Olympic Park tower ‘saddled with debt that will never be repaid’


Orbit TowerImage copyright
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The corporation that runs the tower says it is value for money

A slide built to rejuvenate London’s Olympic Park is not attracting enough visitors and is “saddled with a debt that will never be repaid”.

The attraction, which was added to the Orbit Tower in June last year and has had 138,245 visitors, is £12.2m in debt with interest growing by £700k a year.

Some London Assembly members have said the debt could be passed to taxpayers.

The London Legacy Development Corporation (LLDC) said it was under no deadline to repay the debt.

It added that visitor numbers were at the higher end of its projection and denied public funds would be called upon.

‘Poor value for money’

Since the tower, which is the UK’s tallest sculpture, was built by steel company ArcelorMittal in 2012, concerns have been raised about its financial viability.

In the financial year of 2016-17, 13,548 people bought an annual pass. But since April this year only 184 have.

In 2016, the slide was added to try to bring in more income from tower visitors.

At £16.50 a ticket, about 740,000 adults would need to go down it to pay the current debt.

2.76 million Have used the Aquatic Centre since 2014-15, 16% more than its target

80,000 People have participated in events

13,000 People have worked in the Park since the Games

PA

Andrew Boff, Conservative London Assembly member, said: “The tower itself is poor value for money.

“I don’t think the visitor numbers justify the costs and it’s not a bold visitor attraction.

“The mindset is almost, ‘let’s chuck it on a credit card and forget about it’, and that way of thinking hasn’t exactly worked out well in the past.”

He added: “They gave the impression that ArcelorMittal were going to pay for all of it, then we had the slide and running costs so what’s to say that taxpayers won’t pay more in the future?

“I hope we never again have an Olympic Games in London.”

When the tower was built, it was gifted £10m by ArcelorMittal who then also loaned it £9.2m.

The loan does not have to be paid until the LLDC has cleared other debts, such as the cost of installing the slide.

The contract also stipulates that once the tower makes a profit, 50% goes to the LLDC and 50% is used as loan repayments.

ArcelorMittal Orbit TowerDesigned by Turner Prize-winning artist Anish Kapoor
Boris Johnson, who was London Mayor at the time, said it would be “the perfect iconic cultural legacy”
Opened in 2012 as an observation tower
Closed after the Games while it was adapted for long-term use, and reopened in April 2014
Since 2012, 632,000 people have used the tower
Nearly 3,000 have paid to abseil down it, while eight weddings have been held there

Andrew Dismore, Labour London Assembly member, said: “How long is it going to take [to pay the debt]? They always had rosy expectations.

“When something is new people always want to have a go on it, but it’s quite an expensive attraction and I can’t see West Ham fans going up and down it year after year.

“The money that is owed on the loan and the interest could be spent on other more important services.

“It is still a debt, it’s a growing debt, and we’ll have to pay for it.”

But the LLDC said the current deal meant the loan would be paid from profits so taxpayers’ money was not being diverted from other projects.

A spokesman said: “It’s a favourable deal for the taxpayer as it allows the tower to get established and to make a profit before the debt is repaid.

“There’s no set target, it will be repaid once we can.”

Thursday marks the fifth anniversary since the Olympic Games opened in the city.



Source : http://www.bbc.co.uk/news/uk-england-london-40728541

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