The owner of the Palace Pier has urged Brighton and Hove councillors to pull the plug on the i360 next week and let him take control.
Luke Johnson, whose investment business Risk Capital Partners bought the pier just over two years ago, put his request in writing to senior councillors and officials.
But despite the 56-year-old author and entrepreneur’s impressive credentials, he has yet to receive anything except a brief acknowledgement from anyone at Brighton and Hove City Council.
A report to a special meeting of the council’s Policy, Resources and Growth Committee next week – on Thursday 28 June – is expected to recommend that the council eases the i360’s loan terms.
The seafront observation tower has not attracted as many visitors as it forecast but it is still trading at a profit, the operating company Brighton i360 said.
Mr Johnson, a former chairman of the television broadcaster Channel 4, said: “I am writing in my capacity as the chairman of Brighton Pier Group PLC.
“I wish to protest strongly over the arrangement being proposed by the council executive and the struggling i360 attraction.
“This project was funded with over £40 million of public money – most of it from Brighton and Hove Council.
“In itself this loan was a dubious intervention in a high-risk venture. It represented 87 per cent of the capitalisation of the project, including the LEP (local enterprise partnership) funding.
“It is quite inconceivable that any normal lender would have extended nearly as much money as a proportion of the whole funding for a pure start-up.
“Now, to compound that mistake, you are recommending that the council approve a debt rescheduling which represents a 96 per cent reduction in interest payments for the i360 over the next six years.
“I accept the notional council interest of the PWLB (Public Works Loan Board) facility will still be paid.
“Under the current i360 management visitor numbers are roughly half the original projections on which the original loan was based.
”Given that woeful performance, it is inconceivable that a ‘commercial lender would agree to these restructuring proposals’ – as asserted in your document.
“I have extensive experience of debt restructuring – and in these circumstances the lender would seek to repossess the security and change the management.
“In my opinion, the business cannot meet its obligations and is insolvent, and the equity is worthless.
“Consequently it is clear that the proposed rescheduling is not state aid compliant and that the council should not approve it.
“Brighton Pier Group is a significant employer and payer of business rates in Brighton. I am also involved with other businesses locally which are major employers and pay significant business rates. We do not get this sort of special treatment.
“Why is the council favouring one particular business? The council would be in breach of its fiduciary responsibilities towards local citizens and businesses if it were to prop up a project which has underperformed so badly.
“As an alternative, Brighton Pier Group PLC would be willing to take on a management contract to run the i360 attraction on behalf of the council.
“We are confident that we could make savings and efficiencies across the two businesses in areas like marketing, procurement, accounting, HR, IT and other administration costs.
“We are also confident we could cross-market the two attractions and thereby boost visitor numbers and events.
“This recommendation would give the council a much better chance of earlier receipt of interest and an improved chance that its loan was ultimately repaid in full.
“Currently there must be a serious possibility that the i360 is worth significantly less than it cost to build and that the council loan of £36 million is at risk.
“Our suggestion is surely a better solution than continuing to support a management team which has seen frequent leadership changes and has not met targets.
“I shall be communicating with all the Brighton and Hove councillors to ensure they are fully informed.
“I look forward to your response.”
Mr Johnson said yesterday: “I sent this to every councillor on the appropriate committee and the council officers.
“It was sent over a week ago. All I’ve had so far is a single line acknowledgement saying that they got it.”