Councillors asked to agree year-long deferral of i360 loan repayments

i360, Brighton
i360, Brighton

A £3 million shortfall in i360 loan repayments is predicted in the next four years by financial experts.

GVA, hired by Brighton and Hove City Council to review the £36.2 million loan to the tourist attraction’s operators, said in a report that the i360 would be unlikely to be able to make sufficient repayments until 2022-23.

A year-long break in i360 loan payments is expected to be formally agreed by leading councillors on the policy, resources and growth (PR&G) committee agenda when it meets later today (December 6).

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The committee is being asked to defer the £880,000 due at the end of December, as predicted by GVA in an earlier report to councillors two months ago.

This would mean an outstanding total of almost £1.5 million towards the £36.2 million loan which was brokered by the council from the Public Works Loan Board.

In June, the same committee agreed that the i360 could defer £570,000 of the £1.5 million due at the end of June until the end of December.

The i360 paid the council £922,000 in June to enable it to pay the Public Works Loan Board the same amount.

Since then the i360’s executive director Steve Bax has resigned. He has been replaced by former London Eye boss, David Sharpe, who spent several years working for Merlin Entertainments, which now owns and operates the London Eye as well as Madame Tussauds and the London Dungeon.

Mr Sharpe joined the London Eye at a similar stage and when it faced similar problems.

He is credited with helping to turn round its fortunes before Merlin, owner of the Sea-Life Centre, bought the London attraction from architects Marks Barfield who also created the i360.

A report by GVA going before the committee said: “The business plan forecast indicates that the financial performance of the attraction could be improved through a 75 per cent increase in visitor numbers over the next eight years where a more comprehensive marketing strategy is implemented.

“While this is a significant uplift in forecast visitor numbers from what is currently seen, it is a partly a reflection of the current under-performance of the attraction against (marketing consultant) LDP’s expected market penetration averages.”

Until October next year, the i360 loan repayment and interest is proposed to be deferred and then restructured.

Since the i360 opened to the public in August 2016 it has carried more than 750,000 visitors, significantly fewer than projected.

It has also generated approximately £2.4 million extra income for the council which has been or will be reinvested in the seafront.

The extra cash has been put towards landscaping land around the i360, the refurbishment of the Madeira Terraces and festoon lighting along the seafront.

Marketing consultants Leisure Development Partners, which previously advised the owners or operators of the Eiffel Tower and the Palace Pier, is putting forward a new marketing plan.