The fate of the Brighton i360 is tied to the advice being prepared by a financial restructuring specialist for a crunch meeting in two months’ time.
The specialist firm, GVA, was appointed earlier this year to manage Brighton and Hove City Council’s property portfolio.
But the firm has also been asked to look at the options for restructuring the i360’s finances because the company that owns the seafront tourist attraction is struggling to meet its financial obligations.
The executive in charge of the i360 – Steve Bax – is to leave, with a successor already appointed.
Although an update will be presented to members of the council’s Policy, Resources and Growth Committee meeting on Thursday 11 October, a much more important meeting of the same committee on Thursday 6 December will decide the venue’s fate.
It comes after a request for easier repayment terms to one of the i360 lenders – the Coast to Capital Local Enterprise Partnership (LEP) – was turned down.
The £4 million loan from the LEP is much smaller than the £36.2 million loan from the Public Works Loan Board brokered by the council but the interest rate is higher.
A report to the Coast to Capital board meeting in July said: “The Coast to Capital loan ranks second in the debt structure of the attraction, behind the loans made by (the council).
“The debt structure for the i360 is relatively complex, with a so-called waterfall structure giving the operator flexibility to defer repayment of our loan out to 2021.
“To balance this, Coast to Capital claims include not only our £4 million loan at a 3.75 per cent interest rate but also a separate payment in kind claim which was designed to allow us to benefit from the long-term profitability of the project.
“The company’s poorer than expected revenues in the first year and a half since opening has had two adverse financial consequences.
“It has not been able to set aside any funds towards repayment of the LEP loan.
“No repayments to our loan have yet been made, and we have made no provision for this in our 2018-19 budget.
“The company is also struggling to make the required payments to the council.”
So far all those involved have been at pains to point out that the i360 has generated about £2.5 million for the council, without cost to the public purse.
The next repayment of the Public Works Loan Board money to the council is due to take place at the end of December.
So…CEO number 2 is leaving. How long will this charade continue before the i360 is forced to turn itself over to BHCC and BHCC has to find a way to keep it going to get back the money it loaned so it does not have to come from the taxpayer?
If the Councill had built ‘homes’ at say 100,000 each well-I it would be 360 homes and 200,000 change.
There’s much that’s good about the i360 and on a clear day the views are amazing. But it’s poorly marketed and the whole airport-style security nonsense is really off-putting. All the prices are too high as well, including food and drink. I hope it works out for them but over 2 years after opening they still haven’t got the fundamentals right.
The whole thing is a huge white elephant that should never have got off the ground. This was always going to happen, it’s been a complete vanity project.
Most locals knew it would struggle. Mainly because half the view is SEA. And the other half, for the most part, is Brighton roofs. Not a lot going for it.
Visitors from Australia and their English relations enjoyed it recently. A shame, as somebody says, that there is the palaver of getting on it.