THE cost of bailing out the failing Red Lion Quarter in Spalding could be more than £400,000 for the taxpayer.
South Holland District Council has agreed to clear the debts at the troubled town centre venue – and will also write off a loan it gave the Red Lion Quarter and pay the running costs until next March.
The council’s cabinet will have to decide what it wants to do with the centre on Tuesday, when it will be asked to back the bail out and consider closing the food court until March.
The Red Lion Quarter had been run by a Community Interest Company (CIC) – but that will now be scrapped, its debts of £90,000 paid and a loan of £120,000 from the council to the CIC written off.
The council wants to find a new firm to run the centre but expects that process to take until the end of February. In the meantime it has two options:
l Keep the food court open and pay £181,145;
l Close the food court until a new owner is found and relaunch it in March, costing £98,460.
Officers also want £30,000 to be set aside for “unforeseen or unquantifiable liabilities” and will ask interim managers Norfolk and Waveney Enterprise Services (NWES) to stay on until a private firm is found to run the Red Lion Quarter.
Bosses at the council want members to agree to closing the food hall, the cheaper of the two options, which would leave a total cost of £338,460.
If members want to keep the food court open it will cost £421,145. The cash for both would come from the authority’s general fund.
Staff at the food court have been warned that their future is “uncertain” in light of the plans.
Last week three office units were let and the middle floor is taken by South Lincolnshire College.
A report to the cabinet states: “The financial pressures experienced by the Community Interest Company and liabilities incurred are not the responsibility of the council; however, the council recognises that the business has an important part to play in the long term future of Spalding.
“The combination of the college’s presence, a revised and robust business plan and the encouragement of new businesses into the town, suggests long term benefits will outweigh those problems experienced to date.”
The Red Lion Quarter was developed through a partnership of bodies including South Holland District Council, East Midlands Development Agency, Boston College and Lincolnshire County Council.