Alpamare water park: Scarborough residents deserve answers about its problems and about the £9m loan, says councillor

Alpamare water park, Scarborough
Alpamare water park, Scarborough

Scarborough Council’s finance director has told councillors there are “checks and balances” in place to safeguard its £9 million investment in the struggling Alpamare Water Park.

Nick Edwards, director of finance at the authority, told today’s Audit Committee meeting that there were options open to the council that includes taking possession of the North Bay attraction.

He was giving an update after the operator of the £14m facility, Alpamare UK, secured a Company Voluntary Arrangement (CVA) earlier this month to stave off a winding-up petition brought by British Gas over an unpaid bill of approximately £700,000.

Read here about the winding-up petition served against Alpamare

Scarborough Council gave a £9m loan in 2013 to the developer of the water park, Benchmark Leisure, and there had been fears from residents and councillors that repayments would be in jeopardy.

Chief executive of Benchmark, Roland Duce, revealed last week that his company was also owed around £2.8m from Alpamare in its role as the landlord.

At today’s meeting, the leader of the council’s Independent group, Cllr Sam Cross, said residents deserved answers.

He told Mr Edwards: “My query is that we have a £9m outstanding loan and it is this council’s biggest liability.

“This isn’t our money, it’s the residents’ money that is at risk.”

Read here about what Alpamare boss said about the water park's future

Mr Edwards said he did not agree that the loan was the council’s biggest liability.

He said: “I think we have taken all the checks and balances to safeguard as best we can the council’s position with regards to that loan.

“If, for example, Benchmark were to breach on their legal conditions we would get the water park back. That means Benchmark would have lost the six or seven million pounds they have put into this.

“I accept that would mean we would own the water park and have a £9 million loan but we would also have the rest of the undeveloped site that we could develop that would give us back the money to pay off the loan, or the council could do an agreement with some other people.

“It has different options and I think we have those appropriate safeguards in place. There is a risk with the £9 million, I’m not getting away from that, but I think we have taken the best measure to manage that risk, accepting that is public money.”

Read here about the future opening schedule of Alpamare and its spa

He added that Alpamare would look to reduce costs by reducing its opening hours in the winter and was also looking at offering some form of local discount scheme.

Mr Edwards also said that a wellness spa, that had been proposed since the water park opened in 2017, could finally come online in February.

He also filled in the councillors on how Alpamare found itself in trouble and what it meant for the council.

Mr Edwards said that last year Alpamare UK’s accounts were frozen and Benchmark then stepped in to operate the water park at that point.

He said that at this point, that move triggered a bond in the loan agreement that Benchmark has to pay the council £580,000.

Mr Edwards added that Benchmark cannot draw any profit from the wider Sands development, which also includes a new hotel and a cinema development, until the £9m loan had been repaid.

He told councillors that all loan repayments had been made on time until December 2018 which was missed and the council was now looking to recover that sum and the £580,000 bond payment.

Benchmark also has planning permission to build a new Premier Inn hotel on the water park site but, according to Mr Edwards, work cannot start until the spa has opened and all outstanding money has been paid to the council, including the £580,000.

However, he revealed that Alpamare’s CVA deal was to repay creditors at a rate of 16.7p for every £1 owed.

As part of this, the council will take a loss on outstanding business rates owed to it by Alpamare.