News: Council paying for fit outs at Forge Island
Rotherham Council has confirmed that it is paying a contribution towards the fit out of the units at its flagship Forge Island development.
Forge Island is the town centre's new landmark leisure destination being delivered by Rotherham Council in partnership with Muse. The £47m development includes an 8-screen boutique cinema operated by The Arc Cinema, a 69-roomed Travelodge Hotel as well as food outlets which are yet to open.
Work began on site in November 2022 after the council agreed to fund the regeneration scheme itself when the funding available to its delivery partner, Muse, "significantly reduced" due to the volatility of the financial markets. The authority said it would save nearly £50m compared to an externally funded deal drafted in 2018.
Questions have been raised in the council chamber after Rothbiz reported first last year that operators had not been able to bring forward outlets that had originally signed up as construction progressed. There have been concerns over the financial cost to the council due to the empty units.
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Cllr. Robert Taylor, Cabinet Member for Transport, Jobs and the Local Economy, explained that: "The Council’s approved Budget and the MTFS [Medium Term Financial Strategy], assumed a budget plan that deals with a period where the scheme isn’t fully let, as did the financial model for Forge Island. Such a model doesn’t anticipate prospective business rates or rents so we can’t consider them as lost."
In approving the budget, the council expected that the repayment of capital costs will be met wholly or largely over the long term by revenue generated from commercial activity in the Forge Island development. At the time, the cabinet heard that the longer-term financial risks that the project presents related to the Council’s ability to maintain the incomes levels from the lettings, car parking and business rates.
Last year, the authority said that it had agreed the Forge Island development for the purposes of regeneration of the town centre, not as a commercial venture.
Cabinet approved an increase in the Council’s Capital Programme in 2022 to cover the £46.8m costs which were expected to be covered by the authority's own borrowing and capital resources.
Forge Island is funded by a loan that will not be charged until April 2026, a year after scheme completion. The Council doesn’t take specific loans out on a scheme by scheme basis, but borrows in accordance with need and cashflow combined with investments, as part of its treasury management activity.
Cllr. Taylor added: "The actual final cost of the project is not yet known, whilst the structures are largely completed, part of the project budget was a contribution towards the fit out of the units. As only some of the units are currently tenanted and open, the contribution to the fit out of the remaining ones is still to be paid. As such, the final project costs are not yet complete. However, it is still expected that the project will be completed within the £47.4m budget agreed by Cabinet in October 2022."
Vetro Lounge, a new neighbourhood bar, has recently been confirmed as the first food and drink venue to open at Forge Island.
Fit out relates to building an interior space, making it suitable for occupation.
Capital contributions from landlords are common in the leisure sector. It has been reported that Barnsley Council paid £2m to Cineworld and £1m to TGI Fridays as part of its town centre development, Glass Works.
Rotherham Council had £8m in its budget for Forge Island in 2024/25 but nothing for 25/26. It has regularly paid parnter, Muse Developments, with records showing payments such as £1,043,288 in September 2024, £1,187,143 and £1,814,858 in July 2024 and £1,691,564 in April 2024.
Forge Island website
Images: Muse / Google Maps
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Forge Island is the town centre's new landmark leisure destination being delivered by Rotherham Council in partnership with Muse. The £47m development includes an 8-screen boutique cinema operated by The Arc Cinema, a 69-roomed Travelodge Hotel as well as food outlets which are yet to open.
Work began on site in November 2022 after the council agreed to fund the regeneration scheme itself when the funding available to its delivery partner, Muse, "significantly reduced" due to the volatility of the financial markets. The authority said it would save nearly £50m compared to an externally funded deal drafted in 2018.
Questions have been raised in the council chamber after Rothbiz reported first last year that operators had not been able to bring forward outlets that had originally signed up as construction progressed. There have been concerns over the financial cost to the council due to the empty units.
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Cllr. Robert Taylor, Cabinet Member for Transport, Jobs and the Local Economy, explained that: "The Council’s approved Budget and the MTFS [Medium Term Financial Strategy], assumed a budget plan that deals with a period where the scheme isn’t fully let, as did the financial model for Forge Island. Such a model doesn’t anticipate prospective business rates or rents so we can’t consider them as lost."
In approving the budget, the council expected that the repayment of capital costs will be met wholly or largely over the long term by revenue generated from commercial activity in the Forge Island development. At the time, the cabinet heard that the longer-term financial risks that the project presents related to the Council’s ability to maintain the incomes levels from the lettings, car parking and business rates.
Last year, the authority said that it had agreed the Forge Island development for the purposes of regeneration of the town centre, not as a commercial venture.
Cabinet approved an increase in the Council’s Capital Programme in 2022 to cover the £46.8m costs which were expected to be covered by the authority's own borrowing and capital resources.
Forge Island is funded by a loan that will not be charged until April 2026, a year after scheme completion. The Council doesn’t take specific loans out on a scheme by scheme basis, but borrows in accordance with need and cashflow combined with investments, as part of its treasury management activity.
Cllr. Taylor added: "The actual final cost of the project is not yet known, whilst the structures are largely completed, part of the project budget was a contribution towards the fit out of the units. As only some of the units are currently tenanted and open, the contribution to the fit out of the remaining ones is still to be paid. As such, the final project costs are not yet complete. However, it is still expected that the project will be completed within the £47.4m budget agreed by Cabinet in October 2022."
Vetro Lounge, a new neighbourhood bar, has recently been confirmed as the first food and drink venue to open at Forge Island.
Fit out relates to building an interior space, making it suitable for occupation.
Capital contributions from landlords are common in the leisure sector. It has been reported that Barnsley Council paid £2m to Cineworld and £1m to TGI Fridays as part of its town centre development, Glass Works.
Rotherham Council had £8m in its budget for Forge Island in 2024/25 but nothing for 25/26. It has regularly paid parnter, Muse Developments, with records showing payments such as £1,043,288 in September 2024, £1,187,143 and £1,814,858 in July 2024 and £1,691,564 in April 2024.
Forge Island website
Images: Muse / Google Maps