THE deal to build a multi-million pound leisure complex next to Bournemouth’s Pavilion Theatre could end up costing Bournemouth taxpayers hundreds of millions of pounds, it is claimed.

Bournemouth council has agreed to sell the Bath Road North car park to developer Trevor Osborne so he can build a multiplex cinema, restaurants and underground car park there.

The council then intends to rent back the 350-space underground car park for between 75 and 125 years.

But documents seen by the Echo indicate the council could end up paying up to £325million in rent for the car park over 75 years.

An opposition councillor has said the figures “do not add up” and car park operator NCP said it was amazed Bournemouth council would consider committing to such a long lease.

However the council, which agreed to the renegotiated terms in February 2011, said the income from the underground car park would cover all operating costs and generate a small profit. It also said the Nautilus Development would secure £43m of investment into the town centre.

The Echo understands the council intends to sell the Bath Road North car park, which currently generates around £238,000 a year in parking revenue, for around £1.35m.

The underground car park will be rented at a starting price of around £430,780 a year. If this rent is increased annually in line with inflation, as expected, it could mean council taxpayers end up paying hundreds of millions.

Liberal Democrat Cllr Carol Ainge said: “If any of Bournemouth’s hard working taxpayers were asked to invest in this scheme I believe they would refuse. It’s equivalent to selling your own home and then having to pay the new owners a huge amount of cash yearly..”

Iain Selbie, head of business development at NCP, said: “A 25-year lease is the current industry standard and we are amazed that anyone would consider taking on anything longer than that.”

As well as committing to spending hundreds of millions of pounds on the Nautilus scheme, the council is also preparing to spend £10million buying the NCP car park at Exeter Road so that a rival scheme cannot go ahead.

This land has planning permission for a development called West Central, which like the Nautilus scheme would include a multiplex cinema and restaurants.

Land owners NCP and developers Licet claim they have the funds in place and are ready to deliver the scheme without any council subsidy.

But the council no longer supports this development and instead wants to build a bus hub there.
It intends to pursue a Compulsory Purchase Order for the site. NCP has said it is committed to the Licet scheme and will resist the council’s CPO.

Commercially confidential

BOURNEMOUTH council did not dispute the figures but would not tell the Daily Echo much it expects to make from the underground car park, citing it as “commercially confidential”.

Roger Ball, service director, environment and regeneration services, said: “Bournemouth Borough Council is the major car parking operator in Bournemouth and it is important from a traffic management viewpoint that we seek to preserve that market share.

“Therefore the council has entered into an agreement to lease the new underground car park in the Nautilus scheme when it is complete. The rent to be paid under this agreement is set at a level that will allow the income from the car park to cover all operating costs and to generate a small surplus.

“The council’s cabinet was made fully aware of the financial implications when it approved the revised terms for this transaction at its meeting of February 1, 2011.”

The agreement between the council and Trevor Osborne was for the council to receive an up-front capital receipt and a share of “super profits” over an agreed threshold.

But this was changed during the economic downturn when Osborne Bournemouth Ltd revised its plans. The rent of the underground car park was increased and the council reinvested its upfront capital receipt in the refurbishment of the Pavilion.

Cabinet considered seeking an improvement to the terms  but the report stated: “The terms...reflect the outcome of many months of negotiations and are believed to be the developer’s final position.”