Councillors have backed new loan terms for the Brighton i360 after the seafront attraction’s operator struggled to meet its original repayment schedule.
The i360 is still expected to pay back every penny of the £36 million that it borrowed from the government’s Public Works Loan Board through Brighton and Hove City Council – plus interest. The missed payments have meant that the loan debt has risen to more than £43 million.
And it will also have to repay a second loan from the public purse – a sum of £4 million – which the council is now responsible for collecting although the council took ownership of the debt at no extra cost to local taxpayers.
The total outstanding debt has risen to more than £47 million after the i360 missed a number of repayments, some of them because of the coronavirus lockdowns and related restrictions.
Under the new terms the council will carry out a “cash sweep” every six months and take all the spare cash in the business, leaving enough for the business’s operational needs.
The first cash sweep, at the end of last month, is understood to have resulted in about £700,000 being paid to the council.
The new loan terms – a “restructuring” of the i360’s debt – was approved by the council’s Policy and Resources at Hove Town Hall yesterday (Thursday 7 July).
Labour councillor Clare Moonan, a member of the council’s i360 Working Group, said that if the i360 failed to make three consecutive minimum payments again in the future, it should be required to come up with a business improvement plan.
Councillor Moonan said: “It’s a huge amount of public money – it’s £43 million – and we need to get it right.
“Labour can support this if the governance is strengthened in a few small ways. There is £700,000 in the bank which goes a long way to show goodwill and reassurance.”
Councillor Moonan said that she wanted to give the i360 a chance to get back on track if it missed minimum payments due to unforeseen circumstances such as another pandemic.
The Labour former council leader, Daniel Yates, has long been vocal about his frustrations surrounding the loan to the i360. It went through under the Greens, with Conservative support.
But Councillor Yates said that his views had mellowed after seeing the transformation of the beachfront area around the i360.
He said: “I didn’t vote for this. I wouldn’t have voted for public money to go in such large amounts to a high-risk project.
“Previously, I called this a ‘doughnut on a stick’ and I don’t think that’s fair. It’s so much more than a doughnut on a stick.
“It’s operating its full footprint and you can see the benefits of that when you travel down to the area. It’s a much more engaging place rather than something to visit.
“It’s encouraging visitors to that part of the seafront. It’s giving a focus and opportunities to people in that area in a way it wasn’t when it first started operating.”
The council’s Policy and Resources Committee heard from i360 director Julia Barfield who said that the board took their responsibility to pay back the loan seriously.
She said: “That area of the seafront was derelict and has been transformed over those years. Our commitment is total – 100 per cent to Brighton – through the i360.”
Green councillor Tom Druitt, who chairs the i360 council’s Working Group, said that the loan talks had been challenging but a cross-party effort with Councillor Moonan and Conservative leader Steve Bell.
Councillor Druitt said: “This is all about giving the i360 the maximum chance of success and therefore giving the council the maximum chance of recouping its loan.”
Conservative councillor Garry Peltzer Dunn, who voted for the loan back in 2014, said that he was assured at the time that even with half the projected number of visitors, the i360 would be able to repay its loan.
Councillor Peltzer Dunn said: “I see information about marketing and abseiling. I’m sure it’ll be really good as long as the bottom doesn’t fall out of the market.
“I can’t see the large numbers of people abseiling. It has to be hundreds of thousands of visitors required. We have no alternative to support it but we need further safeguards in position.”
One of the council’s most senior officials, Max Woodford, said that the i360 could make money through its restaurant, shop, “sky bar” and visitors.
Projected figures suggested that 400,000 people would visit in 2026-27, compared with 292,000 in 2021-22 when the numbers were affected by covid.
The committee was told that the minimum payments – starting at about half their existing level – had been set to reflect expected seasonal trading peaks and dips.
The next amount due is £900,000 in December, followed by £600,000 at the end of June next year. Repayments are scheduled to rise later in the decade and continue until 2046.
The committee unanimously backed the new terms.
Seduced by the success of the London eye, the council put up £36 million to bank roll the project. With no commercial interest in financing this at the time, the city has been left with a white elephant for at least the next 20 years and is owed near on £47 million and counting.
Are these councillors so deluded to ever expect the city to see this money any time soon, even bizarrely proposing that they should be given more time to pay if unable. Utterly unbelievable. I could only wish that they ran my electricity and gas company right now.
Still, if the city can ever afford to wine and dine again, we may get our money back sooner. However, I fear that’s going to have to be a lot of humble pie.
Not quite correct, a business were in fact interested in this project but pulled out at the last minute. That should have rung alarm bells to the council but they decided they would take it on.
What is needed is a thorough and independent investigation into how this disastrous project was ever allowed to start in the first place. If is time councillors faced reality. Ineptitude and dodgy dealing by bhcc and councillors has saddled the local taxpayer with debt. It is time that those accountable were taken to task
Whilst that area around West Pier was derelict it did not need to have the i-360 to be improved. It is specious economics to suggest the i-360 was the saviour. The “enabling developments” seem to be the only thing which keep the Shaft up…
I can’t see how the Council were “seduced” by the London Eye as at the time we had our own Big Wheel. Unfortunately that was removed to let the i360 be built without competition.
This is a terrible photo of Tom. The numbers predicted were way off. The ticket prices are too high, the footfall numbers were low before COVID hit.
Plus, this thing is ugly.
It is bad enough that it is the most hideous feature of Brighton, but the experience of being on it’s “flight” is distinctly underwhelming. Half of the 360 degree view is of the sea, while the city (that’s a laugh for a start!) has very few landmarks to see from up there. It is a totally boring waste of 20 minutes, and expensive too. Still, in years to come, while the debt continues to mount up, it will be a symbol, and a reminder to future generations, of the most incompetent and deluded council we have ever known.
Plus the frequent sea fogs, HG – you forgot them. Imagine how you would feel as a family of, say, four, who came down on the train (if there were any) from London for a nice day out in Brighton and a trip up the doughnut, only to find a sea fog. Don’t know if the doughnut gives fog refunds, but the family would already have spent a lot just getting here and having a bit of food.
I once knew some people with a very top-floor flat and balcony in Edward Street, who had a far better view all round the city than this. Sadly, they are no longer there, or even alive, but a jazzed-up (and safe) scaffolding tower with lift slightly inland would do a better, and almost cost-free, job. I haven’t been up the doughnut because I can’t figure out what there actually is to see from up there – even on a clear day. Does anyone know?
I can’t figure out what there actually is to see from up there – even on a clear day. Does anyone know?
Approximately https://youtu.be/of9-K22bov0
You see the tops of the surrounding buildings. Big deal!
More public relations spin from i360 Ltd and the company that spins for them (at our expense!). No mention of the £10Million that is already owed by i360Ltd to the Council. Unfortunately, there are likely to be more losses from the i360 for years to come. The decisions to publicly fund the i360 were also made in secret and there was no support for it from the public. By the way, the Public Relations Company that spins for the i360 also admitted to doing “dirty social media” on their previous website. Publicly funding “dirty social media”?!
Helen you are not entirely right.
I listened to David Marks’ begging speeches & the cttee mtg agendas gave the arithmetic AND WARNED OF HIGH RISK. He never had more than half the needed finance to put the i360 up as I recall as pledged money to build. As soon as BHCC topped up the shortfall, his ‘investors’ pulled out. Eventually he came back with his begging bowl and in spite of ‘high risk’ warning the Greens & Tories voted to assume almost 100% liability to lend almost the total amount to Marks Barfield