A fourth payment on the i360’s council-brokered loan is to be deferred because of bad weather – ahead of a proposed restructure of the whole repayment plan.
A council report published today says that following a review of how it is operated and marketed, visitor numbers have significantly improved on days with good weather compared to last year.
But bad weather since August has meant the number of visitors hasn’t grown as much as it was hoped and so another £880,304 due to be repaid to the city council this New Year’s Eve is also set to be deferred.
Meanwhile, councillors are being asked to approve taking on another £4million loan made to the i360 by the Coast to Capital local enterprise partnership (LEP).
Under this “novation” agreement, the i360 would pay the money back to the council, but the council would not need to pay anything to Coast to Capital.
The report says: “The LEP loan is due to be repaid in 2021. The attraction does not have sufficient cashflow to repay on that date.
“However, for the LEP the loan has fulfilled its main economic and regeneration purpose by delivering the new attraction to the city region, and the LEP do not need to continue to retain an interest in the asset.
“They have therefore proposed that the LEP loan that is repayable to them is granted (via novation) to the city council.”
And consultants have recommended that the council does not step in to run the attraction itself.
The report says: “Part of the work [consultancy] Avison Young has done has been to look at whether it would be in the council’s financial interest to exercise its step-in rights under the present loan agreement and take control of the attraction.
“Their report sets out several reasons why such action would not be advisable, and the advice is that the council should seek to avoid enforcement options.
“The asset benefits from sponsorship and maintenance arrangements that could be terminated as a result of an insolvency or step-in by the city council, and there would be a loss of value to the asset that is likely to be worse than restructuring the loan.
“Furthermore, as the directors of the i360 are operating the asset in way that substantially meets the requirements of the city council and are being co-operative, there is currently no clear rationale to pursue an enforcement strategy.”
The proposed restructure would be on the basis that the i360 keeps enough money from its profits each year to keep operating and marketing itself, and anything over and above that is repaid to the council.
The council would also have full visibility and access to the attraction’s day to day accounts.
A new member’s working group to give councillors oversight of the process would also be setup.
The report concludes: “The i360 has been a catalyst for regeneration, both on the seafront and in the wider city and will be into the future, no matter what happens with the way the attraction has been financed.
“It has had a strong positive impact on the city’s visitor economy while also delivering new funding streams that the city council would not otherwise benefit from.
“Strong steps have been taken towards turning around the financial performance of the attraction, which have seen improvements this year, despite very poor weather in much of the peak season.
“However, a full turnaround will take some time to get in place, and the existing loan needs to be restructured both to give time for this to happen, but also to give the city council opportunity to be paid back at the earliest possible opportunity and to potentially benefit from any upside in improved performance.”
The report is due to go before the city council’s Policy and Resources Committee next Thursday.
Instead of spending about the same amount on restoring the 150 arches at The Madeira Terraces and not putting all of their eggs in one basket the Council were hoodwinked into borrowing £40m to fund the i360.
Does this latest development set out how much the Council is actually receiving and is Brivhtoni360Holdings Ltd paying its Business rates a d is The West Pier Trust receiving full minimum rent as initally agreed?
What twiddle…. Bad planning… Bad management… Bad politics….
The big losers will be the citizens of the city as we’ll end up footing the bill…
this is why these idiot politicians need to be qualified before making thier idiotic decisions – kitkat approved this – then disappears into the twilight leaving taxpayers to foot the bill – he should be accountable for it – not the taxpayer because of his incompetence/ignorance
The i360 would look more tolerable if the word ‘STAINS’ was painted down the side of it, but the Council aren’t even capable of doing that…
Absolutely appalling situation which can never come right – good money after bad. When does it stop? When does it come down & the inevitable write-off get acceptance? Ever? Bite the bullet now!