Southend Council set to bail out Seaway leisure complex development

Southend Council is set to invest £10million into the Seaway leisure scheme after the developer said it had became financially unviable to move forward without help.

Turnstone Estates’ long awaited £50m leisure complex on the car park off Lucy Road, Southend, is currently unable to attract investors in the current market.

This is because if it were to be sold once completed, according to current commercial property prices, the developer would get less than they had put into the scheme.

Rather than see the ambitious scheme fold, the council wants to invest in it in order, it says, to create jobs and a “leisure industry worthy of a city”.

The cash will come from the council’s capital reserves and will see it tied into a 40-year annuity leasing agreement, after which it will have the opportunity to buy the whole development for a nominal £1.

In return the council will get a bigger return by keeping any rents and car parking revenue from the development.

Councillor Ian Gilbert, leader of the council, said: “This proposal demonstrates another bold and confident move by the council in delivering on its promise to support and invest in our economic recovery.

“The Seaway development plays a vital role in our regeneration story, and as we move forwards with projects that deliver the new housing we need, it is equally important that we create new jobs and exciting places where people want to visit and spend time and money locally.”

The scheme includes an 11-screen Empire Cinema complex with IMAX, a 20-lane Hollywood Bowl, an 80-room Travelodge hotel and 555 public car parking spaces, with three restaurants and a new public square.

These companies are said to still be committed.

More than 500 new jobs are expected to be created along with £50million private investment and a £15m boost to the economy.

The proposal would also secure a long-term sustainable income stream for the council.

Paul Collins, cabinet member for corporate services and performance, says: “This proposal shows that the council has full confidence in our soon to be city, and is boldly and directly supporting its economic recovery and regeneration.

“This proposal is a move that we need to make – it will enable us to unlock a key council-owned asset, ensuring the delivery of a year-round all-weather leisure scheme that will attract both local people and those from further afield into the area, create local jobs and ensure the council has an ongoing and long-term yearly income, with the full income and value of the site fully passing to the council at the end of the income strip lease term.”

Turnstone Estates says it hopes to start work on the Seaway scheme by mid 2022 if the council approves the funding next week.

Tim Deacon, director of Turnstone said: “We will have to see what happens on Tuesday but from our point of view this is a vitally important project for the city and the council.

“That’s why they have decided to back it because there will be significant financial benefits for them. The council report highlights the improved potential income stream and the council own the whole thing after 40 years.

“This financial mechanism is being used up and down the country. It is not unconditional. We have to secure 70 per cent of the tenants and we are close to achieving that.”

The council ordered an analysis of the appropriateness of Turnstone Estates Ltd as counterparts with the council in relation to the seaway project.

The company was found to be sound with no financial concerns. It operates with four experienced employees as well as consultants and contractors.

It was found to have a good track record delivering project over the last 30 years, including a leisure scheme in Colchester.

Christine Sexton

Local Democracy Reporter