Owners of troubled tourist attraction the i360 are unlikely to make any loan payments this year.
Since it opened in 2016, its management company has deferred £3.7 million in loan repayments to Brighton and Hove City Council.
And next Wednesday, a virtual meeting of the council’s Policy and Resources (Recovery) Sub-committee will be asked to defer both the June and December loan payments due this year.
A further £150,000 of the £612,000 promised as the December 2019 payment is also likely to be deferred.
The seafront attraction, which has been closed since the coronavirus lockdown started, is repaying the £36 million Public Works Loan Board loan, which was underwritten by the council.
Deferring payments will affect the council’s cash flow, according to the report going before the sub-committee.
Council investments are kept in short-term low-interest accounts at the moment to keep finances “liquid”, to help cover the extra costs related to the covid-19 coronavirus.
The report going before councillors said that the i360 would normally expect to make “significant income” during the weeks of pleasant spring weather.
As the government moves towards easing the lockdown, the visitor economy may not be a priority.
Social distancing, in whatever form it takes in the future, will limit numbers in the i360’s pod, shop and restaurant.
The report said: “In discussions with the i360 board, they have expressed optimism that they do have space for good social distancing.
“If they are allowed to open in July and August, they would benefit from ‘staycation’ tourism and start to see income coming back quickly in what are the two most lucrative months of the year. About 30 per cent of annual turnover is normally achieved in July and August.”
Another proposal put forward is a timetable of regular meetings between i360 management and the council’s i360 Member Working Group.
The working group formed in December and met with the i360 board for the first time on Wednesday 3 June.
During that meeting, councillors urged the i360 board to ensure that it sought all possible government financial support, including loans.
Visitor numbers halved in February after the first reported cluster of covid-19 cases in Brighton and Hove.
Two major storms in the same month also took their toll on visitor numbers.
In December, a report to the Policy and Resources Committee said that the i360 had contributed £89.6 million to the city economy.
The council also receives a percentage of ticket sales.
So far this money has gone to the fund for restoring the Madeira Terraces and festoon lighting along the seafront.
The “virtual” meeting of the Policy and Resources (Recovery) Sub-committee is due to be webcast from 4pm next Wednesday (24 June) on the council website.
So are they defaulting on the loan and also the dividend and the 15p per ticket sales?
Hate to say I told you so but I told you so.#sendkitcatthebill
British Airways cannot afford to run that thing. How long before their livery is removed?
BHCC cannot afford to take it on or to repay the £36.4m loan + interest to the PWLB. All the i360 is asked to pay is loan interest to BHCC – not even the capital sum.
And now Covid19 controls the moment, paralysing all the players.
British Airways don’t run it.
Their name will be there until the sponsorship agreement ends.
£89.6m to the local economy!!!! Which planet do they think we have all just arrived from. If that had read £8.96 I still think that would be over exaggerated
How fortuitous that the city’s tourism industry has been so heavily impacted by the lockdown. I imagine several councillors and ex-councillors are feeling an enormous sense of relief, akin to that felt by a murderer who’s just heard that the disused warehouse in which he left his victim’s corpse has been destroyed in a massive blaze.
i have looked for a full history of brighton marina, which should show Brightons involvement in financing the building of Brighton Marina , and how much they lossed, it seems none of the councilors have learned a lesson of investing in major schemes , the i360 will be another which the people of brighton and hove will have to pay for
The i360 was making MASSIVE LOSSES even before the coronavirus outbreak.
This cost £40.2 MILLION in PUBLIC MONEY voted for by the Green and Tory Councillors.
Now the Council Tax Payers are being expected to pay even more. Existing amount of £3.7MILLION plus the further £3.1MILLION. I make it £6.8MILLION!
Council Services are now under threat due to the shortfall in funds…..
This cost £40.2MILLION of PUBLIC FUNDS. It is now making MASSIVE LOSSES.
The Green and Tory Councillors voted for this and should take responsibility for this financial headache.
The Council now has a shortfall of funds and Services could be affected.