Changes to i360 loan terms on hold as councillors await more detail
More details should be made public about changes to the i360’s taxpayer-funded loans before councillors can sign them off, they said yesterday (Thursday 12 May).
The seafront attraction is millions of pounds in arrears on the loans which were brokered by Brighton and Hove City Council.
And the council and the i360 have been in talks about “restructuring” the loans – or changing the repayment terms – with both sides pledging that the debt will eventually be repaid in full.
A report to the council’s Policy and Resources Committee said that the i360 now owed the council almost £42.9 million after years of missed payments, with mounting interest adding to the debt.
And although a repayment was due by the end of next month, no minimum amount had been set, to the dismay of Labour and Conservative councillors.
Instead, the council plans to carry out a “cash sweep” of the available balances once the i360’s operational cash flow needs are taken into account and the major repairs account topped up.
A minimum payment of £900,000 is due in December, councillors were told, with £600,000 due in June next year. And the “cash sweeps” would happen every six months, alongside the minimum loan repayments.
Councillor Carmen Appich, the joint Labour opposition leader, asked for an assurance that the minimum payment this month would not be just “a penny”.
Dick Russell, one of the i360’s directors, told councillors that they could expect a payment which would run into the hundreds of thousands rather than just a few pounds.
Mr Russell joined i360 founder Julia Barfield for the Policy and Resources Committee meeting at Hove Town Hall yesterday.
She said: “We take our responsibilities to paying back the public money to the council very seriously – and certainly have done all the way through as much as we can.
“We’ve obviously been hit by unforeseen circumstances with covid but we’ve got an incredibly good team on board since 2019.
“They’re certainly out doing what many of the other attractions in the city are in terms of their commercial viability.”
Council tourism chief Donna Chisholm said that the i360 was developing a “credible” five-year business plan to help recover from the covid pandemic.
She said that a council working group, made up of three members, was focused on “protecting the public purse” to ensure that the council got its money back.
Labour councillor Clare Moonan, who was a member of the working group for a year, said that the council must be open and transparent about how the i360 will pay back taxpayers.
She said: “There is a disappointing lack of detail in the report. I was expecting something that was much more robust and much clearer.
“It would show the accountability much more on how we can ensure we’re going to get this money back.”
Councillor Moonan said that Labour had opposed building and financially supporting the i360 but accepted that, now it was in place, it needed the council’s help.
She said that there was nothing to stop the i360 from making a goodwill payment from the money in its accounts.
Conservative leader Steve Bell said that any decision to change the loan terms should be shelved until more details were available.
He said that an “urgency sub-committee” could approve the loan restructure before 30 June.
He criticised the lack of financial detail in the papers before the Policy and Resource Committee and said that information discussed at the previous week’s working group meeting was missing.
Councillor Bell said: “The residents of the city should be able to look at and read and see and feel we are working in their best interests to try to secure the money that we loaned at the time for the i360 and hopefully pay us back some money. I don’t feel we have that.
“Councillor Moonan and I sat through a meeting and we went through some of the issues then. I don’t see them in this report. That concerns me.
“If there is stuff missing in this report and we still don’t have the figure confirmed for the first payment, I’m unsure and very nervous about agreeing to this report sitting here today.”
Green councillor Tom Druitt, who is a member of the i360 working group, said that the council needed to find the right balance between bringing in cash to repay the loan while giving the i360 the maximum chance of long-term success.
He said that the full details were not in the report because they were still under negotiation but the principles remained the same.
Councillor Druitt said: “It’s fair to say we were all hoping that, at this point in time, we would have an agreed proposal for a restructure that (the Policy and Resources Committee) could look at in detail before it was agreed.
“That’s not the case. What hasn’t been mentioned yet is all we have in front of us is a draft proposal which is still in negotiation with the i360 and we are still waiting for some further information.”
He asked his fellow councillors not to delay a decision but to deal with any issues at the next working group meeting. He also suggested an “urgency sub-committee” could approve any substantial changes.
Labour and Conservative councillors won a vote, by six to four, to wait for more detail before deciding whether to sign off changes to the i360 loans.
The decision is expected to be made by an “urgency sub-committee” – made up of the three party leaders – by the end of next month.
As well as the £36.2 million loan from the Public Works Loan Board, brokered by the council, the i360 also borrowed £4 million from the Coast to Capital Local Enterprise Partnership – the LEP.
The council has since taken responsibility for collecting the £4 million debt but without having to pay any money for it to the LEP.
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Scandalous that Green and Tory Councillors agreed to this massive loan. The Council are already owed £10MILLION and that sum is rising! A waste of funds that could have been invested in social rent homes and infrastructure. The Committee Report was too vague about the amounts that would be paid back to the Council. The Greens, in particular, are wasteful with public money and have allowed this Council to get into deficit partly as a result of the massive losses from the i360.
Locals including me that lives near it said it would not attrack the numbers to make it viable. In the Winter the area is deserted.
But why is the venue in Darkness come 6pm? surely to make it viable the buildings around it should be used around the clock. How about some bars a nightclub?? for example. The pod could be a cocktail bar at night it would be quite simple to install a loo, it already has a bar. So could do hourly takeoffs. I would make it a Starwars attraction it already has a flying saucer.
Stupid question, but assuming these loans are eventually paid off does that mean us as council taxpayers will be better off (reduced council tax bills) I’m not holding my breathe as assume that we are not the target beneficiarys of the scheme, although I would love to see proof that says otherwise, anything the current council can do to reduce the burden on taxpayers would be appreciated, although I have to worry that we are seen as “the magic money tree that keeps giving”…
The gift that keeps on giving. #sendkitcatthebill
British Airways is not on board as a sponsor any more – that loses their security expertise and presence as well as uniformed image credibility….
The i360 should be quietly terminated and dismantled. The ground floor building should be converted to something that will repay the debt
Those of us that have lived close by for some time could see that this was a terrible idea and not a suitable place to build it.
It might work in London, with all the amazing history and architecture, but not here in Brighton.
Unfortunately, we were sneered at and dismissed as ‘being negative’. “Leave it to the experts” we were smugly advised.
So, now it’s clear the i360 is haemorrhaging money; I would like to advise a solution (one I have always advised since before construction).
The main problem is that it’s an expensive lift to nowhere and it’s too small to be used for anything that generates revenue. Instead, the pod should be the lift to a new, much larger pod which would be permanently fixed to the top. The i360 could then actually be used. There would still be a small charge for the lift but we would be going up there for ‘something’ instead of ‘nothing’. It would be the coolest restaurant/bar in Brighton and would be making money day and night. If the structure isn’t strong enough to support the extra weight, then a couple of support ‘legs’ could be added – tripod from war of the worlds!