Dolphin Square car park lease is 'costing taxpayers'
PUBLISHED: 07:00 21 September 2015
NORTH Somerset Council has paid Dolphin Square's developers £1.2million for the lease of Carlton Street car park so far - but its losses through the 'risky' deal are spiralling.
The council began leasing the multi-storey car park in Weston-super-Mare from McLaren Life in 2012 – a deal which is costing the authority £435,000 every year in rent.
It was hoped the car park would make more than £20million in profit in its 45-year lifetime, but so far the ‘concerning’ deal has done nothing but cost taxpayers ‘real money’.
The lease agreement was negotiated to ensure McLaren life covered some of the council’s losses for the first five years, but the deal was capped at £650,000.
By the end of July the council had already lost £660,000 – which means even after the deficit payment, McLaren Life has received rent worth more than £600,000, while the council is £10,000 poorer.
The council expects it will lose £100,000 throughout the rest of 2015 into 2016 and a further £200,000 in 2016-2017, based on the ‘anticipation’ the leisure elements of a Dolphin Square redevelopment will be completed in early 2017.
Leader of the Liberal Democrats for North Somerset, Central ward councillor Mike Bell, described hindsight as a ‘wonderful thing’.
He said: “I was concerned about this deal from the start, especially at a time when the council was short of cash and making cuts in frontline services.
“In the longer run, the investment may well make money. But in the short term, it has already made a loss and will continue to do so.
“Council taxpayers are left in the unenviable position of hoping that factors almost entirely out of their control work out for the best to stave off growing losses over coming years.
“These losses are not theoretical sums on a council spreadsheet, this is real money that could protect and improve our services.
“Hindsight is a wonderful thing, but many people warned in 2012 this was a risky proposition, and so it has proved.”
A spokesman from the council said the Dismaland exhibition, put on by street artist Banksy at the Tropicana, has seen an increase in income at Carlton Street car park, but losses are still expected to be high.
The spokesman said: “Given the anticipated timescale for the Dolphin Square development, we estimate an unfunded deficit of around £100,000 in 2015-2016 and £200,000 in 2016-2017.”
The spokesmen also told the Mercury there are no grounds to renegotiate the deal with McLaren Life, but said: “We remain in regular contact with McLaren Life and have had discussions about this, and will continue to do so.
“We also continue to liaise closely to support McLaren Life in securing occupiers.”