Agenda item

The Cabinet considered the report of the Head of Commercial Development in relation to the Crosby Lakeside Adventure Centre Redevelopment Project.

Decisions Made:      That the Cabinet:

(1)       approved the Full Business Case and option 5 within the Full       Business Case;

(2)       authorised the Head of Commercial Development to implement the delivery plan outlined within the Full Business Case in consultation with: the Cabinet Member – Regeneration and Skills; the Cabinet Member – Regulatory, Compliance and Corporate Services; and the Cabinet Member – Health and Wellbeing;

(3)       authorised the Head of Commercial Development to conduct a procurement exercise for the appointment of a contractor to undertake the capital works outlined in the Full Business Case in consultation with the Portfolio Cabinet Members and granted delegated authority to award the contract resulting from the procurement.

(4)       authorised the Head of Commercial Development to conduct a procurement exercise to procure a partner in line with the requirements outlined within the Full Business Case in consultation with the Cabinet Members and granted delegated authority to award the contract resulting from the procurement. 

(5)        authorised Officers to engage in appropriate consultation with employees and trade unions in terms of employment matters following the Council’s normal procedures; and

(6)       noted that the capital cost of this project and refurbishment will be £3.1m and will be funded from a direct grant by the Combined Authority.  A subsequent supplementary capital estimate for this sum will be provided for Cabinet to recommend to Council for approval.

Option 1.

No ops changes.

No refurbishment.

Retain the existing operating model and team; no investment in the hospitality facilities.  No change – continue ‘as-is’.

Financial outcome: no reduction in current c.£250k pa subsidy (likely to rise over next 10 years, average of c. £290k pa). 

(Backlog maintenance requirements not addressed).

Overall assessment: not a sustainable option.

Option 2

New management.

No refurbishment.

Retain the existing operating model and team and hire new management with hospitality experience; no investment in the facilities.

Financial outcome: only marginal reduction in current c.£250k pa subsidy to an average of c.£220k pa subsidy over 10 years).

(Backlog maintenance requirements not addressed).

Overall assessment: not a sustainable option.

Option 3.

No ops changes.

Full refurbishment.

Retain the existing operating model and team; and invest in refurbishment and reconfiguration of the facility.

Financial outcome: increase in current c.£250k pa subsidy after funding on-going maintenance to c. £420k pa average over 10 years. 

(Backlog maintenance requirements covered in full refurbishment).

Overall assessment: not a sustainable option.

Option 4.

New management.

Full refurbishment.

Retain the existing operating model and team and hire new management with hospitality experience.  Also invest in the refurbishment and reconfiguration of the facility.

Financial outcome: current c.£250k subsidy not removed with insufficient new income to fully fund on-going maintenance requirements: average £265k pa over 10 years.

(Backlog maintenance requirements will be covered in full refurbishment).

Overall assessment: not a sustainable option.

Option 5.

New JV and operating model

Full refurbishment.

Financial outcome: current c.£250k pa subsidy fully removed and a surplus generated for the Council of c. £70k pa average over 10 years (total c. £320k pa average) after fully funding on-going maintenance and paying profit share to operator partner (c. £100k pa average over 10 years).

Backlog maintenance requirements covered in full refurbishment.

£3.53m benefit to the Council (improvement on current position) over 10 years.

Overall assessment: sustainable and Preferred Option.