Scarborough Cinema: Developer Benchmark claim council 'acted in bad faith' over North Bay plans as legal challenge mounted

The developer responsible for regeneration projects in Scarborough's North Bay has launched a renewed legal challenge, claiming the borough council acted in "bad faith" when it broke off a deal for a new cinema complex.

By George Buksmann
Thursday, 26th May 2022, 12:32 pm

Benchmark, the company behind the Open Air Theatre, Alpamare water park, The Sands apartments, beach chalets, Premier Inn and the Tunny Catch pub, said their attempts to further develop the North Bay were "deliberately thwarted and frustrated" after the Labour-led council came to power in 2019.

It follows a decision by Scarborough Council's cabinet in early 2021 not to renew a Development Agreement with Benchmark, which was set to lapse on December 31 2020.

A spokesperson for Scarborough Council said the authority "acted legally" in allowing the agreement to terminate and "we refute the allegations now being made by the company more than a year later".

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An artist's impression of what a cinema complex could have looked like in Scarborough's North Bay. (Photo: Benchmark Leisure)

They added: "As part of our ambitious masterplan for Scarborough, North Bay presents us with the single largest leisure development opportunity in the borough, which we need to move forward with."

New chapter for cinema saga

Scarborough Council had intended to let its agreement with Benchmark expire in December 2020, before the company made a last-minute offer to repay an outstanding £8.5m loan to the authority.

Benchmark was responsible for building the £14m Alpamare water park, which was partially financed by a £9m unsecured loan from the council.

The new North Bay Premier Inn opened in 2021 after delays caused by the pandemic.

The water park was dogged by problems – including a delayed opening in 2016 – after British Gas brought a winding-up petition against Alpamare over an unpaid £700,000 bill, with creditors securing a Company Voluntary Arrangement to stave off the risk of collapse.

However, three iterations of plans by Benchmark for a cinema, restaurants and flats where the former Atlantis water park once stood have repeatedly stalled since 2017.

Scarborough Council originally granted planning permission for Benchmark to build a cinema, car park and restaurant complex in 2015 with the leisure development scheduled to open in 2018. That was first delayed to 2019, then 2020, before – seemingly – being scrapped for good in March 2021.

The authority ultimately chose to break off its deal with Benchmark at a behind-closed-doors meeting in February 2021, after declining to approve the developer a five-year extension for what is known as the Sands Development.

The North Bay's beach chalets, top, and The Sands apartment complex, which has just had permission for new penthouses approved.

The council's leader, Cllr Steve Siddons, has previously made it no secret of his preference for a cinema in the town centre, rather than the North Bay.

As leader of the opposition, he called on the council to go back to the drawing board in February 2019: "When the plans were first released, Labour insisted the cinema should be built in the town centre in accordance with planning rules."

In November 2019, as council leader, he said: "Just because the latest plans have been approved does not mean this cinema will be built soon, if at all. This is the third time the developer has promised progress.

"Personally, I have always said that an out-of-town site is the wrong place, especially for a council declaring a Climate Emergency."

The council granted Benchmark a £9m unsecured loan to partially finance the Alpamare water park.

Fresh legal challenge over axed deal

Benchmark told The Scarborough News this week that, via their lawyers, they have issued a formal letter before action to Scarborough Council. They claim the authority "refused to allow the Development Agreement to continue to allow Benchmark to complete all of the development sites as agreed".

A statement says: "Benchmark contend that the council have acted in bad faith and are insisting that the council reinstate Benchmark as the developer of the remaining sites, rather than spending time and public money in appointing a new developer, and to act in good faith with Benchmark to agree a new masterplan for the remainder of the land."

The developer has lodged notices with the Land Registry to protect its rights to undeveloped sites per the agreement.

At this stage, it is not clear which areas of land the developer has rights to. However, as part of the previous agreement Benchmark had rights to the land of the former indoor swimming pool, which has just been demolished, and a 35-year lease for the Alpamare site and car park.

A spokesperson for Benchmark said: "It has been the council's delay and failure to provide approvals and decisions that has meant that nothing has been built on the North Bay site since the Premier Inn Hotel in early 2019.

Scarborough's Open Air Theatre, a benchmark project, and the former Atlantis water park site as it looks today.

"Benchmark was reluctant to involve lawyers in this matter, but the cabinet and executive have refused to engage in discussions and do not seem concerned about the cost of legal proceedings or the fact that any further development of the North Bay site will be on hold pending resolution of the dispute."

Plans for the cinema complex and the Alpamare water park were previously approved under Conservative administrations.

The town's new 105-bedroom Premier Inn hotel opened its doors in March 2021 after pandemic-enforced delays.

Plans to install nine penthouses on top of The Sands at Peasholm Gap were approved earlier this month.

Cllr Siddons was contacted for comment but did not reply.