THE leader of Swansea Council has fielded questions about how a £134 million city centre transformation will be paid for, days before the biggest decision yet on the project.
Cllr Rob Stewart defended the borrowing arrangements for Swansea Central phase one, which includes the 3,500-capacity indoor arena – and rebuked the Wales Audit Office for a letter in which it raised concerns about “impending decisions that may significantly heighten the council’s financial risk”.
The Swansea Labour leader said: “I think the auditor was out of line.”
Cabinet will decide on November 21 whether to commit £110 million to the scheme, having already approved £24 million to date.
Assuming the £110 million is given the green light, the main contractor is expected to start work at the arena site by the LC in a matter of days.
The arena will sit alongside a new coastal park – both atop a new car park.
A new multi-storey car park, 36 flats and 15 retail units will also be built the other side of Oystermouth Road, with the two sites linked by a new pedestrian bridge. A hotel will also be built next to the arena, but this will financed and delivered separately.
Addressing a council scrutiny meeting where the Wales Audit Office’s letter – which mentioned Swansea Central phase one in the context of ongoing council difficulties in balancing the books – was raised, Cllr Stewart said: “I feel that the auditor took a misstep with that statement.
“I think the comments were ill-judged.”
The Labour leader said the auditor had not seen the latest Swansea Central phase one sums, which include new revenue for the council.
But he said he agreed with the letter’s overall content, and added that the council had taken steps to avoid an end-of-year deficit.
“I am confident that, as of outturn (end of the financial year), we will be in a largely balanced position,” he said.
Council chiefs were due to meet the Wales Audit Office on October 29 to discuss these issues, but the meeting was cancelled.
While the council is borrowing all the money to deliver phase one, it is due to receive £23 million via the city deal for the region and just under £5 million for the sale of the 36 flats, plus further potential grants.
Finance chiefs have built up a pot of money to cover all the borrowing until 2026, but after that the council will need to find £7 million repayment costs annually for around 40 years.
Cllr Stewart, however, told the meeting that the pot of money set aside could be extended – and that more income could be generated than the current £1.7 million per year forecast because decisions on car parking costs and new shop leases hadn’t been made yet.
Swansea Central phase one is due to boost the city’s economy by £17 million per year, create 600 long-term jobs, attract 230,000 visitors annually to the arena, and provide reassurance for a raft of other development projects across the city.
Cllr Will Thomas asked if it was “slightly hypocritical” for the arena to have 70,000 exterior lights, given that the council had declared a climate emergency in June.
Cllr Stewart said delivering just a “box” would lack the impact of what is planned, and that the LED lights were low power.
Huw Mowbray, the council’s property development manager, said the 70,000 lights would cost around £3,500 per year, and last for some 27 years.
The arena is due to open in 2021.
Cllr Peter Jones said he welcomed the new trees, greenery and bird boxes which would be delivered as part of phase one.
“This is fantastic,” he said. “We should be proud of what the scheme can do.”
Cllr Chris Holley, who chaired the meeting, said the panel would submit its findings to cabinet and that the overall view was that while repayments were covered until 2026, there was a “tipping point” afterwards which would affect the council’s revenue.