Alpamare waterpark could offer a discount scheme for Scarborough residents as part of its restructuring.
The attraction has said it will be changing its opening times to reduce its running costs following recent financial concerns, and a new spa is set to open at the site soon.
Nick Edwards, director of finance at Scarborough Council, told last week’s Audit Committee meeting how Alpamare found itself in trouble and what it meant for the council.
The company secured a Company Voluntary Arrangement (CVA) last month to stave off a winding-up petition brought by British Gas over an unpaid bill of approximately £700,000.
Mr Edwards said that last year Alpamare UK’s accounts were frozen and Benchmark, the developer of the water park, stepped in to operate the water park at that point.
He said 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 a £9m loan given to Benchmark by the council in 2013 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.
Mr Edwards 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.”
Benchmark also has planning permission to build a new Premier Inn hotel on the water park site but, said 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.
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.