted by these two “drivers” and a modest increase in the percentages adopted for Reval 2017 is justified - especially for the newer and more modern facilities.

But, any percentage increase in the rate adopted needs to be tempered by the increase in running costs, especially that for fuel.

Many operators are consolidating their estates and closing the older and less profitable facilities. For the older and un-modernised ice rinks a nil increase in the percentage to be adopted is probably more appropriate.

Practice note 2: 2017: Roller skating rinks and skateboard parks

1. Market Appraisal

Roller Skating

The roller skating rink market was largely developed in the 1980s when operators favoured existing industrial units that could be converted to roller rinks with minimal alterations. However, the popularity of roller skating has been in decline since the late 1990s with closures or diversifications into other leisure uses such as children’s party/play facilities, though there may be exceptions to this, especially in London.

Skateboard Parks

The provision of skateboard parks, both outdoor and indoor, continues to fluctuate with the waxing and waning in popularity of the sport from year to year. They are often linked with BMX free-styling courses/parks.

2. Changes from the Last Practice Note

There are no changes from the broad principles followed for the 2010 Rating Lists and the approach therefore remains the same.

3. Ratepayer Discussions

None have taken place.

4. Valuation Scheme

General advice on valuation and the factors that need to be taken into consideration are provided in the main section of RM 5: Section 930.

Where a valuation is undertaken using a percentage of gross receipts, the guide for the percentage to be adopted is as follows:

Roller-skating rinks 6.0% - 9.5%

Except for the largest fully commercial roller-skating rinks the preferred method of valuation is by using a price per m2.

Any rental evidence for buildings used for both roller skating rinks and skateboard facilities should be analysed on the basis of a price per m2. Analysed rents should be adjusted for any rateable tenant’s improvements and this analysis used to form the basis of valuation for these and other non-rented properties. It is anticipated that rents of former industrial premises for both types of facilities will often be below the local industrial or warehousing tone. The suggested range of values where the only use envisaged is as a roller-skating rink is £20/m2 - £30/m2. Values are unlikely to have increased significantly from 2010 if at all, though this will be evidenced from rental evidence or turnover. Regard should also be had to other similar leisure uses in former industrial buildings such as indoor Go-Kart tracks.

Practice note 1: 2010: Skating rinks & skateboard parks

1. Co-ordination arrangements

Ice Skating Rinks are an SRU class and responsibility for ensuring that appropriate co-ordination takes place lies with the Specialist Rating Units.

For R2010 roller Skating Rinks and Skateboard Parks are a Group Class and responsibility for ensuring that appropriate co-ordination takes place lies with the Groups.

Co-ordination responsibilities are set out in RM : Section 6: Part 1.

Special Category Codes should be used as follows:

140 for ice skating rinks, as an SRU class the appropriate suffix letter should be S.

239 for roller-skating rinks and skateboard parks as a Group class the appropriate suffix letter should be G.

2. Background

Ice Skating has not generally prospered in the last decade as British success in the competitive side of the sport has not been very significant, but there has been interest generated by the TV Show “Dancing on Ice”. The main purpose-built facility is the National Ice Centre at Nottingham, a venue with a 7,500 capacity for ice events and 10,000 for concerts. There is a modern ice rink in Sheffield with both a competition and practice pad, but the city’s chief ice hockey team play at the neighbouring Sheffield Arena. A traditional ice rink survives elsewhere in the city.

Multi-purpose Arenas, rather than ice rinks, are homes to some of the leading ice-hockey teams such as the Sheffield Steelers and Newcastle Vipers. Some of the smaller rinks have limited seating capacity and any ice hockey team is likely to play in a lower league.

The popularity of roller-skating has been in decline since the late 1990s with closures or diversification into other leisure uses such as children’s party/play facilities. The number of roller skating rinks continues to decline, for various reasons, and demand for such properties has also fallen.

The provision of skateboard parks, both outdoor and indoor, continues to fluctuate with the waxing and waning in popularity of the sport from year to year.

3. Valuation

General advice on valuation and the factors that need to be taken into consideration are provided in the main section of RM Section 6: Part 3 Section 930.

The available rental information for skating rinks shows little or no upward movement.

With higher utility costs it is likely profitability will have fallen and therefore rental bids are likely to be somewhat lower than in previous lists.

Where a valuation is undertaken using a percentage of gross receipts, the guide for the percentage to be adopted is as follows:

test

a) Ice skating rinks 5.0% - 8.0%
b) Roller-skating rinks 6.0% - 8.5%

Except for the largest fully commercial roller-skating rinks the preferred method of valuation is by using a price per m2.

Any rental evidence for buildings used for both roller skating rinks and skateboard facilities should be analysed on the basis of a price per m2. Analysed rents should be adjusted for any rateable tenant’s improvements and this analysis used to form the basis of valuation for these and other non-rented properties. It is anticipated that rents of former industrial premises for both types of facilities will often be below the local industrial or warehousing tone. The suggested range of values where the only use envisaged is as a roller-skating rink is £20/m2 - £30/m2. Values are unlikely to have increased from R2005, even if the local industrial tone has increased, reflecting the low demand for roller-skating rinks. Regard should also be had to other similar leisure uses in former industrial buildings such as indoor Go-Kart tracks.

Any skate parks (which are not exempt being part of a public park) should be valued having regard to any available local evidence, and comparisons to sports grounds/sports pitches may be appropriate if there is no direct evidence available. The valuation will need adjustment for the presence of ramps, jumps, bowls etc that are permanent structures, rather than temporary (and thus removable) items.

This property is valued using the non-bulk server.

4. IT Support

The development of a new facility on the Non Bulk Server (NBS) should enable input of factual data to achieve valuations that follow the recommended approach for both classes of property. All valuations should be entered onto the NBS under the relevant Scat Code.

Practice note 1: 2005: Skating rinks & skateboard parks

1. Co-ordination arrangements

Ice and roller-skating rinks are SRU classes. Responsibility for valuation and co-ordination lies with the SRU. Co-ordination responsibilities are set out in Rating Manual: Section 6 - Part 1

Special category codes apply as follows : 140 for ice skating rinks, 239 for roller-skating rinks. As an SRU class the appropriate suffix letter should be S.

Skateboard parks are a Group class. Groups are responsible for valuation, but should pass any known rents to CEO Local Taxation (Licensed and Leisure Team 2), who will disseminate information available to other Groups with skateboard parks to value.

Groups should also liaise with the relevant SRU to ensure that they are aware of skateboard parks assessments and any other relevant information.

2. Background

Ice Skating has not prospered in the last 5 years as British success in the competitive side of the sport has not been very significant. Several ice rinks have closed in the period but there has been the opening of the National Ice Centre at Nottingham, a venue with a 7,500 capacity for ice events and 10,000 for concerts. A new ice rink has also opened in Sheffield with both a competition and practice pad, but the city’s chief ice hockey team play at the neighbouring Sheffield Arena. A traditional ice rink survives elsewhere in the city.

The popularity of roller skating has continued to decline since the late 1990‘s with further closures or diversification into other leisure uses such as children’s party/play facilities. A large number of roller skating rinks continue to operate as part of local authority leisure centres where profitable operation is not a primary objective.

The available rental information for skating rinks shows little or no upward movement. Receipts have not increased significantly in the period and lower profitability may have resulted due to increased public liability insurance costs.

3. Valuation

General advice on valuation and the factors that need to be taken into consideration are provided in the main section of RM 5: Section 930.

Where a valuation is undertaken using a percentage of gross receipts, the guide for the percentage to be adopted is as follows:

a) ice skating rinks 6.0% - 8.0%
b) roller-skating rinks 7.5% - 9.0%

For roller-skating rinks the preferred method of valuation is by using a price per m2. The suggested range of values where the only use envisaged is as a roller-skating rink is £20/m2 - £30/m2. This will generally be below the value adopted for similar industrial/warehousing buildings to allow for any costs associated with returning to that use.