Forge Island cinema deal is “nothing like Riverside”

Forge Island cinema deal is “nothing like Riverside”

By Gareth Dennison | 22/04/2021

Forge Island cinema deal is “nothing like Riverside”

 

ROTHERHAM Council will pay an annual rent for the Forge Island cinema — but insists the deal is nothing like the heavily criticised Riverside House arrangement.

Developers Muse are covering the initial investment of about £30 million and RMBC has committed to a 35-year lease on the leisure scheme.

The project — called “game-changing” by the council — is a key part of the Rotherham town centre masterplan.

But the authority’s own upfront allocation is only for additional costs like flood defences — and a 2018 report to cabinet warned that if units are vacant in future years, it could prove costly to RMBC.

Quantity surveyor Rob Felstead said: “The council will take the risk of collecting the rental incomes from the cinema, food outlets, hotel and importantly car parking, in order to afford the rent.

“There is a serious flaw in the business case here. People will continue to go elsewhere, where parking is free. The public have made that clear, time and time again.

“Notwithstanding that, there are huge risks with the cinema industry, which is on its knees at the moment, let alone in 35 years’ time.”

Mr Felstead, who is running for election with the Rotherham Democratic Party, added: “It will be a similar thing to Riverside House. This so-called Labour council is a Tory council in disguise.

“They do not care about financially burdening Rotherham, it is the London development company Muse they are looking after. How much of the build will be built with local trades? Or even with local steel?”

The deal for Riverside House — RMBC’s headquarters since 2012 — drew strong criticism because the council would not even own the building after paying an annual £3 million rent for 35 years.

It was restructured three years ago for a lower rent, the option to buy for £1 at the end and more freedom to sublet part of the Main Street building.

Cabinet papers from 2018 say there will be the option to buy the Forge Island development for £1 after the lease period.

Annual rent is still to be decided but RMBC says the deal will include a stipulation that the initial amount payable cannot be higher than the authority is set to receive from Forge Island income streams.

But the 2018 cabinet report noted that if units become vacant for lengthy periods, then “there is a risk that annual income would not be sufficient to cover costs and, in addition, the council would be required to cover any business rates payable for vacant units and shortfall in maintenance costs due to reduced service charge income.”

The initial lease periods will be 20 years for the hotel and cinema and ten for the restaurant and café units.

Paul Woodcock, RMBC director of regeneration and environment, said: “This is a completely different model from Riverside.

“The council will receive an income from occupiers on the site. Our agreement stipulates the initial income will exceed any rent the council pays.

“And our financial modelling shows the council will make a profit from the scheme over the lifetime of the development, with the council retaining the buildings at the end of the agreement.”


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