Advisers have agreed to postpone repayment of a Â£ 1.2million loan from the Brighton i360, as it could cost more if they deny the request.
They did so after learning that the i360’s total debt to Brighton and Hove City Council was about to exceed Â£ 45million.
Conservative Councilor Steve Bell has expressed fears about the effect on the council’s finances if the waterfront attraction fails.
He spoke at a council policy and resources committee meeting at Hove town hall this afternoon (Thursday, July 1).
The committee heard that the i360 performed well during the coronavirus pandemic – when it was able to operate – compared to other tourist attractions.
The week of Pentecost at the end of May proved to be more fruitful than in 2019, with attendance increasing – and increasing week by week.
Councilor Bell, the leader of the Conservative group, said failure to support the i360 could potentially be devastating for the council which had guaranteed a Â£ 36.2million loan.
He said many of the councilors who backed the loan – from the Public Works Loan Board – were no longer board members.
And the Conservatives had “moved on,” he said, from the time they voted with the green administration at the time.
Councilor Bell, who is also a member of the council’s i360 task force, said he hoped people would understand councilors were not just “nodding” during the postponement.
He said, âWe still have to pay back the Public Works Loans Commission because it’s our loan, so we’ve lost our pocket a bit.
âI want to assure people that what we are doing here is not blindly what the i360 is asking of us.
‘But what we’re trying to do is protect the townspeople from what is now a Â£ 41million loan.
âThe only way for us to see a clawback or a return on this money is to work with them. “
Councilor Bell also asked about the council taking on a Â£ 4million loan to i360 from the Coast to Capital Local Enterprise Partnership (LEP).
He was told that the council would not pay anything to repossess the loan but would benefit from the repayments.
Union adviser Carmen Appich, co-opposition leader, said her party had opposed the Â£ 36million loan from the start.
Councilor Appich, who is also a member of the i360 working group, said: âThe unions have not supported this project and we doubt that the repayment of the original loan will occur unless we significantly extend the deadlines, with implications for the life of the asset. .
âI think the attraction is doing everything it can to maximize revenue and they have done very well to do so.
“We are supporting the agents’ efforts to do the loan restructuring … It would be nice to see if we could get some money before the loan restructuring if they do really well in the summer and generate a lot of income.”
Green Council chief PhÃ©lim Mac Cafferty said: âWe always want the i360 to be successful. We want them to add to the rich set of destinations in our city that can help bring visitors not once but twice and stay overnight as well. “
Over the past three years, more than Â£ 6million in loan repayments has been missed because the i360 hasn’t made enough money, with fewer visitors than expected.
For the year up to June 2022, the number of visitors forecast is 292,000. This is 10% less than in 2018-2019, in part because fewer foreign visitors are expected.
In December 2019, advisers agreed to complete a ‘loan restructuring’ with the i360 – reducing upcoming installments to give the company a better chance of repaying the overall Â£ 36.2million loan.
But covid lockdowns have made finalizing the deal unrealistic – and now, according to a council report, interest on the i360’s debt has pushed the unpaid sum to Â£ 41million.
When the Â£ 4million loan transfers from LEP, the i360 will owe the board more than Â£ 45million.
The restructuring of the loan is expected to be completed before the next payment date in December.