FOLCA 1 to Be Sold at a Loss: The £13m Gamble on Folkestone’s Town Centre Revamp
Both documents referenced in this article — Cabinet Reports C/25/07 (FOLCA 1) and C/25/25 (FOLCA 2) — are scheduled for discussion at the Cabinet meeting on Wednesday, 16 July 2025.
In May 2020, Folkestone & Hythe District Council purchased the former Debenhams department store in Folkestone town centre for approximately £2.05 million. The site, comprising around 79,000 square feet, was strategically acquired to act as a regeneration anchor. Following a public naming exercise involving suggestions from local residents, the site was rebranded as “FOLCA” — a nod to the town’s Saxon heritage.
The purchase was made during the economic turbulence of the Covid-19 pandemic, with the intention of preventing a key retail site in the town centre from falling into long-term vacancy or speculative private ownership. As a council-owned asset, it was intended to become a lever for town centre revitalisation.
The property is physically and architecturally split into two main sections:
- FOLCA 1 – pictured: The original Edwardian red-brick building that fronts Bouverie Place and curves around to Sandgate Road. It contains approximately 0.07 hectares of floor space across three storeys and a basement.
FOLCA 2 pictured: The more modern Art Deco-style extension which faces directly onto Sandgate Road. It contains approximately 48,420 square feet of gross internal area across three storeys and a basement.
The Original Vision
From the outset, the council presented the acquisition as a bold strategic move to deliver economic, social, and health-related benefits to the Folkestone town centre and wider district. According to Cabinet Report C/25/07 – Folca 1 – Update and Disposal Strategy:
“To create uses within the former retail store which will help bring vitality for Folkestone town centre. To accommodate a new Health Centre which will bring modern, state of the art facilities, help improve health care provision for the district and help act as a driver for footfall in the town centre. To help revitalise the town centre through links and improvements with Bouverie Place and improve the sense of place. To help make Folkestone a more attractive place to live, work and visit, so retaining local spend in the town and attracting more visitors. To develop an attractive building which builds on the town’s history and is of a high-quality design, improving the urban aesthetic of the town.”
The primary objective was the development of a flagship medical centre, occupying FOLCA 1, that would consolidate existing under-capacity GP services in the town. Additional uses, including retail, office space, and potential public sector co-location, were intended for FOLCA 2.
To this end, Premier Primarycare Ltd, acting in conjunction with the NHS Kent & Medway Integrated Care Board (ICB) and local GP practices, began designing proposals for a modern, purpose-built health facility within the Edwardian building.
However, between 2021 and 2023, the economic and political landscape changed dramatically: inflation surged, construction costs soared, interest rates increased, and NHS estates criteria shifted. Ultimately, the NHS ICB formally withdrew from the FOLCA 1 project in December 2023.
FOLCA 1: SEVEN OPTIONS, SEVEN FAILURES
The collapse of the FOLCA 1 medical centre plan forced a strategic reassessment. The Council commissioned property consultants Colliers in October 2024 to undertake a full feasibility study. This included:
- Reviewing previous condition surveys,
- Internal and external inspections,
- Planning policy reviews,
- Market and development appraisals,
- A detailed Net Present Value (NPV) analysis across multiple use scenarios.
The consultants evaluated seven options:
- Refurbishment as mixed retail and office space
- Refurbishment as mixed retail and residential
- Refurbishment as a hotel
- Demolish and rebuild as flats
- Sale via auction
- Open market sale
- Do nothing / mothballing
Financial Analysis of Each Option
The NPV analysis found that every refurbishment or development option returned a negative value due to high capital expenditure, low demand, and limited achievable value.
“Any proposed development would carry significant financial risk to the council and the doing nothing / mothballing option would also cause significant financial pressure on both the Council’s revenue and capital budgets.” (C/25/07, Section 4.1)
The Council’s internal conclusion:
“The option that provides the best consideration is the recommended option to dispose of the building… on an open market sale basis.” (C/25/07, Section 4.2)
The site is expected to be marketed for 12–18 months. A red book valuation from Wilks Head & Eve estimated the likely capital receipt to be around £450,000, down from the £1 million originally hoped for in the 2022 MTCP.
Notably:
“No consultation has been held on its disposal. No cultural reuse plans have been presented.” (C/25/07, Section 4.4)
FOLCA 2: MIXED-USE AMBITIONS – WITH CONDITIONS
With the abandonment of the FOLCA 1 medical centre, council officers explored whether FOLCA 2 could host a downsized version of the GP hub in Cabinet Report C/25/25 Folca 2 – update.
A two-phased delivery plan was developed:
- Phase 1: Structural remediation, separation from FOLCA 1, roof works, internal strip out. Budgeted at £2.2 million from the Levelling Up Fund (LUF).
- Phase 2: Internal fit-out for commercial and public sector uses. Expected to cost £11 million more, funded by PSDS grants and borrowing.
The business case outlines use of the following funding:
- £2.2 million from the LUF
- £1.44 million from the Public Sector Decarbonisation Scheme (PSDS)
- £9.6 million from Council capital borrowing
“The redevelopment will be designed to deliver a low-carbon building… Energy consumption revenue savings – £86.5k per annum. Carbon emissions reduction – 103,000 kgCO2 per annum.” (C/25/25, Section 4.4)
“Work with the NHS ICB and GPs is therefore ongoing with the aim of arriving at a viable way forward to deliver this much needed new facility.” (C/25/25, Section 3.6.8)
Occupancy strategy includes flexible ground floor commercial uses (e.g., leisure, food, retail) with an upper floor medical facility serving ~23,000 patients. NHS lease negotiations are ongoing.
“The outcome of these discussions led to the proposal for the Council to effectively become the lead developer.” (C/25/25, 3.6.3)
RISKS, UNCERTAINTIES, AND REDACTIONS
- The NHS lease is not yet signed. Business case breakeven depends on lease type:
- Market lease: 27-year breakeven
- Subsidised lease: 6-year breakeven
- Redactions: Capital valuations and contract risks are redacted from the public version of Cabinet Report C/25/07.
- No reuse protections: No conservation or cultural guarantees are attached to the disposal of FOLCA 1.
- Grant deadline risk: LUF funding must be committed and spent by March 2027 or may be reclaimed.
- Debt pressure: Council plans to borrow £90 million over five years. FOLCA 2 accounts for £7.5m of this.
“There will come a time where we need to cut off and make a decision.” (Council officer, Overview and Scrutiny Committee, May 2025)
CONCLUSION
The FOLCA project began with a unified, ambitious vision. It has fractured into a salvage effort.
- FOLCA 1 will be sold to plug capital shortfalls.
- FOLCA 2 may succeed – but only if the NHS agrees to lease, commercial demand materialises, and funding deadlines are met.
- The original promise of a flagship health centre, developed without public consultation or safeguard clauses, now rests on an entirely different building.
Audit scrutiny, public transparency, and strong governance are essential in the coming months if residents are to have confidence in this flagship investment.
We would be interested in hearing about your experiences of Folkestone & Hythe District Council wherever you are in the district. Email: TheShepwayVoxTeam@proton.me in confidence.
The Shepway Vox Team
Journalism for the People NOT the Powerful
Yet another Monk cock up and now poor old Uncle Jim has got to sort it out but the bloke hasn’t got a clue and is way out of his depth along with all the Greens and their airy fairy ideas
@ Kevin
Uncle Jim doesn’t have a clue, yet he has appointed consultants to lay out the options and will act accordingly with what he’s been left with. As you clearly have experience in this field, you’ve said he hasn’t got a clue so you must know more than him, what would you be doing instead? Please don’t forget to show your figures.
Probably the best opportunity for a dedicated gig space for touring artists, F1 that is.
Detached from residential spaces and in a high street, with a main road on one side. Close to bus and train stations, and in the heart of the town.
A golden opportunity for live music.
That’s a great idea — especially given the growing appreciation for the town’s rich musical heritage, past and present, and the excitement about what’s still to come.
FOLCA 2 could be a better location for a library and multi-use museum/exhibition space
It is interesting that the conceivable marketed rate for the previously ‘Debenhams’ building could be £450,000. This is lower than the market value of my 3 bedroom semi with .3 of an acre. Are the Council interested in acquiring my home at the £13 million paid for the Debenhams site. Their losses would be lower…
The Folca 1 part of the building – the Edwardian part is the part which will go on sale for £450,000. The Art Deco part – Folca 2 is not being sold, this is the part where the gamble is £13m. The whole building Folca 1 & 2 was purchased in 2020 for £2m.