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Agenda item

PROVISION OF A LOAN TO BLACKPOOL ENTERTAINMENT COMPANY LIMITED

To consider a loan request from Blackpool Entertainment Company Limited (BECL) towards continuing renovation of the Winter Gardens.   

 

(The Appendices to this item contain commercially sensitive information which is exempt from publication by virtue of Paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972).

Minutes:

(The press and public were excluded during the parts of this item where Appendices 3a and 3b were considered).

 

The Shareholder Committee considered a loan request from Blackpool Entertainment Company Limited towards continuing renovation of the Winter Gardens. The loan had been requested to allow for the upgrading of essential infrastructure such as lifts, toilets and other fixtures and fittings but also to facilitate investment in revenue enhancement projects.

 

The Shareholder Committee noted that the Council’s Business Loans Fund Panel had considered the loan case and recommended approval of the loan taking into account all due diligence.  The Business Loans Fund Panel had recommended a number of conditions which were outlined in Appendix 3a to the report notably an interest rate reflective of the market conditions, a repayment term and reporting arrangements with any major deviations to be reported immediately and regular reports on accounts to be presented o the Loans Panel and the Shareholder Committee.

 

In response to questions from the Committee, Mr Alan Cavill, Director of Communications and Regeneration and Mr Steve Thompson, Director of Resources, both confirmed that they had been part of the Loans Panel meeting that had considered the application. Both Mr Cavill and Mr Thompson confirmed the view expressed in the report that the loan represented a suitable application when considered against the Council’s approved  Business Loan Scheme Guidance and that the conditions outlined would provide the necessary safeguards for the Council’s position. Mr Cavill emphasised his view that the spending encompassed a wide range of areas where investment was required notably the combination of defensive spend to proactively reduce future maintenance requirements and investment to increase spend per visitor including reducing the underutilisation of existing space. Mr Thompson explained the phasing of the investment allowed the company to bring forward increased revenue, reduce any negative impact on existing income streams and allowed oversight of the investment by both the Shareholder Committee and Loans Panel. Blackpool Entertainment Company Limited had provided a Business Plan and provided indicative figures to demonstrate the expected increase in income derived as a result of the proposed works which were considered acceptable. 

 

Shareholder Committee decision:

 

1.  To approve a loan of £1,731,500 to Blackpool Entertainment Company Limited (BECL) towards renovation of the Winter Gardens, as part of its 10 year capital investment plan. 

 

2.  To approve the loan terms and conditions as set out in confidential Appendix 2a to the agenda.

 

3.  To provide delegated  authority for the Head of Legal to prepare legal documentation for the loan facility.

 

 

 

 

Reason for the decision:

 

The Shareholder Committee noted that the Business Loans Fund Panel had considered the loan case and recommended approval of the loan taking into account all due diligence.  The Panel is chaired by the Chief Executive and includes the Director of Resources, the Director of Communications and Regeneration, and the Head of Legal Services. The application met the Business Loans Fund criteria and its stated objective to promote economic development and to achieve a return on investment. The Shareholder Committee considered that in light of the expected increase in income derived as a result of the proposed works that the company would be in a position to repay the loan.  The proposed loan conditions would provide suitable oversight from the Council through the Shareholder Committee and the Loans Panel.

 

Other options considered:

 

The alternative option would have been for Blackpool Entertainment Company Limited to seek funding elsewhere for this investment but the terms were likely to be unattractive in comparison with the Council’s ability to draw down loans at comparable low rates of interest and would also need the Council’s approval for that to happen in its role as Shareholder and seeking to protect its investment.  Blackpool Entertainment Company Limited could decide to not pursue the scheme at all but that would be detrimental to longer-term investment plans and the revenue earning potential of the Winter Gardens. 

 

Blackpool Entertainment Company Limited has chosen to apply to the Council’s Loan Fund as it meets the criteria for such investment, and they have followed all financial due diligence requests required.  The Council could refuse to fund the scheme but it does meet with the Loan Fund’s stated objective to promote economic development and to achieve a return on investment.

 

The Shareholder Committee therefore concluded that these alternative options would not be acceptable to the Council’s position as shareholder.

Date of decision:

 

5 September 2022.

 

 

 

 

Supporting documents: