WALTHAMSTOW: Arcade site bail-out plan "may be profitable" says councillor

Labour members on the council's cabinet last month voted through a decision to fund the redevelopment project with £35m of taxpayers' money, following a decision by St Modwen to withdraw from financing the scheme.

Cllr Terry Wheeler, the council's cabinet member for investment said: "The cost is still £35m but the council instead of the developer will be borrowing the money, to be repaid by the final owners - the council only pays for its pool.

"It became necessary for the financing to be done this way because of the inclusion of the swimming pool.

"The council regularly borrows to support its capital programme and may profit by the arrangement. The project risk stays with the developer.

"We must get on with the Arcade and give our residents and the economy a much-needed boost, the alternative is an empty site for years to come."

Cllr Wheeler's comments appear to contradict the cabinet report informing the decision, which makes it clear that risk will be transferred to the taxpayer.

The plan has alarmed residents and councillors from the Lib Dem and Conservative groups, who believe they have not had enough information about the feasibility of using a swimming pool as an "anchor tenant" to attract businesses, and how the council will borrow the funds and whether it will be able to pay the money back.

The Conservative group has now requested the decision be debated at an extraordinary meeting of the full council, allowing all members to debate the plan.

The council would not be able to reverse the decision, it could only be able to request the cabinet re-consider the scheme.

Cllr Wheeler has said the council will be able to recoup the £35m by selling the Waltham Forest Pool & Track site, in Chingford Road, Walthamstow and by selling or letting units on the Arcade site itself.

St Modwen will still be paid £500,000 for design work.