(Cabinet Member with
Special Responsibility Councillor Fletcher)
The Corporate Director
(Regeneration) submitted a report asking Cabinet to consider
options for the future of the Dome.
The options, options analysis, including risk
assessment, were set out in the report as follows:
Option 1 – Closure and
demolition of the dome, with no transfer of events.
In
Option 1 an estimate for demolition of the Dome (“to one
metre below ground level, grubbing up and sealing off of services,
removal of debris and arisings off
site, etc”) has been received from Birse Civils Limited.
At 2009/10 prices the total cost estimate stood at £85,100
(2008/09 Base plus 2% inflation). Any capital growth in respect of
the above has yet to be highlighted as an item for the Capital
Programme and approval would be dependent on a project
appraisal.
Assumptions:-
- Cessation of all operations at Dome.
- One permanent staff member subject to redeployment, with effect
from April 1st 2009.
Staff member may alternatively take redundancy option which would
result in subsequent redundancy costs.
- Effective 1st April
2009, subject to no contractual costs relating to cancellation of
existing bookings.
Projected revenue savings of £111,900 best case and
£66,900 worst case scenario based on 2009/10 draft estimates.
The projected savings for 2010/11 and 2011/12 are £121,200
and £127,200. A breakdown of the Option 1 financial appraisal
is attached as an appendix to the report.
Risks:-
- The above would have a potentially damaging impact on the
reputation of the Council and district. The closure of the Dome and
no transfer of events would be viewed negatively in terms of the
impact that shows and events make to the district and undermine the
events strategy undertaken since the creation of Cultural Services.
High profile event/shows such as those undertaken in 2007/2008,
including;- the “Arctic
Monkeys”, “Athlete”, “Reverend & the
Makers”, and “the Kooks”, etc., would cease
through the loss of the existing revenue budget.
- The above assumes an effective date of the 1st April 2009, and no contractual costs
relating to cancellation of existing bookings. Based on the earlier
work undertaken as part of the January 2008 report to Cabinet,
bookings scheduled for the Dome in 2008/2009, the potential maximum
estimated contractual costs of cancellations were calculated at
£45,000 (there has not been time to-date to adjust the
figures to reflect 2009/2010 pre-booked events). Pending
Cabinet’s decision with regards to a preferred option on the
future of the Dome, to avoid the risk of reputational damage the
above is hypothetical, as no event promoter or organiser has yet
been contacted with a view to negotiating an alternative venue
(which could offset some of the potential contractual cancellation
costs). However, if the decision was taken now to close the Dome
with effect from April 2010, there would be no contractual costs
relating to cancellation of bookings, as to-date no bookings have
been confirmed for 2010/2011. A decision could be made to coincide
with the end of the 2009/2010 season to ensure no commitments are
made for events to be held in 2010/2011.
- Permanent staff member could take statutory redundancy if
redeployment not successful which would result in a cost,
calculated at £6,000 (note this figure is based on March 2008
figures, with no enhancements. There has not been time to-date to
adjust the figures to March 2009).
- No
budget approval as present to demolish the Dome.
Option 2 - Closure and demolition of the Dome, transferring the majority of
events to the Platform and/or alternative venues within the
District (including private sector venues) – subject to
availability.
Assumptions:-
- Cessation of all operations at Dome.
- Transfer of events from the Dome to the Platform and/or
alternative venues within the District (including related
expenditure and income) – subject to
availability.
- Retention of permanent staff – transferred to within
Cultural Services to support events held in alternative
venues.
- Effective 1st April
2009, subject to no contractual costs relating to cancellation of
existing bookings.
This option would result in a net
revenue saving of £91,100 best case and £46,100 worst
case scenario based on 2009/10 draft estimates. The projected
savings for 2010/11 and 2011/12 are £93,200 and
£95,000. A breakdown of the Option 2 financial appraisal is
attached as an appendix to the report.
As
already referred to in option 1, option 2 also contains an estimate
for demolition of the Dome. At 2008/09 prices the total cost
estimate stood at £85,100 (2008/09 Base + 2% inflation). This
capital growth has yet to be highlighted as an item for the Capital
Programme and approval would be dependent on a robust business case
and project appraisal.
In
the event that Cabinet wishes to consider relocating the Dome based
events/shows to the Platform, the latter would require a capital
investment (staging, “blackouts”, lighting and sound
systems, etc.) to bring the Platform to an equivalent operational
standard - estimated at £132,600 (2008/09 Base + 2%
inflation). These improvements have been identified as a request
for growth within the Capital Programme but are subject to approval
dependent on a robust business case and project
appraisal.
Risks:-
- The above assumes an effective date of the 1st April 2009, and no contractual costs
relating to cancellation of existing bookings. Based on the earlier
work undertaken as part of the January 2008 report to Cabinet,
bookings scheduled for the Dome in 2008/2009, the potential maximum
estimated contractual costs of cancellations were calculated at
£45,000 (there has not been time to-date to adjust the
figures to reflect 2009/2010 pre-booked events). Pending
Cabinet’s decision with regards to a preferred option on the
future of the Dome, to avoid the risk of reputational damage the
above is hypothetical, as no event promoter or organiser has yet
been contacted with a view to negotiating an alternative venue
(which could offset some of the potential contractual cancellation
costs). However, if the decision was taken now to close the Dome
with effect from April 2010, there would be no contractual costs
relating to cancellation of bookings, as to-date no bookings have
been confirmed for 2010/2011. A decision could be made to coincide
with the end of the 2009/2010 season to ensure no commitments are
made for events to be held in 2010/2011.
- It
should be noted that non-availability and layout of other potential
venues within the District would mean a small percentage of events
could not be considered for transfer. For the purposes of
consistency all projections within this report are based on
transferring 100% of the events from the Dome to Platform, as at
this stage it is not possible to determine otherwise without
discussing the situation with promoters.
- No
budget approval at present to demolish the Dome.
- No
capital investment approval at present to upgrade the Platform, and
this would be subject to the business case.
- Failure to manage effective redirection of shows from the Dome
to the Platform.
- Failure to achieve show income as estimates.
Option 3 - Continue current
operation.
In
this option the City Council would continue to operate the Dome,
presumably until such time as the outcome of the Morecambe
promenade redevelopment is determined.
Assumptions:-
- Although there would be demolition costs associated with the
Dome, estimated at £85,100 (2008/09 Base + 2% inflation), it
is assumed that they would be offset against the overall costs of
the redevelopment of Morecambe Promenade.
- Subject to a satisfactory outcome to the Morecambe promenade
redevelopment, and if Cabinet still wished to consider relocating
the Dome based events/shows to the Platform and/or alternative
venues within the District (including private sector venues), the
former would require a capital investment (staging,
“blackouts”, lighting and sound systems, etc) to bring
the Platform to an equivalent operational standard - estimated at
£132,600 (2008/09 Base + 2% inflation). These improvements
have been identified as a request for growth within the Capital
Programme but are subject to approval dependent on a robust
business case and project appraisal.
- There would also be revenue consequences linked to the above, in
respect of additional expenditure and income (including staffing
costs), associated with staging more events/shows in the Platform.
At this time these costs have not been determined.
- That expenditure identified in the Capita Symonds Condition
Survey will be capital in nature, starting in 2009/10. These
improvements have not yet been submitted as growth within the
Capital Programme and are still subject to robust review by both
Cultural and Financial Services.
-
A breakdown of the Option 3 financial appraisal is
attached as an appendix to the report.
Risks:-
- No
approval of budget allocation at present in respect of the
condition survey.
- No
capital investment approval at present to upgrade the Platform, and
this would be subject to the business case.
- No
revenue budget approval at present to transfer Dome events/shows to
the Platform.
Option 4 - Seeking a private operator
to take on the operation of the Dome.
Within the January 2008 report, Cabinet was informed of an
informal approach undertaken by the former Corporate Director
(Regeneration), to identify a potential private operator. The
matter was not pursued as only one operator was identified and the
management fee sought from the City Council by the operator was
prohibitively large.
Assumptions:-
- The outcome of the above would likely involve a Management Fee
from the City Council to any operator and would therefore not yield
any financial savings.
Risks:-
- The likelihood of finding a suitable and affordable operator for
the Dome, for the time that remains before the redevelopment of
Morecambe Promenade. It is difficult to identify where any operator
would make any savings with regards to fixed costs, such as
utilities, etc.
- Cabinet are reminded that the whole Bubbles Complex, including
the Dome, has in the past been operated by a private contractor (as
part of the Compulsory Competitive Tendering regime). Ultimately
that contractor failed and the operation of the facilities reverted
to the City Council.
- In
the event that a private sector operator was identified for the
Dome, it would likely operate in direct competition to the Platform
and may impact on the programming and financial viability of the
Platform.
Option 1 provides the greatest financial whole-life saving,
whilst option 2 would allow the Council to retain a programme of
events, and option 3 a deferral on one or both of the above. In
view of the uncertainty regarding the long-term future of the Dome
and the previous experience with a private operator, option 4 is
not a preferred option.
It was moved by Councillor Barry and seconded
by Councillor Fletcher:-
“(1) That the Council immediately cease taking further
bookings for the Dome for any period beyond 1st June
2009
(2)
That Cabinet approves, in principle, closure of the Dome on
1st June 2009
(3)
That Cabinet requests a further report from officers on the best
way to do this.”
By way of amendment, which was accepted as a
friendly amendment by the mover and seconder of the original proposal, Councillor Mace
proposed, and Councillor Charles seconded, some additional
wording:-
“(4) That Officers investigate
the business case and possible external funding for the £132K
improvements to The Platform, bearing in mind that in present
circumstances the City Council cannot commit to this capital
expenditure.”
Members then voted as follows:-
Resolved:
6 Members
(Councillors Bryning, Barry, Charles,
Fletcher, Gilbert and Mace) voted in favour, 4 Members (Councillors
Archer, Blamire, Burns and Kerr) voted
against.
(1) That the
Council immediately cease taking further bookings for the Dome for
any period beyond 1st June 2009
(2) That Cabinet
approves, in principle, closure of the Dome on 1st June
2009
(3) That Cabinet
requests a further report from officers on the best way to do
this
(4) That Officers
investigate the business case and possible external funding for the
£132K improvements to The Platform, bearing in mind that in
present circumstances the City Council cannot commit to this
capital expenditure.
Officers responsible
for effecting the decision:
Corporate Director (Regeneration)
Head of Cultural Services
Head of Financial Services
Reasons for making
the decision:
The decision is consistent with
the Council’s strategy for redeveloping Morecambe’s
Central Promenade. It will result in revenue savings on the Dome
whilst exploring possibilities for external funding for
improvements to the Council’s other venue in Morecambe, The
Platform.