Tourism and marketing company Make It York has asked for a taxpayer-funded bailout to keep it afloat as it has been “decimated” by the pandemic.
If the council does not step in, Make It York (MIY) and Visit York will shut down – and leave “significant debts”. This would include making a large number of staff redundant without compensation, a council report warns.
The organisation wants
- its rent payments for offices on Museum Street and Silver Street to be deferred
- a loan of £300,000 if necessary
- and a “letter of guarantee” from the council that it will have access to up to £1 million.
Senior councillors have been told the impact will be “severe” if the company fails – and as it is owned by City of York Council, creditors will ask the local authority to pay off outstanding debts.
The cost of the bailout is put at “£474k in 2020/21 as the planned rental payments will not be received”.
Without help, MIY is set to make a loss of £1.26m at the end of the tax year next March.
A council report says: “MIY’s revenues have been decimated and, although the company’s board has reduced costs and cut all non-essential spend, these measures have not been sufficient to ensure the business’s commercial viability.
“Having begun the year relatively cash rich, MIY is now coming to the point where its cash and reserves are almost exhausted, and the company is in a negative balance sheet position.
“Unless the council intervenes to support MIY’s financial position the directors would have to appoint a liquidator / insolvency practitioner without delay in order to wind up the company.”
It warns that if the company goes under, it would threaten the city’s recovery from the pandemic, disrupt management of Shambles Market and leave “significant debts”.
The team has reduced costs as far as possible on heating, cleaning and consumables, the report says. It adds that bosses have considered moving out of the city centre premises – but that it would cost more to move and fit out a new office.
It is now looking to make staff redundant to cut costs.
Accountants say a further lockdown would cost the organisation about £90,000 a month.
The Christmas market was expected to bring in £875,000 – but was cancelled in October.
MIY expects Christmas 2021 to be less profitable than previous years – but is forecasting Christmas 2022 to be more successful for the city than ever before, bringing in close to £1 million.
Stalls and events could be spread across the city to Museum Gardens, St Helen’s Square and areas around the Minster, according to a report.
The bailout will be discussed at a meeting on Tuesday.