Rescue Plan Agreed For Indebted Brighton i360

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.