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21st March 2019

Felixstowe Spa: Bid set to be rejected


The net will be thrown wider to try and attract someone to take on the Spa Pavilion if Suffolk Coastal’s Cabinet agree the recommendations to reject the only formal bid received to run it.

Despite a thorough attempt to market the building with the aim of attracting firm offers to run it as a leisure and entertainments venue, only one bid is set to be considered by Cabinet on Tuesday, July 24.

“It is very disappointing that despite our best efforts, we were only able to attract a single bidder who sadly appear not to have presented a realistic case for being given the chance to take on the Spa,” said Cllr Geoff Holdcroft, Cabinet Member for Leisure and Economic Development.

“The conclusion of our officers who have thoroughly reviewed the bid is that it is fundamentally flawed in many ways and would be far too financially risky for this Council to give its backing to.

“I cannot recommend that we can proceed any further with this bid as this proposal would almost certainly leave the Council needing to find even more money to support the Spa. Next week’s meeting will allow Cabinet to come to its judgement,” added Cllr Holdcroft.

The Council has been trying to secure a long-term future for the Spa because it can no longer afford its annual cost of over £250,000, particularly as the building requires substantial investment to modernise it, and is attracting low audiences. The independent expert advice is it would cost an estimated £8 million for the Spa to be successful as a theatre over the next 10 years.

The one bid received to take on the Spa was initially assessed by three councillors and four senior officers who evaluated it on a range of factors such as whether the business case was viable, would Council funds be needed, and its contribution to local regeneration.

Although it just fell short of the minimum 50 per cent score required to make the next assessment stage, it was agreed that as the only bid it should be properly considered as to how risky for the Council it would be to approve it.

“The overall results were that the bid could have critical or even catastrophic risks for the Council for a variety of reasons. We have to carry out these types of assessments to ensure that we understand all the potential implications,” added Cllr Holdcroft.

Among the conclusions reached by the panel of officers were
• the level of proposed investment was not sufficient to improve the venue and that the amounts proposed were not guaranteed or substantiated
• the cost to the Council would rise in the first year to over £300,000 with no evidence that it would not continue to rise in future
• the Council would have full responsibility for the building and its maintenance
• there were serious weaknesses in the viability of the business plan.

“In short, the view of our officers is that the bid would actually leave this Council in a worse financial position regarding the Spa than we are at the moment, while there were clear weaknesses in the company’s approach.

“From the start we have made clear the harsh reality facing this Council and that we can no longer afford to pour money into the Spa. This bid does not appear to have recognised that, which is one of many flaws in its business plan.

“I believe we have no choice but to return to the market which clearly does not have the appetite to invest in the Spa as a theatre, but there could well be a buyer that will take it on for other uses, although we will not want to see it as just homes or offices,” added Cllr Holdcroft.

The Council is set to also meet the bidders for the Spa to give more detailed feedback on their proposals and discuss if they would still be interested in bidding for it when it is readvertised later this year.

Their bid was the only one received from 12 companies that expressed an interest, of which eight were large national leisure and entertainment companies.

The name of the bidder, their bid and the results of the evaluation process are commercially sensitive information, so these are not being published by the Council. It also means that quite a large part of the Cabinet’s discussions and its decision will legally have to be held without the public in the room.

It is intended that the Cabinet decision will be embargoed until 3pm on Wednesday, July 25 so that it can be fully communicated first with the bidder and other key stakeholders.

The Spa is due to remain open with a full and varied programme of entertainments until January. For more information visit www.thespapavilion.org/

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