Newport Leisure Park income hit by coronavirus

A leisure park bought by Monmouthshire council for £21 million is expected to generate around one third of the income originally expected this year.

Monmouthshire County Council had expected to receive £400,000 of net rental payments from Newport Leisure Park this year.

But following the impact of coronavirus, the council says the Spytty Road site is now expected to bring in £135,000.

It comes after Cineworld, which has a 13-screen cinema on the site, has closed all of its cinemas across the UK until further notice.

Cllr Phil Murphy, cabinet member for resources, said the latest figures show the site is covering its costs, while not generating the income expected.

“With all of the businesses compulsorily closed down it was inevitably going to suffer a loss,” he said.

“We are still covering the borrowing costs on it – so we are not making a loss – but we are not making the profit that was expected to support front-line services.”

But Cllr Murphy said he remains optimistic over the site’s long-term prospects after coronavirus restrictions are lifted.

“Longer term, I am quite certain it will be a success,” he said.

“But in the meantime we have to do everything we can to be good landlords to the tenants there to encourage them to stay.

“We will do everything we can to help the tenants.”

Questions over whether the site can still generate income to support services as intentioned have been raised by councillors.

Labour councillor Armand Watts said the investment is “clearly not paying off” and that it is now time to rethink the council’s commercial approach.

“Planning for the future entails doing things differently now and re-adjusting their mindset,” he said.

“This casino-type of gambling which has involved public money has got to stop now.

“They need to rein themselves in and go back to being traditional public service providers.”

Independent councillor Simon Howarth raised concerns over the prospect of the site not generating enough income to cover borrowing costs.

“I think it’s something we should not have done but the question now is, is the income offsetting the payments on the loan?

“Will the income being generated over the next six months pay for the borrowing and repairs?”

A spokeswoman for Monmouthshire council said the authority had expected to receive £609,000 of net rental payments on its commercial estate this year, including £400,000 attributed to Newport Leisure Park.

“Our expectation is that we will now achieve £420,000 net rental payments with Newport Leisure Park contributing £135,000 of this in the current year,” she said.

“We have entered into rental deferral agreements with a number of tenants to give them the best chances of surviving the downturn and to protect jobs that would otherwise be lost.

“Beyond amounts recovered from Welsh Government Covid hardship funds we remain hopeful that we will recover in full the majority of any remaining shortfall in the next financial year as tenants return to trading.”