Alpamare, Scarborough: Owner of Yorkshire coast waterpark enters administration seven years after it opened

Developer Benchmark Leisure Ltd, has gone into administration leading residents, businesses, and politicians to express sadness and disappointment at the pool and spa complex’s winter closure.

In addition to possible impacts on the local economy, questions have also been raised about millions of pounds of taxpayer money that was loaned to the developer in 2013.

Sir Robert Goodwill, the MP for Scarborough and Whitby, has called for “a full forensic investigation into how these finances have been managed”.

He added: “Right from the start Benchmark have failed to deliver what they said they would and sadly it’s come to this”.

The news follows a shock announcement earlier this month by the company when it announced a “temporary” closure and said there was a “plan to re-open in spring 2024”.

Administrators said that the situation is “complex” and different options, including the sale of the facility, are being considered but stressed that “it is early days”.

Sir Robert said: “In my view, the priority of North Yorkshire Council should be to try and get it re-opened by Easter, it is an asset that we should ensure continues to deliver for locals and tourists alike.”

Alpamare opened in Scarborough’s North Bay in 2016 with the help of a £9m bail-out loan from the now-defunct Scarborough Council and as of November last year, it still owed North Yorkshire Council £7.8m.

Benchmark Leisure has been a considerable contributor to tourism in the area and was involved in several projects including apartments, chalets, a hotel, and a pub.

Shirley Smith, president of the Scarborough Hospitality Association, described it as “a crying shame”, adding that she was concerned about the loss of business “especially from day trippers”.

She said: “It was a beautiful place to go and the best thing we had in Scarborough, we could even go there in the winter when there was nothing else.”

North Yorkshire Council’s corporate director for community development, Nic Harne, said the council had been notified and would be “liaising with the administrators and considering all options available to us at this time with a view to minimising the impact on us and the Scarborough area.”

Coun Eric Broadbent, who represents the Northstead division where the waterpark is based, said: “It’s very sad and I’m very disappointed as there will be a knock-on effect and local people will feel it.”

Lindsey Prior-Mckie, who owns the Super Swim Academy that ran classes at Alpamare, said she had “already been preparing for the possibility that it wouldn’t re-open” following the original announcement about a temporary closure due to high energy costs.

She said that the sudden closure would have a serious impact on her business as she had already had to cancel and refund the bookings of 150 children who were set to take part in a 10-week swimming course.

Ms Prior-Mckie added: “That money was in the bank and was meant to last over Christmas, but that’s pretty much gone now.”

The possibility of North Yorkshire Council taking over the operation of the park on a temporary basis has been suggested but Ian Ashton, chair of the Herriot Country Tourism Group, said while the water park represented a small part of North Yorkshire’s extensive offer for visitors, it played a substantial role in the Scarborough area.

He added: “I would think the 150,000 people who visit the water park would find something else to do as there’s plenty to do in Scarborough. At the end of the day that’s an awful lot of money to lose.”

Investigation

A cloud of uncertainty is now hanging over £8m of taxpayers’money. North Yorkshire Council has launched an investigation into its position over an apparently unsecured £9m loan which was given behind closed doors by Scarborough Council to Benchmark Leisure.

While administrators MHA confirmed they are exploring options to resolve Benchmark’s financial position, which could include trying to find a buyer for its main asset, the waterpark, leading politicians in the area last night expressed dismay over the outcome of the 35-year loan deal.

North Yorkshire Council’s leader Councillor Carl Les has described the financial headache inherited from the borough council as “very disappointing”.

Scarborough and Whitby MP Sir Robert Goodwill added: “Right from the start Benchmark have failed to deliver what they said they would and sadly its come to this.”

With a capacity of 3,000 people a day the waterpark was designed to complement Scarborough’s other attractions and although it had been hoped it would attract 500,000 people a year before it opened, a record attendance of over 145,000 people was announced in 2019, turning over £2.4m.

Comprising of a large wave pool, some of the country’s longest water slides, and two outdoor pools overlooking the North Sea, all heated to 34 degrees, the water park has become a lynchpin in the Scarborough area’s tourism offer.

When asked if it was possible a buyer could be found for the water park, they added: “It’s possible that the position can be resolved, but there are quite a few things that need to happen that are not necessarily under our direct control at the minute.”

Scarborough council’s move to borrow £9m from the Public Works Board to help fund the £14m alpine-themed attraction was approved by just one vote after the public was excluded from a full meeting of the council in 2013.

The decision was made following an officer’s report which has never been published and presentations by a director of Benchmark.

Minutes from the meeting, which make no reference to the scale of the loan, state council officers provided councillors with “very detailed explanations of the full financial and legal risks involved”.

Concerns are mounting over the amount the North Yorkshire Council will be able to recoup as it is understood Scarborough Council did not register a charge against Benchmark over the loan, meaning as an unsecured creditor it could find itself low in the pecking order as the firm’s assets are divided up.

With North Yorkshire Council already facing a £25m annual black hole, the council’s plans for securing key services have been based on the Benchmark loan being repaid in full.

To set the outstanding £8m of the loan in context, a one per cent increase in North Yorkshire’s council tax raises just over £4m.

It is understood if some or all of the loan is not repaid, the authority would be likely to use its dwindling reserves to plug the gap.

A council spokesman said: “We are liaising with the administrators and are considering all options available to us at this time with a view to minimising the impact on us and the Scarborough area.”

Benchmark’s directors have not responded to a request for comment.

Councillor Stuart Parsons, leader of the authority’s Independent group, said: “This loan should have been very high on the list of risks to alert councillors to when the unitary council was formed.

“The reserves are there to stabilise the council at times of acute need – we could have a really bad winter and need to buy lots of salt – and the reserves can only stretch so far.”

Green group leader Councillor Kevin Foster said: “I am very concerned by this and hope there is nothing else unearthed at other councils that we are slightly unaware of.”

Leader of the authority’s Labour group, Councillor Steve Shaw Wright, said: “Everything should have been honest and open. We now need to look at all the district and borough councils’ debts across the patch because we can’t keep dipping into almost non-existent reserves.

The background

For almost 20 years, Benchmark Leisure was Scarborough Council’s main partner in a plan to rejuvenate the town’s North Bay, with approval given to several major developments despite concerns raised by councillors and residents.

This included a £9m council loan in 2013 to ensure the Alpamare water park’s completion following setbacks attributed to the 2009 economic downturn.

Benchmark Leisure and the company’s leadership were contacted for comment but they did not respond by the time of publication.

When Scarborough Council entered into the controversial Sands Development agreement with Benchmark Leisure Ltd in 2002, the authority had high hopes for a project that would “be considered a major magnet for tourists outside of Yorkshire” to visit the town throughout the year.

It provided for the development of 55 acres of land and in addition to the water park, plans were made for a cinema, restaurants, and flats where the former Atlantis water park once stood.

The first development phase was the seafront apartments and commercial units at Kepwick and Lockton House as well as beach chalets located on the promenade which were completed in July 2008.

Following the council’s £9m loan in 2013, Alpamare UK opened in 2016 with the development of a Premier Inn hotel next to the water park approved and constructed a few years later.

However, the cinema proposal had stalled since 2017 and when the Labour-led administration took over the council it decided to end its agreement with Benchmark in 2021, with a new plan for a town-centre cinema receiving approval earlier this year.

The council admitted that the Sands Development “stalled at various stages” as the economic climate and leisure market changed and said that “new proposals by Benchmark were no longer acceptable “in form or principle to the council”.

Despite a last-minute legal challenge by Benchmark, SBC’s cabinet rejected the developer’s proposals and in March 2021 voted to end the Sands Development.

Possible council takeover

Following April’s local government reorganisation and the merging of borough and district councils, the new North Yorkshire Council became responsible for agreements made by SBC including the remaining £7.8m of unpaid loan.

MP for Scarborough and Whitby, Sir Robert Goodwill has expressed hopes that the council could take over the site, adding: “The council will now have control over much of that land and can maybe bring forward new projects to improve the offering for tourists and locals and try and salvage something from this situation”.

The possibility of a council takeover of Alpamare has been raised on several occasions in the past when financial issues have arisen at the water park.

In 2019 a winding-up petition was issued against Alpamare UK by creditor British Gas Trading Ltd over an unpaid bill of approximately £700,000.

At the time, councillors raised concerns about the repayment of the £9m loan which was branded as the “council’s biggest liability”.

However, officers assured members that “if, for example, Benchmark were to breach their legal conditions we would get the water park back”.

A similar situation arose last year following a legal dispute between Scarborough Council and Benchmark over rent repayments from the Covid-19 pandemic.

At the time, a council spokesperson told the LDRS: “Under the terms of the water park lease Benchmark still has the opportunity to buy the water park.

“This is subject to the company repaying the £9 million loan it was provided with for the water park development in full.”

Administrators have described the situation as complex and concerns have been raised about a potential division of the firm’s assets, but at this stage, the future of the site remains unclear.