Birkenhead’s Vue cinema and a centre that once housed the town’s Wilko store have lost millions of pounds in value since they were bought by Wirral Council.
In 2017, Wirral Council decided to buy the Europa Centre which used to house a Wilko store for £8.4m and in 2019, it reportedly bought the Vue Cinema in Birkenhead for £6.8m, though council reports at the time said this figure was £7.1m The properties near Conway Street were both bought for regeneration purposes but since then, the Vue Cinema has lost £1.7m in value while the Europa Centre has lost £4.27m in value.
However, other investment properties owned by the council have seen a £1m increase in value though the current value of the Pyramids and The Grange Shopping Centre, which the local authority bought in 2023, is set to be valued later this year.
A Wirral Council investment strategy report said the valuations of the buildings done in March 2023 “reflect the specific circumstances at that time, directly attributable to pressures arising due to the economic climate” and these can change. For example, the Vue Cinema is nearly £1.5m more valuable than it was in 2022.
The millions lost since the council bought the properties were revealed ahead of a senior Policy and Resources committee meeting on 13 February where councillors will discuss how the local authority will balance its budget this year including a council tax rise as well as a number of financial reports.
Wirral Council leader Cllr Paul Stuart said, “While there is still work to do to get the council’s finances where we want, there is no doubt they are in a vastly improved position following the difficult work done to identify and achieve considerable savings in recent years,” adding if the local authority sets a budget this year, “Wirral Council will be ready to look ahead to delivering for the people of the borough with confidence.”
A budget report published in 2023 said the Europa building was expected to earn £139,000 in rent once borrowing costs were factored in while the Vue Cinema was expected to bring rental income of £41,000.
However, the local authority is also set to see a £200,000 loss linked to the Europa Centre following the closure of Wilko after it went into administration, though it is “working closely with administrators to review a way forward alongside continued strategic asset management with potential future tenants.”
It will also need to write off nearly £80,000 of outstanding debts that are unable to be paid by administrators.
Wirral Council is also expected to continue selling off more of its assets to raise money which can then be spent on other projects such as regeneration.
In the current financial year, it expects to make just over £3m doing this, with nearly £3.5m more by March 2025 and more than £13m in the three years after that with a total of £19.6m over the five years.
Some of this will be used to fund developments and improve council assets with £4.5m spent between April 2024 and March 2025 doing this.
Lead image: The former Wilko store in Birkenhead. Credit: Edward Barnes