The council is preparing to write off a debt of more than £51 million owed by the i360.
The move is aimed at clearing the way for a bidder to buy the viewing tower on Brighton seafront and reopen it.
The administrators of the i360 said that it would not be possible to sell the tourist attraction unless Brighton and Hove City Council writes off the money owed.
The council’s cabinet is expected to agree to wipe out the debt at a meeting next Thursday (23 January) but to ask for a percentage of future revenues.
A report to the cabinet said: “It is a condition of the preferred bidder’s offer that the assets they acquire are unencumbered.
“The city council retains the ability to decline releasing security on its loan if it does not feel this is the best offer available.
“This, however, would have the effect of making the asset unsellable and would result in blight on the seafront.”
The Labour cabinet also plans “to commission an external independent investigation to understand the circumstances of and lessons from the council’s original decision to loan public money to deliver the Brighton i360”.
Although the sum to be written off is more than £51 million, the amount that the council must repay to the government by 2041 is smaller.
The council brokered the loan from the Public Works Loan Board – and still owes £32 million or about £2.2 million a year over the next 16 years.
Despite hopes of a revenue-sharing arrangement, the council’s financial plans do not include any potential payments from the potential future operator.
The report to cabinet said that the directors of i360 Brighton Limited would “not benefit from the transaction”.
It added: “Shareholders have sunk equity and loans into the attraction that they will not recover.”
Three rounds of marketing have taken place. Two unnamed bidders have been in talks with the administrators but the debt is the stumbling block.
The report to the cabinet said: “The (preferred bidder) has been able to offer more assurance than the second bidder about their plans for the attraction, their experience of running large-scale leisure attractions and have more financial backing.
“This all assures the council that they are more likely to keep the attraction running, which is important given its prominent location on Brighton seafront, the employment involved and the impact on surrounding businesses.”
The administrators, Stephen Absolom and William Wright, both from specialist firm Interpath, took over the site on Friday 20 December and closed the business, with more than 100 staff losing their jobs.
The cabinet is due to meet at Hove Town Hall at 4.30pm next Thursday (23 January). The meeting is scheduled to be webcast on the council’s website.
Scandalous that the Council Tax Payers of Brighton and Hove are left with a massive DEBT from this, following the decision of the Green Party Councillors (with Tory support) to put £40.2 MILLION into this loss making scheme
There are so many useful projects where this money could have been invested, including the Madeira Arches/Terraces, essential infrastructure and much needed Social Rent homes.
Unfettered greedy boomerism.
The council money came from a government public works loan. They were encouraged to bring more visitors to the area, pushing up business income pushing up rates to the council coffers. This was after the Tory government changed the rules so council income wasn’t pooled nationally anymore (helping the rich get richer and the poor poorer)
There were stipulations on what the loan could be applied for and wouldn’t have been granted for Madeira drive.
Incorrect, the council had choices to either refurbish the terrace’s or Valley Gardens, it choose VG then tried getting funding for MD at a later date.
And of course all this would be “managed” by the council, debt recovery has somehow appeared as a solution on future earnings ??? question is who would doing the accounts fir future i360 ?? bit niffy
If it’s that easy, why not just wipe all council debt out and start again? How shocking that a private company should get this privilege but not the public taxpayers, who are expected to suffer constant cuts to services, despite council tax hikes each year!
Should have done this years ago when the debt was smaller. Now start saving for the demolition cost when the next company goes bankrupt
Looks like a win for everyone except the Council Tax payers of the City. All this for something most people never wanted in the first place. Disgusting!
To be fair the current status was predicted by many, in reality nobody has any real influence on the council once they’ve made their minds up to throw taxpayers money into the English Channel, or across it, French and Dutch material in that project.
Typical of an incompetent council that can just dismiss £ 51,ooo.ooo.ooo million pounds it goes to to show that there is nothing as sacred as a local voter,the council at the time were told by the locals and those of authority it would be a white elephant,.THE HUSBAND AND WIFE TEAM,whom kept on about it,and made it happen ought to be accountable, as is always the case,,distance seems to be the answer here!!!Every council that has been in place,has wasted millions upon millions, councillor Morgan sold of the facility down grand Avenue for a mealy £12,million then spent all of that money on refurbishment of hove town hall ,and some!! dose nt anyone else think that’s like putting a square peg in a round hole where did it all go they certainly didn’t rip it and strip it,Mr Morgan may have been a descendant of black beard, someone,,the tax PAYER was definitely robbed up
So they’re wiping out the debts to re-run a project that never worked in the first place? Unbelievable!
And these clowns want to merge with East and West Sussex Councils under a mayor? As someone living in WSCC, I want to stay as far away from this parade of incompetent buffoons as I can, thank you very much!
No the idea is to wipe the debt so the thing can be sold off to a private buyer, who could then run it at their own costs.
This is a total disgrace, I am not aware of anybody who wanted it , wants to keep it or thought it would be viable. There needs to be a public inquiry and the Greens and Torys held to account. Try to sell it to another city or country or sell it for scrap. We are only delaying the inevitable, a glass lift on the Sussex south coast is never going to make a profit
Anď the idiott Brighton ratepayers will continue to vote Tory,Labour,Lib-Dem. Not very bright are they..
Rather than wipe out the debt, why not just sell it to the highest bidder and take what you can. The highest bidder may be a case of dismantling it and setting it up elsewhere.
Finally, what would it raise for scrap?
Absolutely disgusting, schools in the area are understaffed , and there is a job freeze as no money ! The madeira terraces are falling apart and don’t get me started on the bailiffs that arrive when behind with Council tax !!
THIS IS DISGUSTING , ABSOLUTELY DISGUSTING THAT MONEY COULD HAVE BEEN PUT TO MORE CYCLE LANES AND ACCOMODATION FOR THE ILLEGALS 51 MILLION WRITTEN OFF BUT GET BEHIND WITH YOUR COUNCIL TAX PAYMENTS AND BHCC WILL PURSUE YOU TO THE ENDS OF THE EARTH