Alpamare, Scarborough: Businessman ‘was offered £9.5m loan to build waterpark in visit to home'
A CHIEF financial officer allegedly visited a businessman at his home in Leicestershire and offered a £9.5m council loan towards building the town’s waterpark, according to claims in a long-awaited report.
Alpamare opened in Scarborough’s North Bay in 2016 with the help of the loan from the now-defunct Scarborough Council.
Questions about the use of taxpayers’ money were raised after owner Benchmark Leisure went into administration in October 2023, owing the council £7.9m.
North Yorkshire Council – which took over from Scarborough Council six months earlier – launched an investigation over the loan, approved by just one vote at a behind closed doors meeting in 2013.
A 64-page report into the saga by NYC’s internal auditor Max Thomas has now been published.
According to Benchmark director Roland Duce, Scarborough’s chief financial officer Nick Edwards – who became interim chief executive in 2022 – visited his home in Thurgarton in December 2012 after the project ran into funding difficulties. According to Duce, instead of having to borrow from Lloyds Bank, Edwards offered a £9.5m council loan to part fund the waterpark’s construction, at an interest rate of 1.5%, compared to Lloyds’ 2.8 %.
The report says Duce believed Edwards “proposed this arrangement because he considered it was in the council’s best interests for the waterpark to be built and the rest of the Sands Development to be completed”
It says the claims have “not been substantiated” and Edwards “categorically denies” ever visiting Duce’s home "on his own or at this time” and making any offer of a loan or a 1.5% interest rate.
Duce claimed there was a second visit six months later – again denied by Edwards – suggesting changes to the loan agreement.
The agreement was finalised in April 2014, with Benchmark providing the initial £5m funding, with the council loan used to fund the final stages of the build costs, estimated to be at least £14m. The interest rate was set at 5.85%. The report found the risk that the park might not be commercially viable was recognised by councillors and officers “but not adequately addressed”.
There was “inadequate due diligence” on the park’s operator Alpamare – which folded in 2019 - to determine whether it was suitable and problems at its waterpark in Bavaria were not identified.
It said “with hindsight, it is clear the decision to approve the loan was based on incomplete information”.
The report doesn’t blame any individual. It gave an exact figure for the construction costs incurred by Benchmark of £5,387,399. The waterpark, now leased to another operator, was valued at £2.7m in 2023.
NYC’s council leader Carl Les said lessons learned would be applied to future regeneration projects.
Businessman James Corrigan, who provided evidence to the investigation, said the report highlighted "many errors” by “naive” officers who failed to “highlight the risks to members sufficiently”. He said it was shocking that they allowed the Premier Inn, an asset worth millions, to be carved out of the Sands scheme.