The £36m i360 set to go ahead

[symyjym]

£36m loan......who pays this back? Must be around £50m once interest is added on.

I've pulled this

From the 2012 report approving the previous £17.8 million loan: “The Council loan will now be capped at £17.8m and the LEP contribution will remain at £3m. The remainder of the funding will, as previously agreed, be contributed by the Equity providers, who will fund £20m of the total project cost and (as previously) carry the greater risk burden....The council will be committed to repaying the loan, together with all interest accruing thereon.”

The Council is charged 4% interest on the government loan and is lending the money onto the i360 company Marks Barfield at 7.8%, thus making a profit.

My thoughts are that if the project fails to draw the projected footfall, it would be quite easy for MB to go bankrupt, and leave the loan payment with the local tax payer.

I just hope they are confident with the projections because if the i360 was up and running with the weather we have had over the last three months it would hardly have been used.

The Argus reports it as being a £36m loan so I cannot be sure if this is the case or an Argus blunder?

 

[symyjym]

Does anyone know how many people use the Brighton Wheel annually?

 

[Landgull]

www.theargus.co.uk/news/11037092.i3..._Hove_Tories_join_Greens_to_offer___36m_loan/

I kind of saw the reason for the Brighton Wheel, but I don't see the point of this at all. Just seems like a huge waste of money.

I couldn't even see the reason for the wheel. Both a waste of money.

 

[The Large One]

This from the 'Business Forum and the Economic Partnership in Brighton & Hove'

i360: Grab this opportunity with both hands

The Economic Partnership urges the council’s Policy & Resources committee to agree the funding for the i360 which is not only a fabulous potential addition to Brighton’s tourism offer but also exactly the sort of business deal that the city council should be seeking to offset reduced public sector funding.

The i360 will be one of the most advanced visitor attractions in the world, built by the team behind the hugely successful London Eye. The local authority is being asked to borrow money cheaply from the Public Works Loan Board and lend it at a profit to the i360 company.

The deal will deliver a return to the council £1m in one-off fees, £1m per annum plus 1% of the ticket sales and half of the business rates [the government keep the other half].

Like all councils, Brighton & Hove is faced with massive cuts in its funding from central government; £100m over the next four years. When it has cut everything to the bone, if it is to stand any chance at all of providing more than just social care and refuse collection, it has to start generating huge amounts of additional income. That means entering into commercial agreements to deliver a profit. That is the reality of the new public sector landscape. It is the new normal. This, for instance, is the only way that money will be generated for things like the repair of the seafront arches estimated to cost something in the region of £70m.

Like any commercial venture there will be a risk factor. You don’t earn a profit without taking risks. But the i360 is an exceptionally good risk. The Business Plan, which has been seen by the Economic Partnership and has been independently verified, explores a range of financial scenarios and market projections and paints a picture of a project that is financially sound, exceptionally well planned and pragmatic in its projections. Visitor numbers, which are based on realistic comparisons and assumptions, would have to fall by more than half before the council’s loan was at any risk.

Detractors suggest that the proposed visitor numbers of 700,000 - 822,000 per annum are unrealistic. But with a resident visitor catchment in excess of 15m people and a tourist market of 7m [and increasing] the projections are robust and achievable. If the attraction operated at only 50% capacity for only eight hours a day [which it won't] it would comfortably exceed the target.

Comparisons with Portsmouth’s Spinnaker Tower are spurious other than it also makes a profit and its construction was delayed, although for entirely different reasons. The Spinnaker was delayed largely because of design issues trying to marry 14,000 tonnes of concrete with 1,200 tonnes of steel on site. The i360’s delay was due to the financial crisis of 2008 and any construction delay once work starts will be minimized by the structure being much simpler to build and most of its component parts being manufactured off-site.

Other than that, the comparisons are weak. Portsmouth is simply not a tourist destination to compare with Brighton and even the location of the Spinnaker within the city is poor compared to the i360’s prominent seafront site minutes from Brighton city centre.

The i360 is one of those developments, like the Brighton Centre thirty years ago, that demonstrates vision and ingenuity on the part of the city’s leaders. Since the revenue that it will generate has also become an essential element of public sector finance, we are lucky to have a developer that wants to build it in Brighton and a elected members prepared to support it. We should grab this opportunity with both hands.

 

[Stoichkov]

http://thelatest.co.uk/brighton/201...led-with-final-bill-now-more-than-46-million/

£46 million now. I think this is one of the issues - these things can get out of hand...

 

[symyjym]

This from the 'Business Forum and the Economic Partnership in Brighton & Hove'

i360: Grab this opportunity with both hands

The Economic Partnership urges the council’s Policy & Resources committee to agree the funding for the i360 which is not only a fabulous potential addition to Brighton’s tourism offer but also exactly the sort of business deal that the city council should be seeking to offset reduced public sector funding.

The i360 will be one of the most advanced visitor attractions in the world, built by the team behind the hugely successful London Eye. The local authority is being asked to borrow money cheaply from the Public Works Loan Board and lend it at a profit to the i360 company.

The deal will deliver a return to the council £1m in one-off fees, £1m per annum plus 1% of the ticket sales and half of the business rates [the government keep the other half].

Like all councils, Brighton & Hove is faced with massive cuts in its funding from central government; £100m over the next four years. When it has cut everything to the bone, if it is to stand any chance at all of providing more than just social care and refuse collection, it has to start generating huge amounts of additional income. That means entering into commercial agreements to deliver a profit. That is the reality of the new public sector landscape. It is the new normal. This, for instance, is the only way that money will be generated for things like the repair of the seafront arches estimated to cost something in the region of £70m.

Like any commercial venture there will be a risk factor. You don’t earn a profit without taking risks. But the i360 is an exceptionally good risk. The Business Plan, which has been seen by the Economic Partnership and has been independently verified, explores a range of financial scenarios and market projections and paints a picture of a project that is financially sound, exceptionally well planned and pragmatic in its projections. Visitor numbers, which are based on realistic comparisons and assumptions, would have to fall by more than half before the council’s loan was at any risk.

Detractors suggest that the proposed visitor numbers of 700,000 - 822,000 per annum are unrealistic. But with a resident visitor catchment in excess of 15m people and a tourist market of 7m [and increasing] the projections are robust and achievable. If the attraction operated at only 50% capacity for only eight hours a day [which it won't] it would comfortably exceed the target.

Comparisons with Portsmouth’s Spinnaker Tower are spurious other than it also makes a profit and its construction was delayed, although for entirely different reasons. The Spinnaker was delayed largely because of design issues trying to marry 14,000 tonnes of concrete with 1,200 tonnes of steel on site. The i360’s delay was due to the financial crisis of 2008 and any construction delay once work starts will be minimized by the structure being much simpler to build and most of its component parts being manufactured off-site.

Other than that, the comparisons are weak. Portsmouth is simply not a tourist destination to compare with Brighton and even the location of the Spinnaker within the city is poor compared to the i360’s prominent seafront site minutes from Brighton city centre.

The i360 is one of those developments, like the Brighton Centre thirty years ago, that demonstrates vision and ingenuity on the part of the city’s leaders. Since the revenue that it will generate has also become an essential element of public sector finance, we are lucky to have a developer that wants to build it in Brighton and a elected members prepared to support it. We should grab this opportunity with both hands.

I hope the Business Forum and the Economic Partnership in Brighton & Hove are confident that the cost of the project will be fixed at £39m. It wouldn't look good on them if it was anything other than bang on budget.

 

[symyjym]

http://thelatest.co.uk/brighton/201...led-with-final-bill-now-more-than-46-million/

£46 million now. I think this is one of the issues - these things can get out of hand...

Wow the cost has gone up as I was writing my previous post.

 

[Bold Seagull]

The architectural community is starting to get excited….

http://architizer.com/blog/get-ready-for-the-worlds-next-sky-high-observation-spindle/

 

[BigGully]

Brilliant, the problem with big projects like this is the sums very rarely offer reason for it to go ahead, this will be exciting and great for the City.

 

[Munkfish]

In what shape or form does this fit in the with seafront or the city?

I dont care how it is going to be funded, but this thing is just a bloody eyesaw.

 

[Billy the Fish]

Did that article make anyone else wonder about their height to girth ratio?

 

[Bold Seagull]

In what shape or form does this fit in the with seafront or the city?

I dont care how it is going to be funded, but this thing is just a bloody eyesaw.

I think you have come up with a new concept there. The new 'Eyesaw' is like a giant see-saw with pods at either end so each takes a turn at getting a great view!

 

[Munkfish]

I think you have come up with a new concept there. The new 'Eyesaw' is like a giant see-saw with pods at either end so each takes a turn at getting a great view!