The new owner of the Brighton i360 has agreed to give Brighton and Hove City Council a 1 per cent share of future revenues.
Nightcap Limited was understood to be the only serious bidder for the seafront attraction but told the administrators that the £51 million debt to the council was a deal breaker.
Just under a fortnight ago, the council’s cabinet agreed to write off the debt although the council still owes the government £32 million over the next 16 years – or about £2 million a year.
The income-sharing deal will not cover anywhere near the cost of those repayments but, with recent annual revenues of more than £5 million, the council could receive at least £50,000 a year.
The sum will be more if Nightcap – a hospitality business with dozens of bars – makes a better job of running the i360, with its prime seafront footprint, than the previous owner.
When the attraction reopens, it will also mean that council can expect to receive business rates of more than £300,000 a year although half of that amount would go to the government.
Administrators from specialist firm Interpath brokered the sale of the i360. The purchase price has not been disclosed but there have been suggestions that was between £500,000 and £1.5 million.
The whole process has left more than 100 former staff and dozens of suppliers out of pocket, with the i360 business owing almost £70 million in total when the plug was pulled.
But Interpath said: “A number of contractors have supported the mothballing and essential maintenance throughout the administration process.”
As well as the £51 million debt to the council, the operating company, Brighton i360 Limited, owed more than £17 million in unsecured shareholder loans.
The main shareholder was the founder and director Julia Barfield, a 74-year-old architect from London. She and her late husband David Marks designed the i360 as well as the London Eye.
The i360 was reported to owe former staff almost £570,000 in unpaid wages – as well as £240,000 in value added tax (VAT) to Revenue and Customs. There was a six-figure sum in the bank.
Just over 100 former employees can expect to receive no more than £800 in outstanding wages.
A statement of affairs prepared by Interpath said that trade creditors were owed more than £660,000, with £145,000 due to the council and £275,000 to the landlord, the West Pier Trust.
The debts included £93,000 to specialist engineering firm Poma, experts in lift technology, £40,000 to auditor Kreston Reeves and almost £12,000 to Nyetimber, the Sussex wine producer.
Interpath is expected to earn about £450,000 in fees from the collapse of the i360 and its sale to Nightcap.
The premium bar business was set up five years ago by a Kemp Town couple, Sarah Willingham, 51, a former star of the BBC TV show Dragons’ Den, and her husband Michael Toxvaerd, 50.
They have yet to share publicly their plans for the i360 site but they will want to make better use of the entire footprint, not least with thousands of potential customers strolling past on the upper and lower prom every sunny day.
Their business, Nightcap, has been growing rapidly through acquisitions. It is understood to have turnover in the region of £50 million a year and six-figure earnings.
Last night, Councillor Jacob Taylor, the deputy leader of the council, said: “We are delighted that Nightcap has taken such a keen interest in revitalising the i360 – and their passion and commitment to the city is evident.
“We think this is the best option for the city – giving a fresh start for the attraction and helping to ensure this important stretch of seafront can thrive.”
Councillor Taylor, who is also the cabinet member for finance and city regeneration, said: “The sale of the i360 represents a new chapter for the attraction.
“Nightcap is a superb company, with a proven track record of successfully operating hospitality venues locally and across the country.
“As local residents, the new owners understand the history of, and potential for, the attraction and are committed to revitalising the i360.
“This sale is the best option for the city now and should help to ensure our seafront continues to thrive. I wish Nightcap all the best in making it a success.”
Everyone says The Green Party is a joke but they’ve transformed the whole B&H seafront. Labour left the remains of the West Pier and Central Brighton Beach a derelict mess.Greens built the i360.
Levelling up funding for the new Hove Park. Have created a boardwalk and rejuvenated Black Rock. Got the brilliant Sea Lanes built. Started the rebuilding of Madeira Terraces that Labour let rust for decades. VG3 is almost finished 15 years after it was proposed. The Madeira bike lane. You may not like any of it but it’s all down to The Greens.
All that happens under Labour is the Albion Hotel burning down
“When the attraction reopens, it will also mean that council can expect to receive business rates of more than £300,000 a year although half of that amount would go to the government.”
It’s important to note that this isn’t an extra £ 150k income for the council to spend.
It goes into the great maw that is local government finance.
So you are saying that the hotel burning down was down to the Labour.
If you remember it was the Green Party the ones that drive Brighton in to near bankruptcy.
That’s the narrative that Labour push, despite them leaving the Greens with a £66 million shortfall when the Labour administration collapsed in 2020. It’s all nasty political spin on Labour’s part. Both Labour and Greens have had to manage setting budgets during difficulty Tory austerity years, and if you believe Labour spin when they say any overspend by Greens is reckless, and any overspend by Labour isn’t, it comes across as just naive.
The reality is that both have had to deal with council budgets reducing because of Tory cuts, while the demand on statutory services has increased. When councils elsewhere have gone bankrupt it’s generally for similar reasons.
Rather than just accept what the finger pointers say, sometimes it’s good to wonder why and what the finger pointers are trying to distract people from.
Just picking up on your point about bankruptcy, the point made about the hotel is much more random!!
All the Greens created, was waste of money that’s created chaos for the majority and a seafront such as the Sealanes which is only affordable to the few!
Someone please explain how the council can ‘write off’ £51m of debt?
Because the debt was owed to the council, they can choose to forgive it. It’s like someone owes you a tenner, and you say don’t worry about it. Same principle.
So council spends £46m building the i360 and sells it for an undisclosed some, up to £1.5m (less than 4% of the build cost) without the £51m debt. With the i360 expected to generate around £5m annually the new owners will get their investment back in 4 months. And this the best the council could do?
Well said Patrick! I couldn’t agree more!
Well said. I hope BHCC doesn’t expect to be welcomed into running any proposed unitary authority when it “rights off” over £50million on a seafront adventure that plenty of people were warning against investing in at the time.
Where did you get your information from they the Greens (or any party for the matter) built Sea Lanes?
Sea Lanes was financed and built by a privately owned company.
Well said Jon. It’s about time the Greens got recognised for their positive contribution to our city,
I wish them well.
The sooner it opens the sooner staff can be employed and earning a wage and suppliers can earn money as well as rates paid and so on.
So it’ll only take the council 1000 years to recoup the debt they wrote off! What clown was negotiating this deal for B&H Council???
The new owners didn’t have to offer it.
It’s good that they did but it’s silly to suggest that it is any form of payment towards the loan.
No, what’s silly is writing off £50m and not attempting to get a penny of it back! Insanity!
Probably the same people who thought it was a good idea to build in the first place xD
I like the positive enthusiasm of Jon, except still think the Tories or perhaps the independents would do a better job of running Brighton. The levelling up was money from the previous government, and began with a previous Tory councillor. Just thought I’d mention.
Nightcap still needs to actually make a profit itself.
So far, since it’s inception in 2020, all it has done is buy-up other people’s good ideas rather than demonstrate any actual inventiveness or business flair itself.
Its last published accounts show revenues of around £46m but still with an overall loss of circa £4.6m. It is also funding its buy-outs through a mix of share issues and debt.
With the pressures of the Labour government’s pending increases to National Insurance (NI), lower floor at which employer NI becomes payable, increased National Minimum Wage plus rising business rates, it remains to be seen whether the business even becomes profitable.
True, but the deal is that the council gets 1 percent of revenue rather than profit. So as long as they can manage their cash flows we will get some money back
I bet my last Rolo, that Nightcap will not make this work either.
“You can put lipstick on a pig……..”
Putting glitter on a tu**.
I’ve got a bad feeling about this?
What if this fails and closes again?
What guarantees are there?
None!
This thing appears to be turning into an even bigger white elephant!
How can it appeal to travellers with Brighton’s horrendous parking charges?
To park near to it cost over £23 for a few hours and like it or not, a family day out by car for a family is still the cheapest and easiest way of getting to and fro places like Brighton.
We live in Brighton and we can’t afford to get near it, let alone on it.
We couldn’t afford a £23 parking fee!
We can’t walk far as it’s painful so I thought of parking in the marina and use the Volks Railway to the Palace Peir, until I saw it’s around £13-£14 for two people!
I can recall it only being £1.60 not so long ago?
If we parked near to the i-360, that’s over £23 then another £40 to go on the i-360!
That’s £63 for just a few hours?
And I haven’t included getting a snack to eat or ice cream!
It is, (like everything else now), too expensive for the majority who have seen the biggest fall in living standards for 200 years thanks to the last government!
We can’t afford to live, let alone waste money we don’t have for simple pleasures like this! And until people see a great increase in their living standards, things like this will be unaffordable!
I no longer have any faith in the Labour Party increasing our living standards any time soon as they’ve turned Tory like it did under Tony Blair! I don’t know why Conservative voters criticise Starmer as he’s (like Blair) are only comtinuing Conservative Party policies of persecuting the people at the bottom who it seems, aren’t entitled to the right of a decent standard of living!
The Conservative Party? Yeah sure! They’re the ones who are 100% responsible for the mess we’re in!
And considering Reform is made up with prehistoric extreme right wing Tories who feel their old Party wasn’t extreme enough, or multi millionaires like Farage? What’s does he know about the struggles of ordinary people????
So no thanks!
At a time when people have so little money, it was simply insane to splurge £51 million of local ratepayers money on what is essentially a gamble!
But as someone who like many people, we can not afford luxuries like a social life anymore, so to find the best part of £50-£70 for a few hours away from our 4 square walls is out of our reach!
What a joyless country this has become to live in!
That is a rant and a half !
Easy to blame the conservatives when they have had to put up with pulling out of Europe then giving hundreds of millions to people in covid, it’s no wonder there is austerity now, did everyone think that none of that money would have to be paid back!!!
The greens and labour have made a mess of looking after Brighton for years if they have the money or not.
They should have spent the money on either doing the west pier up or building another one at the side of it,that would have bought more revenue into the city than a monstrosity of a massive lollipop?,,,
Why don’t councils put a vote out to the public to see what they want for their city instead of just going ahead with things that loses money,