BOURNEMOUTH council has borrowed £49 million from other local authorities to buy a retail park.

Officials claim the ‘specific asset investment’ purchase, made in September, will help safeguard frontline services.

At the time the council would not disclose details due to “commercial sensitivity”, however the Daily Echo can now reveal that the authority has bought Mallard Road Retail Park.

The funds for this investment have all come through borrowing from other authorities.

Officers say every effort was made to ensure the costs would be as low as possible over the repayment term.

Mallard Road Retail Park currently hosts nine businesses, including Aldi, Homebase and Currys PC World, and was until 2006 the home of Yellow Buses. It was effectively in council ownership until the borough, then under a Liberal Democrat administration, sold Yellow Buses in 2005.

Cllr Philip Broadhead, cabinet member for economic growth, said: “We are confident the investment at Mallard Road Retail Park not only provides a sound investment for the council but also gives us the opportunity to safeguard a key employment and economic site. It is projected to provide an extra £600,000 a year towards, net of borrowing and other costs, helping to safeguard existing services for residents and businesses.

“Since purchasing the site, the successful opening of Aldi has resulted in a significant increase in visitors. This is driving rents upwards and has fuelled interest in the one empty unit.

“Through this investment, the council is generating a surplus over and above its costs of borrowing, which is relieving pressure on the current finances and helping the council to come in on budget this financial year.”

A senior council finance officer confirmed the borrowing was within limits and was being committed for two years from several local authorities.

Bournemouth council’s cabinet met yesterday to discuss another significant investment. If approved by full council next week, the authority will fund the construction of a hotel on land beside the BIC. The authority would collect rent from the operator to pay off the loan.

“Many local authorities have already built up large investment property portfolios to generate additional income to help underpin their financial position,” Cllr Broadhead added.

“In Bournemouth, as part of the council’s asset investment strategy we are creating a portfolio of investments that support the local economy as well as generate surplus income.

“Mallard Road Retail Park will make a significant contribution to securing the council’s financial position, thereby protecting frontline services.”