by Stuart Minting and Anttoni James Numminen, Local Democracy Reporters
A cloud of uncertainty is hanging over £8 million of taxpayers’ money and one of the region’s leading tourist attractions after the firm behind the Alpamare water park went into administration.
North Yorkshire Council has launched an investigation into its position over an apparently unsecured £9m loan.
It was given behind closed doors by the former Scarborough Borough Council to Benchmark Leisure, the firm behind the Alpamare water park in Scarborough.
Benchmark Leisure Ltd has gone into administration.
The news follows a shock announcement earlier this month by the company when it announced a “temporary” closure and said there was a “plan to re-open in Spring 2024”.
Administrators MHA are exploring options to resolve Benchmark’s financial position, which could include trying to find a buyer for its main asset, the water park.
Leading politicians in the area last night expressed dismay over the outcome of the 35-year loan deal.
North Yorkshire Council’s leader Councillor Carl Les has described the financial headache inherited from the borough council as “very disappointing”.
Scarborough and Whitby MP Sir Robert Goodwill added: “Right from the start Benchmark have failed to deliver what they said they would and sadly its come to this.”
With a capacity of 3,000 people a day the waterpark was designed to complement Scarborough’s other attractions and although it had been hoped it would attract 500,000 people a year before it opened, a record attendance of over 145,000 people was announced in 2019, turning over £2.4m.
Comprising of a large wave pool, some of the country’s longest water slides, and two outdoor pools overlooking the North Sea, all heated to 34 degrees, the water park has become a lynchpin in the Scarborough area’s tourism offer.
Tourism industry leaders said while the firm’s collapse was a serious blow for the Scarborough area there was still a spectrum of other attractions to draw in visitors.
Benchmark’s position has emerged just days after it was announced the attraction would close for winter due to high energy costs.
The administrators said the financial issues surounding Benchmark were complex and it would hold talks with the council while options over the £8m debt and that Benchmark’s primary interests are in the water park.
When asked if it was possible a buyer could be found for the water park, they added: “It’s possible that the position can be resolved, but there are quite a few things that need to happen that are not necessarily under our direct control at the minute.”
Scarborough council’s move to borrow £9m from the Public Works Board to help fund the £14m alpine-themed attraction was approved by just one vote after the public was excluded from a full meeting of the council in 2013.
The decision was made following an officer’s report which has never been published and presentations by a director of Benchmark.
Minutes from the meeting, which make no reference to the scale of the loan, state council officers provided councillors with “very detailed explanations of the full financial and legal risks involved”.
Concerns are mounting over the amount the North Yorkshire Council will be able to recoup as it is understood Scarborough council did not register a charge against Benchmark over the loan, meaning as an unsecured creditor it could find itself low in the pecking order as the firm’s assets are divided up.
With North Yorkshire Council already facing a £25m annual black hole, the council’s plans for securing key services have been based on the Benchmark loan being repaid in full.