A leading councillor said last night that the people of Brighton and Hove will be paying off a loan brokered for the i360 until 2041.
The Labour deputy leader of the council Jacob Taylor confirmed the extent of the situation in response to a question from the Conservative leader Alistair McNair.
Councillor McNair asked how the i360’s insolvency would affect Brighton and Hove City Council’s finances in a written question to Councillor Taylor.
The Conservative leader asked what the council was doing to find a potential new owner in a question that was submitted before the meeting of the full council yesterday (Thursday 19 December).
Just over 12 hours after receiving his answer, staff at the i360 were told formally that the seafront attraction was closed and that they would not be paid.
The news comes just over three weeks after the company that runs the i360 gave notice of its intention to enter administration.
The company owes £1 million to the council after brokering a £36 million loan under the Greens in 2014, with support from some Conservative councillors.
The council arranged the loan with the Public Works Loan Board, a government agency, to fund the building of the i360 on land leased from the West Pier Trust.
Since 2014, the amount owed to the council has gone up as a result of missed payments, with interest added and a separate £4 million loan from the local enterprise partnership Coast to Capital.
The Coast to Capital loan has since been “novated” to the council at no cost. It meant that the repayments – if ever made – were made to the council.
In the meantime, the council remains responsible for repaying the government an outstanding balance of about £32 million at the rate of £2.2 million a year until 2041.
Councillor Taylor said last night: “It is interesting that the Conservative member does not understand that, despite the Green and Conservative groups voting to provide the i360 with a loan in 2014, they were agreeing to provide a loan to a private company over which the council has no jurisdiction.
“They were agreeing for council to effectively act as a bank. We are now in a legal company administration process.
“Although, like a bank, the council has some rights as a secured creditor, such as veto over sale to another operator, it is for the administrator, appointed by the i360, to achieve the best possible outcome for all creditors.
“The administrator is statutorily required to consider all available options.”
If the administrator sells the business, it will be up to a new operator to decide what to do with the i360 and the various assets.
We, the people of Brighton and Hove, said this project wouldn’t work and yet now we are lumbered with the debt. I don’t remember signing any contract that said we were liable for a private debt.
I’ve lived here since 2006, I was never asked my opinion on the financial viability of a completely unique vertical pier so you saying ‘we, the people of Brighton and Hove said it wouldn’t work is a reach.
Tell you what Billy, as the representative of the people of Brighton and Hove and our appointed spokesperson what is your, sorry our idea of how to resolve the outstanding loan?
It reeks of the Tory Boomerati.
Privatise the profit and socialise the losses.
i am surprised that the council did not take any insurance just in case in went belly-up. May be the B&H Albion FC could take up?
If private finance pulled out of it because they thought it would go wrong what insurance company would tough that debt ?
Clearly the blame lies with the local Green Party who should be financially culpable for the disaster
Do not ever forget that this loan only got through because of Tory votes.
Do not ever let the Tories off the hook for their share of the blame.
I still haven’t met anybody who liked it except the fictional character DS Roy Grace.
Hi John, I like it. Shame it just wasn’t commercially viable with the council tacking an extra £20m onto a £31m loan.
Should make those doorstep discussions at local election time a bit quicker.
Q: Did your party support building the i-360 and then lending it more money when it was never going to recover ?
A: Yes
Door clicks shut.
Holding an individual councillor responsible for the actions of a previous council member they have nothing to do with decades ago is an utterly stupid way to determine your vote but you can waste your vote anyway you want to Chris.
Decades ago?
The decision on the loan was taken in 2014.
i360, bin strikes, electric bin trucks that are broken down 50% of the time, zero road repairs. Smells like a green mess
Yep – they did rather make a dog’s dinner of it all really.
What’s with the tedious ‘Boomeratti’ schtick? It’s hardly helpful or constructive, to blanket blame everything on a specific age group (and no, I’m not a boomer) I smell a man a bit too pleased with himself, for ‘inventing’ a new word. But yes, a project which was entirely unsupported by private investment, turns out to be a basketcase – who knew 🤔 And the poor staff, 5 days before Christmas 🎄