North Yorkshire Council’s deputy leader has defended the decision to spend £18m of public money on a new multiplex and entertainment hub in Scarborough, citing the potential economic benefits for the area.

Brunswick Centre was brought by Scarborough Group International in 2021 and closed last September ahead of its transformation into a leisure-led destination, renamed Square One.

The plans would include a multiplex with capacity for about 600 people as well as a family-focused indoor leisure attraction. It would also include up to three restaurant and food and drink units and two retail units.

The investment is made of an £8m loan from North Yorkshire Council's capital reserves, plus £10.5m from Pride in Place (£3.5m) and the combined authority (£7m).

placeholder image — Brunswick Centre, Scarborough.

Councillor Mark Crane said: "People are genuinely excited. They want to see the area redeveloped. They don't want to see it continue as a boarded up building. They want to see it being successful."

NYC says it expects the development to create 400 direct jobs and about 160 jobs through the supply chain. It is forecast to generate up to £45 million of annual spending and attract an estimated 850,000 visits a year.

However some in the town, while welcoming the ambition to redevelop the site, are concerned about the security of the £8m loan.

The town’s Mayor Thomas Murray said: “I’d urge NYC to pay respect to taxpayers’ money, to have due diligence and ensure it is commercially viable, before the money is given, so past mistakes are not repeated as with Alpamare.”

Only £1m of the £9m loan granted by the former Scarborough Borough Council to Benchmark Leisure Ltd for the Alpamare water park was secured.

When Benchmark Leisure Ltd went into administration in October 2023, the firm still owed nearly £8m in public money. The project relied on over-ambitious income and visitor projections—estimating 300,000 visitors a year compared to an actual peak of 145,000 in 2019.

Councillor Crane said he didn't believe there were "any similarities to Alpamare" insisting there are guarantees in place and he is confident the scheme will be a success.

A “well known” cinema operator and a large retailer will be signing once the public money element is approved.

He said Benchmark didn’t have the financial muscle or the track record of SGI, which is investing over half of the total cost of the scheme.

The loan would be interest free for three years, but on a commercial rate thereafter, making it in SGI's interest to repay after three years, he said.

He said: "Alpamare was probably a very good thing for a few months, but struggled for the rest of the year. This would be year round.

“We have guarantees if it doesn’t come off but I genuinely can’t see this happening. SGI are desperate to get on with this.

“We are putting money into it to make Scarborough a better place for people to spend more time and money and to create job opportunities for younger people.”

A report going to the Executive on Tuesday to consider the plans says the £18.5m doesn't cover the cost of installing public toilets in Square One. Councillor Crane said toilets would be provided in the cinema and food outlets and "the door had been left open" for public toilets to be included in another part of the scheme.