MAJOR plans to replace the Sun Centre and upgrade the Nova Centre in Prestatyn could present “many risks”, a report has said.
They include the closure of the Pavilion Theatre for a significant period of time as well as the possibility a development partner for the plans may not be found or the plans might not be cost-effective.
Denbighshire Council is still waiting to take back control of the sites, along with the North Wales Bowls Centre, after operator Clwyd Leisure went into administration on Friday.
A document setting out the council's future plans for upgrading the leisure and tourism offer in Rhyl and Prestatyn, says a redevelopment of the Nova "may not deliver sufficient operating profit to secure the necessary revenue savings and pay for the capital costs."
Plans to replace the Sun Centre involve a £10million aquatic center set to be built near the Sky Tower and the demolition of the current building.
The report, which will be discussed at Tuesday’s council cabinet meeting, says plans for the new aquatic centre are to "adopt a preferred developer" and to invite expressions of interest from developers.
It says "This will include development opportunities in all council facilities/land/assets along Rhyl Promenade from Marine Lake to Splash Point.
"The overall project is beyond the financial capacity of the council at this time and external grant and private sector funding is required.
"However the private sector on its own is unlikely to see this as a sufficiently attractive investment opportunity, with returns on investment constrained.
"Therefore a shared private and public partnership approach is more likely to be achievable."
Developers will be invited to submit proposals before September while a period of exclusive negotiations with the developer identified as preferred to start in October.
The council says the scale of works for the Nova is smaller and less complex and it is possible for the council to progress on its own.
The report said: “Redevelopment of the Nova has the potential to secure a wholly self- financing model freeing up revenue savings for investment in the Rhyl Coastal Facilities offer.
“The critical affordability test will be that the operation of a ‘new Nova’ in Prestatyn can deliver a net surplus sufficient to pay for the building as well as future running costs.
“A feasibility study to include a latent demand analysis will inform an appraisal of design and build options for Prestatyn.”
It is currently estimated that the feasibility study will be completed by the beginning of April.
However the report includes a statement from the council’s chief finance officer which reads: “The redevelopment of the coastal facilities is a major part of the council's development strategy.
“Once the market testing and design works have been carried out, we will be in a better position to evaluate the costs and risks of the proposals.
"This is a major, complex project needing to proceed in the most difficult financial times and there will be many risks that could impact on the progress and key stage decisions e.g. securing funding is not simple – it demands sequencing to use revenue and minimise disruption.
"The Nova development proposals may not deliver sufficient operating profit to secure the necessary revenue savings and pay for the capital costs.
“The Invitation for Expressions of Interest may not secure an appropriate development partner.
“Maintaining service continuity will be difficult to achieve.
“The ultimate demolition of the Sun Centre may close the Pavilion for a significant period.
“The refurbishment of the Nova will demand a period of closure.”