British Airways i360 and new heritage centre
Find out more from the British Airways i360 website
The British Airways i360 opened on Thursday 4 August 2016, after two year's of construction. Building began in summer 2014.
To support the building of the i360, councillors agreed to take out a government loan and pass it on to developers. The loan is from the Public Works Loans Board (PWLB) – a government funding agency who make loans available to major building projects.
The i360 is projected to earn three times more than it needs to cover its loan repayments.
Landscaping work and seafront improvements
Money for landscaping will ultimately come from our share of ticket sales from the i360. This funding is to be set aside for investing in the seafront, helping enhance the area and bring in more business and revenue for traders.
Councillors agreed at the Policy & Resources Committee on 6 March 2014 that money from i360 ticket sales should be reinvested in the wider development of the seafront and its infrastructure.
Find out how we're improving the seafront.
Get the latest news from the British Airways i360 website
Find out who's supporting the i360 in the city.
Read our questions and answers for details about how the project will be funded, the benefits to the city and more
Find out about other development projects on the seafront.
All of the plans, drawings and other supporting documents, including the additional information submitted, can be accessed by entering the application numbers (BH2006/02369 and BH2006/02372) on our planning register. Plans for a major development on land next to Brighton’s West Pier were submitted to the council on Monday 17 July 2006. Additional information was submitted on Friday 8 September 2006. Planning permission and Listed Building Consent for both applications was granted at the Planning Applications Sub-Committee on 11 October 2006, subject to approval by the Government Office for the South East.
The officer's report (PDF 912KB) is available to view in the Planning Applications Sub-Committee page in the 'Councillors and Committees' section. The council’s planning officer for these applications is Paul Vidler. You can call him on 01273 292192.
Further documentation can also be found on the 6 March 2014 Policy & Resources Committee meeting page.
For further information on non-planning related aspects of this project, please read the questions and answers below or contact Major Projects & Regeneration on 01273 292553 or e-mail firstname.lastname@example.org.
Below are answers to some common questions and issues raised recently. The West Pier Trust also have some answers from their point of view which can be seen on The West Pier website.
What is the funding proposal?
The council is proposing to use a government agency called the Public Works Loans Board (PWLB) to borrow funds and lend on to the developer of the i360 at a commercial interest rate. The council then receives a higher rate of interest than it pays the PWLB, thereby earning nearly £1 million per year for the city in a time of cuts. The total project cost is £46.2 million, including interest. The developer Marks Barfield is investing £6 million and has met all costs to date including the costs of getting planning permission. The Coast To Capital Local Enterprise Partnership (LEP) have also made this a priority project and will invest £4 million. The loan would be repaid over 25 years but could potentially be repaid sooner if the attraction is very successful. If agreed, work would start this spring and the new attraction would open two years later in 2016.
Is Council Tax being used for this?
No. Council Tax will not be used to fund the Brighton i360. No funds are being diverted from the council’s budget. Funding for the project comes from the Public works Loan Board, from the Local Enterprise Partnership (Coast to Capital) and from Marks Barfield. The combined PWLB and LEP loan is paid back from the income generated by the i360. The i360 is estimated to generate roughly three times the amount required each year to cover the loan repayments.
Why not borrow money from the PWLB to spend on other projects in the city like schools, housing, roads or seafront repairs?
The council does borrow to fund other capital schemes and currently has £132.8 million of loans from the PWLB. However before it can undertake new borrowing it has to demonstrate that the loan repayments are affordable. Unfortunately, new schools, roads and repairs do not generate new money to fund the repayments, so these types of projects can only go ahead if existing budgets are diverted by making efficiency savings or cuts to other services.
How usual is this funding method?
It is extremely common. The PWLB is one of the main ways councils get big projects started. The Board’s website details hundreds of local authorities ranging from parishes to unitary councils like Brighton & Hove borrowing billions of pounds for projects. These range from shopping centres (Aylesbury Vale) to bridges to new arenas (Leeds City Council) or leisure centres (Elmbridge).
Are you sure that the Brighton i360 can pay back the loan?
Yes, we have scrutinised the financial projections in great detail and so have our partners, the Coast to Capital Local Enterprise Partnership. We are confident that this is a safe investment for Brighton & Hove City Council to make. Careful oversight on this project has also been undertaken by experienced business people from the Coast to Capital Local Enterprise Partnership, which has continued to back the project and are sufficiently impressed by the business case that they have increased their funding by 20% to £4 million.
Isn’t this taking a risk?
The i360 is projected to attract far more visitors than it needs to meet its loan repayments. It could continue to repay its loan even if visitor numbers turn out to be just half of those expected.
The council considers there is actually a greater risk in doing nothing. It would mean the derelict West Pier site languishing indefinitely and the arches beneath the west pier would remain unrepaired and in future potentially unsafe. Despite occasional reports, there are no other credible, funded proposals for the site.
Financially, if the city does nothing we forego over £1 million a year in interest payments, plus shared earnings and new business rates from the attraction and a wide range of other economic and financial benefits that will flow to local businesses. This money is desperately needed to invest in crumbling seafront infrastructure and to regenerate this part of the seafront. It is estimated the council needs to spend around £70 million to £100 million repairing seafront arches, structures and retaining walls along its 4km stretch. This is a massive sum, roughly equivalent to an entire year’s spending on adult social services. Brighton i360 will generate money that the council can use to help improve the seafront. There are big risks if we don’t do something to improve our seafront and council funds are simply not available to fund this level of investment alone.
Why such confidence the i360 will be a success?
Observation towers are enduringly popular; in fact the London Eye is the most visited paid-for attraction in the UK. Other attractions have performed well during the recession and the Brighton i360 will be delivered by the team who created the hugely successful London Eye.
We have a very well established tourist market in Brighton & Hove. Our visitor numbers are now over 10 million per year, making Brighton & Hove the most visited destination in the South East. We have 30% of the population of England living in our catchment area – within two hours travelling time. The Brighton i360 only has to attract a small percentage of this market to be a success.
We also have fast train links to London, which is now the world’s most popular tourist destination. Brighton & Hove is well placed to capture more of this market - if we have the right attractions. Brighton i360 will work with other attractions in the city to capture more of these London visitors.
Visitor attractions are doing well and attendance has been growing during the recession including the Royal Pavilion (which attracted 342,000 visitors in 2012, over a 20% increase since 2008).
Visitor numbers to Brighton & Hove are also going up. However, the i360 is predicted to help attract more of the higher spending visitors and those staying overnight. This will greatly assist our local businesses during the leaner winter months when business is very unpredictable and it will also help tourism business’s generally who rely upon higher spending visitors for their survival.
What happens if the loan is not repaid, or only repaid in part?
The council has worked with its legal advisers to ensure that the loan to Brighton i360 is structured in a commercial fashion and all the available checks and balances are in place to protect the council in this very unlikely eventuality. If this were to happen, the Local Enterprise Partnership and Brighton i360 would lose their money first. The council would then have the option to take over the attraction and/or find another operator. They would also have the option to sell the attraction. All the projections for Brighton i360 are based upon cautious assumptions to ensure that this situation is only a very unlikely eventuality.
Why couldn't Marks Barfield find a private investor?
As regularly reported in the news, businesses are having great difficulty getting investment, particularly new businesses. Banks are continuing to squeeze lending despite attempts by the Bank of England to boost finance to the sector. Projects that would have received funding before the economic downturn and banking crisis are no longer being supported.
New, innovative or iconic leisure projects are more difficult to fund than standard investments such as hotels, cinemas and restaurants. Investors prefer to see an established trading record which, in the case of the i360, is not available before construction. The London Eye for example have had similar funding difficulty in the past, however it was easily funded once operational.
It has often been the public sector who has supported innovative projects and funding, such as:
- wind farms and solar energy (through Feed in Tariffs)
- student accommodation (through nominations agreements)
- affordable housing (local authority head leases)
- Private Rented Sector Accommodation (DCLG repayment guarantees)
- infrastructure funding (DCLG LIF programme)
It is therefore common for the public sector to support new or innovative development where the private sector does not initially fund.
This project is about Brighton & Hove investing in Brighton & Hove. We have far more to gain from the project than a private investor would. For the council and the city, we place great value on regenerating the site, creating new jobs and all the local spin-off benefits including new business rates which come directly to the council at a time of cuts. These issues are not relevant to financiers located elsewhere and whose main concern is to maximise profits. The Public Works Loans Board and other government initiatives such as Funding for Lending exist because it is accepted that the market does not always deliver the infrastructure, investment and jobs where or when they are needed.
What will the benefits be?
The Brighton i360 will provide a boost to our economy. It will generate more than 440 permanent jobs - 169 jobs at the attraction plus additional jobs from the spin off benefits to other businesses located in the city. Tourism is a major employer, employing nearly 20,000 people in Brighton & Hove. Brighton i360 is expected to attract over 700,000 visitors a year (800,000 in the opening year) from existing tourists to the city, and also to bring 165,000 to 305,000 new visitors to the city who will all spend money in local shops, restaurants, and at the other attractions. Joint ticketing will help ensure that visitors also visit other attractions and the i360 will provide an excellent vantage point up on high to see all the city has to offer. In total it is expected that the i360 will inject between £13 million and £25 million of additional revenue into the local economy annually.
The Brighton i360 will benefit our community by always giving a percentage of ticket sales to be used for community benefit. It will offer discounted entry to local residents. Every child in Brighton & Hove state schools will have the chance to visit the i360 for free. Free tickets will also be gifted each year to local charities and community groups working with disadvantaged groups.
The council will earn over £1 million a year in interest payments for 25 years for the council to invest in vital infrastructure repairs. It will also earn additional income from the under-used Regency Square car park and a 49% share of any additional business rates created by new businesses starting up, or existing businesses expanding as a result of the i360. This is during a time of public spending cuts so this additional revenue is a good way for local authorities to protect other budgets that are needed for urgent front line services.
In short, if we make this investment the city gains millions of pounds and hundreds of jobs. Failing to invest does not simply keep us as we are, instead it is likely to ensure the gradual decline of the seafront, taking future investment, visitors and jobs with it.
Starting the i360 sends a very strong signal that Brighton & Hove is open for business and, like the West Pier in its time, offering cutting-edge attractions for visitors.
What would have happened if we didn't do it?
If we didn't take the initiative the risk would have been that the i360 would not have been built for a long time. We would have retained a gaping derelict site in the middle of the seafront – our ‘shop window’ to the world. Any other city with such a site in its centre would be likely to do the same thing. We are facing the gradual crumbling of seafront infrastructure. For example, The Madeira Colonnade is now shut as it is considered structurally unsafe. We are already having to rebuild seafront arches at a cost of millions of pounds. The funding councils receive from government is now being cut so radically it is never likely to provide the required investment. This project can help us to reverse this decline and to earn money to reinvest in the process.
Despite reports there were no credible, funded alternative projects which could have taken the place of the Brighton i360. Remem. Brighton & Hove is a top tourist and conference destination but we shouldn't rest on our laurels. We must reinvest in our city if we want to stay ahead of our competitors.
Will this be like Portsmouth Spinnaker Tower?
While there are some similarities, there are also many differences between the Spinnaker example and Brighton i360. For example:
- Technically, the Spinnaker is a complex structure incorporating 14,750 tonnes of concrete and 1,200 tonnes of steel. By comparison the i360 is a simple spire using 850 tonnes of steel.
- The Spinnaker has a capacity of 350 people per hour. The i360 can manage 600 people per hour.
- Portsmouth Council effectively signed up to a project whose price was not fixed. The i360 contract is based on an agreed fixed price.
- Portsmouth City Council assumed risks arising from any design defects for the Spinnaker Tower which subsequently emerged. Any defects in the i360 are the responsibility of the i360 team, a team who have a demonstrable track record with the London Eye.
Nevertheless, the Spinnaker is profitable and is a success for Portsmouth. It helps to attract visitors and it adds to the appeal of the city. In its first five years it welcomed over two million visitors, generated around £3 million in profit revenue for Portsmouth City Council and more than £72 million for the Portsmouth economy.
Finally, Brighton & Hove is not Portsmouth. Brighton & Hove has approximately twice the volume of tourism that Portsmouth has (figures from Tourism South East). Brighton & Hove also has a bigger, more dynamic, vibrant, and wealthier leisure and business tourism economy. Brighton & Hove are closer to London, and has a larger catchment area. All the market analysis shows that there is every reason to expect the Brighton i360 will attract a larger number of visitors than Portsmouth’s Spinnaker Tower.
Has the size of the pod increased?
No. The size of the i360 pod has not changed since it was approved at planning committee in 2006. The planning consent does not limit or condition visitor numbers nor pod capacity. The i360 pod is ten times larger than a London Eye pod (capacity: 25-30 people) and has sufficient capacity to cater for the projected demand. It is eight years since the planning application visitor estimate figures were produced. The projected visitor numbers then were 589,000 visitors in year one. The average visitor numbers are now predicted to be 729,000 in a stable year. The average number of people in the pod over a whole year works out to approximately 75 per ride. In reality it will vary day by day and ride by ride. 200 people can comfortably be accommodated within the pod. It will be easy to move around and look out at the view, or to sit down. The pod will be completely accessible.
A new Environmental Impact Assessment is not required due to the updated visitor projections. Visitor projections for attractions vary year on year and Brighton i360 will be no exception.
What about parking?
Regency Square car park is located directly opposite and has 507 spaces. For more information about Regency Square car park please see here. Please note that the foot tunnel from the car park to Brighton beach next to the site is closed during the building works.
What about taxi drop-off points or toilets?
There are arrangements for taxi drop-off nearby. The layby at the Brighton Centre is the current planned location for coach drop-off and pick up.
There are fully accessible and family-friendly public toilets to be located inside the i360 Heritage Centre (at ground floor level) and there will be one set of new public toilets located in the nearby seafront arches.
Why is there no decommissioning plan?
No such plan is required for permanent buildings – the same applies to all other seafront structures and attractions, including the Pier. Only with temporary attractions such as the Brighton Wheel would the council require a bond to be put in place - or similar arrangement - for this purpose.
Will the council have to pay for i360 marketing?
The council will not be paying for marketing the i360. This is the i360’s responsibility. Its marketing budget will however greatly assist in marketing the city in the UK and abroad. The council’s tourism marketing operation VisitBrighton is sure to cover the i360 in its work, as with other attractions.
What if costs overrun?
The risk of costs overrunning is mitigated by fixed price contracts, built-in contingency sums - as per industry standards and signed off by auditors - and a £1m overrun facility has been set aside if required.
Shouldn’t any Public Works Loan Board funding be saved for other projects?
PWLB money can only be used for projects which can produce an income to repay the loan. The King Alfred and Brighton Centre projects are examples of other important city projects that may benefit from this funding in the future - but they are not yet ready to start.