The council’s cabinet decided in a behind closed doors session last week not to renew its development deal with Benchmark Leisure Ltd and instead will start again with a new vision for the town’s North Bay.
Scarborough Council had intended to let its agreement with Benchmark expire on December 31 before the company made an eleventh hour offer to repay an outstanding £8.5m loan to the authority.
Benchmark had previously been responsible for the £14 million Alpamare water park built in North Bay, made possible by a £9 million loan from the council, and had also overseen the building of a pub and Premier Inn hotel on the same site.
However, the plan for a cinema, restaurants and flats where the former Atlantis water park once stood has repeatedly stalled since 2017.
The company has now hit out at the authority and its leader, Cllr Steve Siddons, and said it will look to recover its losses from the council.
In a statement Benchmark said it was “surprised” by the decision and had expected a four month extension to be agreed.
A spokesman for the company said: “Benchmark’s solicitors are now pushing the council to supply copies of the confidential reports that Benchmark can only assume informed this decision.
“Benchmark has been in negotiations with the council for many months and has been prepared to compromise on a number of issues, not least by agreeing to repay the balance of the water park loan 30 years early, to ensure the agreement was extended.
“Whilst the council – wanting the water park built – lent Benchmark just under £9 million of the £16 million costs of the water park Benchmark have, over the period of the development agreement, paid over £7 million direct to the council and handed over to the council, at no cost, the £1 million plus award-winning Beach Management Centre.”
The company said it spent £800,000 subsidising the Alpamare water park during the pandemic and that it had previously agreed with the authority that the predominantly loss-making developments of the project would be carried out first with “the clear promise of future profits” from the other elements of the Sands Development to come.
Benchmark says it will now look to recover money from the council if the agreement is not extended.
A spokesman added: “The figure spent by Benchmark to deliver these unprofitable elements to date amounts to around £12.5million and the council are on notice from Benchmark’s solicitors that if the agreement is not extended to allow this money to be recovered Benchmark will look to the council for that money.”
The company also said it was “somewhat disingenuous of [Cllr Siddons] to blame Benchmark for not delivering the multi screen [cinema].
Cllr Siddons has long been an advocate of building a cinema in Scarborough town centre rather than in the North Bay.
Instead, it laid the blame at the feet of the council saying it had been “frustrated” in its efforts to draw down the cinema land and from selling the Premier Inn hotel on the Alpamare site.
In response to Benchmark’s claims, Steve Siddons said: “While I have previously expressed my personal disappointment at the slow progress of the cinema development, I have never sought to apportion blame. Benchmark has had planning permission for the cinema for at least three years so I don’t think being disappointed is unreasonable.
“Mindful of the confidential nature of our financial agreements with Benchmark, I will be working with officers to respond directly to the company on the other points raised.
“However, I would like to make it clear that we do not agree with the stance taken by Benchmark as to how elements of the development have progressed and how we’ve dealt with them.”