Colchester Council sets aside £4m reserve in Northern Gateway project

The new reserve, entitled Turnstone, was created at the most recent Colchester Council Governance and Audit Committee Meeting.

It came less than 30 days before the council announced that Cineworld had pulled out of Northern Gateway.

According to the meeting’s agenda notes, the reserve was created to recognise the “updated commercial risk that the council faces from the Turnstone lease arrangement”.

The council also recognised there “will be delay and uncertainty” until a plan is agreed, and the council will remain in “close contact” with other tenants already in operation at the site and prospective tenants.

Tiptree councillor and Conservative group leader for Colchester, Paul Dundas, is concerned.

Concerned - councillor Paul Dundas (Image: Newsquest) He said: "The financial dangers around this project are something which has concerned us as the opposition party for some time. We have constantly been asking questions around it.

"The fact that the council has felt the need to set aside £4 million to cover potential short-term losses on this project shows the magnitude of the problem.

"The £4m of Colchester council tax payers' money which will not be available to spend on services including waste collection, parks, grass cutting and even Castle Park toilets because it has been lost on a speculative commercial venture.”

However, in the short term, he says the Cineworld situation “is going to be a costly exercise to the council and residents.”

A spokesman for Colchester Council has described the Turnstone Reserve as a “prudent financial measure” to ensure the council can manage potential risks associated with commercial lease arrangements.

Growing - many restaurants are yet to open at the Northern Gateway site (Image: Newsquest)

They also said: “As a responsible council, we regularly review and update our financial strategies to ensure that we are well-prepared for any commercial uncertainties that may arise in any development.

“The reserve is intended to mitigate potential risks and to be deployed only if necessary.

“We remain fully committed to Colchester Leisure Park. We understand the uncertainty caused by the delay to the cinema opening, given Cineworld’s insolvency.

“But this remains a great site and location, with the hotel, Hollywood Bowl and other operators open, and more to come.

“We are in discussion with all parties involved in Colchester Leisure Park and remain very focused on ensuring its long-term success for residents and businesses.

“Those discussions include alternative cinema operators and other potential tenants.”

The council said earlier this week that "serious discussions" were ongoing with two cinema operators to take over the now-vacant Cineworld site.

Colchester Council leader David King said: "We know that the cinema industry is on the up, and we know from expert advice that the cinema industry is expecting a resurgence in summer 2025.

"We're confident of bringing in an alternative cinema."

Council leader - Councillor David King at Northern Gateway Leisure Park (Image: Newsquest) When asked about who the two operators are, Mr King would not reveal this.

He confirmed the cinema industry is full of "small, specialist, medium, and large operators" and "they are in touch with many" but "in serious discussion with two."

Looking to the future, Mr King confirmed the council's "timing fits" with the expected summer 2025 cinema resurgence but said it is "too early to predict" when an new operator might open.

He said: "We have to have the negotiations, discussions and get the best deal we can.

"But we are really hopeful that we will conclude an understanding with another operator and we look forward to announcing that."