Background: How Scarborough’s Alpamare developer went into administration

This included a £9m council loan in 2013 to ensure the Alpamare water park’s completion following setbacks attributed to the 2009 economic downturn.

Earlier this month Alpamare UK announced a temporary closure until spring next year but since then administrators have been appointed to run the company.

Many questions remain about potentially lost jobs, impact on the local economy, a possible reopening, and £7.8m of the loan that remains unpaid – but this is what we do know.

Benchmark Leisure and the company’s leadership were contacted for comment but they did not respond by the time of publication.

North Bay rejuvenation

When Scarborough Borough Council (SBC) entered into the controversial Sands Development agreement with Benchmark Leisure Ltd in 2002, the authority had high hopes for a project that would “be considered a major magnet for tourists outside of Yorkshire” to visit the town throughout the year.

It provided for the development of 55 acres of land and in addition to the water park, plans were made for a cinema, restaurants, and flats where the former Atlantis water park once stood.

The first development phase was the seafront apartments and commercial units at Kepwick and Lockton House as well as beach chalets located on the promenade which were completed in July 2008.

Following the council’s £9m loan in 2013, Alpamare UK opened in 2016 with the development of a Premier Inn hotel next to the water park approved and constructed a few years later.

However, the cinema proposal had stalled since 2017 and when the Labour-led administration took over the council it decided to end its agreement with Benchmark in 2021, with a new plan for a town-centre cinema receiving approval earlier this year.

The council admitted that the Sands Development “stalled at various stages” as the economic climate and leisure market changed and said that “new proposals by Benchmark were no longer acceptable “in form or principle to the council”.

Despite a last-minute legal challenge by Benchmark, SBC’s cabinet rejected the developer’s proposals and in March 2021 voted to end the Sands Development.

Possible council takeover

Following April’s local government reorganisation and the merging of borough and district councils, the new North Yorkshire Council became responsible for agreements made by SBC including the remaining £7.8m of unpaid loan.

MP for Scarborough and Whitby, Sir Robert Goodwill has expressed hopes that the council could take over the site, adding: “The council will now have control over much of that land and can maybe bring forward new projects to improve the offering for tourists and locals and try and salvage something from this situation”.

The possibility of a council takeover of Alpamare has been raised on several occasions in the past when financial issues have arisen at the water park.

In 2019 a winding-up petition was issued against Alpamare UK by creditor British Gas Trading Ltd over an unpaid bill of approximately £700,000.

At the time, councillors raised concerns about the repayment of the £9m loan which was branded as the “council’s biggest liability”.

However, officers assured members that “if, for example, Benchmark were to breach their legal conditions we would get the water park back”.

A similar situation arose last year following a legal dispute between Scarborough Council and Benchmark over rent repayments from the Covid-19 pandemic.

At the time, a council spokesperson told the LDRS: “Under the terms of the water park lease Benchmark still has the opportunity to buy the water park.

“This is subject to the company repaying the £9 million loan it was provided with for the water park development in full.”

Administrators have described the situation as complex and concerns have been raised about a potential division of the firm’s assets, but at this stage, the future of the site remains unclear.