Loan payment

Council asked to defer another £ 1million loan payment from Brighton’s i360 attraction, bringing the missed total to over £ 6million

The i360 on Brighton seafront reopened on May 17th

This would bring the total amount missed over the past three years to over £ 6million.

Later this week, senior members of Brighton and Hove city councils are asked to agree to defer payment on the loan – of more than £ 1.1million – which is due this month.

And they are again asked to “request that all funds in addition to the cash necessary to maintain the operational attraction be paid to the council in partial payment of the sums due”.

The report to the board says that for the year July 2021 to June 2022, the i360’s expected number of visitors to the pod is 292,000.

The board was due to complete a ‘loan restructuring’ with the i360 – cutting back on upcoming installments to give the company a better chance of repaying the overall £ 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 £ 41million.

The council is also to take over the Coast to Capital Local Enterprise Partnership’s (LEP) £ 4million i360 loan – at no cost to the council.

The report, addressed to the Board’s Policy and Resources Committee, said: “Given the financial situation and the number of visitors, officers did not make progress on the loan restructuring agreed in December 2019 as it was based on on an agreement on improved visitor numbers targets, which cannot be done while the attraction has been closed. “

The i360 reopened last month – Monday, May 17 – and the report states: “The first numbers for the first four weeks from the restart have shown strong performance under difficult circumstances.

“The number of visitors is down 19% overall, but the image is improving week after week.

“The holiday week of this year v 2018-19 was up 7%. Retail was down 12% but improved again week after week and the Skybar has increased revenue by 33% from 2018-19 since reopening.

“All of these numbers are ahead of their original forecast, giving confidence as they enter their peak summer period.

“The restaurant industry is doing even better. They opened on Monday, April 12 for outdoor dining only, then with a limited number of indoor meals available from Monday, May 17, and register a 75% increase over the 2018 comparative year. -19.

“With the limited number of overseas trips, they expect a strong summer for Brighton with an increase in stays and day trips.

“Once out of the main summer season, the future is of course more uncertain, which is a concern expressed by businesses in the city-wide visitor economy. “

The report also said: “The corporate lockdown grants and time off have helped i360 management control costs and a bounce loan has been received from the government.”

And the report examines the effects of the coronavirus lockdown and other restrictions, saying, “The covid-19 pandemic has had a huge impact on the pull. The board of directors made the decision to close on Thursday March 19, 2020, ahead of the government-mandated lockdown announced on Monday March 23 of the same year.

“The first nationwide lockdown came during weeks of fine spring weather, when the i360 would expect to generate significant revenue.

“In June 2020 (the board) agreed to defer loan payments due in June and December 2020, acknowledging that the attraction’s cash position would be affected by the foreclosure.

“Later in the summer of 2020, the attraction was able to reopen in a socially distanced manner.

“The i360 has performed well compared to other attractions across the country and while the number of visitors is clearly down, costs have been managed well and by many indicators the attractions have performed very well. .

“For September 2020, the number of visitors was only 13% lower than the 2019 figures and the yields (expenditure per capita) remained high.

“Marketing spend has remained proportional to the total budget, with marketing continuing during lockdown.

“In addition, measures have been taken to bring underperforming hotel concessions back internally and manage them directly.

“However, the overall visitor economy remained constrained by a lack of foreign visitors and towards the end of the year the second wave hit, resulting in a second lockdown in November, followed by tiered structure, then a third more severe lockdown from Wednesday January. 6, 2021.

Looking ahead, the report says, “For the year July 2021 to June 2022, the i360 forecasted number of visitors to the pod is 292,000.

“This is a 10% decrease from the last full year (pre-covid), which was 2018-19, when the number of pod visitors was 324,000.

“This projection is based on the fact that foreign visitors represent between 10% and 15% of the number of visitors and they do not expect this market to pick up before 2022-2023.

“But they predict an additional 96,000 visitors to the site who do not go to the pod, which would bring that total to 388,000.”

According to the report, the i360 has had “a strong economic and social impact … already contributing £ 89.6 million to the economy of Brighton and Hove”.

He added: ‘By the time the £ 36.2million loan from City Council and the £ 4million LEP loan that were invested to finance its construction are repaid, the i360 will have contributed $ 640million. pounds sterling to the town’s economy.

“This represents a return of £ 15.90 for every £ 1 of public sector investment. It has also generated additional direct income for the municipality which has been or will be reinvested in the waterfront.

The report also states: “The council should receive 1% of perpetuity ticket sales to spend on local initiatives.”

If the i360 were to fail, the board would have to step in, at least initially. The report said: “The case for supporting the i360… is not limited to broader economic reasons. This is to protect the finances of the board.

“If the i360 were to fail, the cost of putting it back into service and the loss of future loan payments would exceed any concessions made now.”

The report is to be discussed by the Board’s Policy and Resources Committee at a meeting scheduled to begin at 4 p.m. on Thursday, July 1.

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