Finance specialists will continue to look at how to make changes to the Brighton i360’s loan repayments while protecting the taxpayer.
These could even include Brighton and Hove City Council taking over the i360 itself or forcing or persuading the owners to sell the seafront attraction to another business such as Merlin, which runs the Sea Life Centre.
Other options are to ask the i360 owners to put in more of their own money, give the i360 more time to make repayments or allow the owners to pay back the money at a lower rate of interest.
The finance specialists, GVA, told members of the council’s Policy, Resources and Growth Committee in a report: “Based on the summer trading figures, it is unlikely the i360 consortium will be able to meet their full loan obligations in December 2018.
“As such the council has begun to consider options on restructuring the current debt to ensure that their investment is protected.”
A decision on what to do next to deal with the i360’s debts is expected when the Policy, Resources and Growth Committee meets in December.
Councillors this evening noted a report by council officials without debate. It included GVA’s report on the i360’s £36.2 million loan from the Public Works Loan Board, which is due to be repaid at the rate of £922,000 every six months.
The loan was arranged by the council which also takes a cut worth £570,000 every six months – or £1.14 million a year until 2041.
The committee had already deferred one payment of £570,000 – at the end of June – and there is a concern that the i360 will be unable to meet its obligations at the end of December.
The problem was blamed in part on visitor numbers being lower than predicted.
According to the report before councillors, the best case scenario appears to be that the council would face a £1 million shortfall in three year’s time.
By June 2021, when a second loan of £4 million from the Coast to Capital Local Enterprise Partnership (LEP) becomes repayable in full, the i360 will have to find the cash to repay the debt, which forecasts suggest is unlikely, or refinance it.
Representatives of the council, LEP and i360 will meet regularly to discuss a long-term restructuring of the loans before the committee’s next scheduled meeting on Thursday 6 December. If no agreement is reached, the council could force take default action and even force the owners to sell.
Another specialist firm, Leisure Development Partners (LDP), has been appointed by the council to give commercial advice.
LDP has previously advised the owners or operators of the Eiffel Tower and the Palace Pier.
The firm will look at how to maximise the i360’s income and ways to measure and improve its performance.
Julia Barfield with colleagues turned up at PRG for this but during Call-over councillors were silent which meant accepting the report without discussion or debate. The i360 owners were left to stew and given nothing to go home with beyond the report.
Are LDP experts in painting white elephants?
How much are they going to be paid to change it?
It goes up, it goes down … On a clear day if you look to the South there’s a blue bit with another blue bit. If you look inland you can see the roof of one extraordinary building, some very dull buildings and some countryside which is well worth seeing up close.
Utter, predictable, farce.
I blame the Green Party; a bunch of incapable and incompetent Marxist clowns…
Maybe Jamie Oliver could take it over, and call it “Pie in the Sky”
Are they still paying The West Pier Trust rent and has the money owed to them by the West Pier Trust been paid in full?
wrong location not much to see in Brighton though enjoyed the ride up with a glass of bubbles.
Looks to be turning into a white elephant. It’s too expensive – £16.50 for a 20 minute journey. That’s not great VFM and a bit extortionate if you’re a family. Better to change the pricing model and encourage more repeat visitors.
Absolutely disgusting and incredibly high risk investment using council tax payers money. The council members that arranged this are not fit to run a chip shop let alone a city.
Agree with comment above regarding pricing and vfm. They have pitched themselves as a higher class attraction, but the experience doesn’t live up to hype. Better off lowering the price, becoming mass market,doing themed ‘flights’ and events etc. They need bums on seats and not pretentions and preciousness at this stage.
It was clear from the outset this was a non starter -a vanity project of the worst kind, being pushed through by people who don’t have a clue.
With the fact that the country is awash with money for investment to give a good return, it was no accident that no one wanted to invest in this project. The council jumped in with both feet without scrutinising the numbers. It has been obvious from the start that the local tax payer will pick up the bill.