THE future of one of Yorkshire’s biggest visitor attractions was thrown into doubt today when a key shareholder raised concerns about its debts.
Rotherham Council revealed it had provided the Magna Science Adventure Centre with an emergency loan of £100,000 to make sure staff wages were covered this month.
But the authority also warned it would only be renewing a separate £250,000 loan, due for repayment in March, if Magna’s management can show it has a “sustainable business model”.
Magna is a former steelworks, transformed into a visitor attraction that uses hands-on exhibits themed on fire, earth, air and water. Its vast hall is also used to host major events.
It employs 80 people and is hugely popular with families, attracting more than 100,000 visitors a year.
But a report to senior councillors reveals that without Rotherham Council’s ongoing financial support “the business will cease to trade”.
Deputy council leader Emma Hoddinott said: “Magna has loans outstanding to the Council of more than half a million pounds and has not been able to reduce the debt it owes to the council since the end of March last year.
“Over Christmas, Magna approached the Council to seek further urgent assistance in order to meet a short term cash flow shortfall, and this finance was made available under strict new conditions.
“We are conscious that there are more than 80 people employed by the trust, whose jobs would have been in immediate doubt had provision not been made available.
“However, we are working closely with Magna on their business plan to assess their future viability.”
Rotherham Council is one of three members of the Magna Trust along with the Rotherham Chamber of Commerce and The Stadium Group.
The attraction has also received funding from the National Lottery, the Government and the former regional development agency Yorkshire Forward as well as commercial lenders.
Magna Trust chief executive John Silker said: “This short term financial support is to help with cash-flow problems caused mainly by the fire in the neighbouring building, that forced us to cancel two Christmas parties and pay back £60,000 in refunds.
“Since I took over at Magna the plan has been to cut our need to borrow money. We are confident that we will be able to do that in the near future.
“We have a robust business plan in place and lots of plans for developments and increased income.
“We have already seen some massive improvements, such as turnover on the corporate and events side of the business increasing from £730,000 to more than £1 million this year.”
Senior Rotherham councillors will next week be asked to confirm that the authority will give Magna another year to repay its £250,000 loan which will be repayable in April next year along with the £100,000 emergency loan granted in recent weeks.
However, the £350,000 loan facility will only be provided on the condition that an “independently verified business plan” setting out how Magna will increase its income is provided to the council in the next three months.