Today is the one year anniversary of Brighton and Hove City Council agreeing the funding package for the Brighton i360, so it seemed as good a time as any to review the details.
However, it is Friday and the sun is out, so instead of writing at length about the funding and financial implications, we thought it better to address a few key points, while also dispelling some of the myths surrounding the project and who is paying for it. That way you can get to grips with the facts and get back to enjoying the gorgeous weather without first drowning in a sea of figures and financial terminology.
So, here goes:
How much is the Brighton i360 going to cost?
The overall cost of the project is £46 million.
That is quite a hefty figure. Where is it all coming from?
The project is funded through a public-private partnership, or PPP, meaning money is coming from different areas.
Firstly, the founders of the i360 are stumping up a significant amount themselves. They are contributing £6 million of their own money to the project. If that does not show how committed they are to making it a success, we’re not sure what does. It also proves how confident the team is that the i360 will be a massive long-term success.
The next chunk of funding comes from Brighton and Hove City Council. The local authority has taken advantage of national government loans made available to councils by the Public Works Loans Board. Basically, the council has acted as a middle man to secure a £36 million loan for the project.
That seems like a lot of money…
Hang on, we’ve still got one funding stream to explain yet. The last £4 million for the scheme comes in the form of a loan from the Coast to Capital Local Economic Partnership. As you can see, there are a lot of people from different organisations who are confident the i360 will be a success.
But that loan from the council? Couldn’t it have been spent on children’s centres or social care?
In short, no. The £36 million coming from Brighton and Hove City Council is not from the authority’s own funding pot. It isn’t local tax payers money and it wasn’t a case of spend it on the i360 or paying for children’s centres, schools or social care. The money comes from Public Works Loans Board which only funds projects with a commercial return. Projects like the i360. If the loan had not been earmarked for the i360, it simply wouldn’t have been coming to Brighton and Hove. It is a financial bonus boost for the city and the fact the council was able to act as a middle man means it will benefit from a significant income each year because the loan will be repaid in full and with interest.
How significant is significant?
Well, the profit on the interest from the loan and the business rates which the i360 will pay will earn the council more than £1 million a year. The good news for local people is that that is £1 million a year which the council CAN spend on whatever it likes. £1 million a year which WILL be reinvested in the city. With local authorities having to cope with funding cuts, this additional income will no doubt prove very welcome at Brighton and Hove City Council and help support an array of local services.
Will the council make any more than that £1 million?
Yes, a minimum of 1% of all the i360 ticket revenues gets paid to the city to be spent on the seafront. And the i360 will keep paying that even when the loan is repaid.
We also have a ‘cash sweep’ mechanism that means we repay excess profits back to the Council. According to our business plan we expect to repay the 27 year loan after 18 years.
Plus a percentage of the scheme’s revenues is also paid to the West Pier Trust to help fund some of the group’s ambitious future plans, which include a new heritage centre on the seafront.
Some people have said all that sounds too good to be true. What happens if the i360 doesn’t make enough money to pay back the loan? Will local people not have to foot the bill?
We are very confident that the i360 will be a huge success. Independent research has shown the i360 is likely to attract around 700,000 visitors a year (more in the first year) but the numbers needed to make the loan repayments are far lower – around half of that estimated figure. So there is a buffer built in.
Wow, that sounds like a lot of visitors, how are they going to do that?
As a comparison, the nearby Royal Pavilion attracts around 350,000 visitors a year so we are expecting around double that. Observation attractions such as the London Eye or the Empire State Building are enormously popular.
The London Eye gets around four million visitors a year and is still the UK’s most visited paid-for attraction. It gets more than double the number of visitors of all the other famous paid-for attractions in London such as the Tower of London, Madame Tussaud’s or the Houses of Parliament.
But we aren’t London. Is that realistic?
Indeed that is why we are expecting 700,000 visitors not four million. Independent experts came up with our visitor numbers who have a track record of predicting the right number for new attractions. They have taken account of the size of the market here in Brighton – the number of tourists already visiting (c 10 million).
We have a huge local catchment with 30% of the population of England living with a two hour travel time of Brighton, which is the catchment area for an attraction of this type.
We’ll also draw new visitors to Brighton due to the nature of how exciting the i360 is.
We are creating something unique, a world first for Brighton. Brighton i360 will be the world’s tallest moving observation tower and is brought to you by the team who created the London Eye. The team are experienced attraction operators. They are not passively hoping they’ll get lots of visitors but are actively out securing travel trade partners and marketing the i360 and Brighton to the international and domestic markets to make sure it happens.
That extra money for the council will be very welcome, but what benefits will the project have to the city in general? Presumably there is a predicted knock-on effect for other businesses?
Indeed there are. Of the estimated visitor numbers, a significant number will be people coming to Brighton and Hove for the first time.
The i360 will be an invaluable marketing tool for the city and encourage more and more people to spend time here. That is good news for hotels, other attractions, local shops and eateries.
Success for the i360 means success for other local businesses.
The i360 will generate 440 permanent jobs in the local economy and conservative estimates suggest the attraction will inject as much as £25 million of additional revenue into the city every year.
It will also offer discounts for local residents, free entry to children attending a state school in Brighton and Hove and much, much more. To read all about the 26 ways the i360 will benefit the city, please read HERE. It really is a win, win for the city of Brighton and Hove.