A leading tourist attraction and popular community leisure facility could be reopened within months, it has emerged, after administrators offered the asset back to a local authority which owns the site.

Insolvency consultants MHA said North Yorkshire Council had been advised it could not immediately restart trading at Alpamare water park in Scarborough following the firm behind the development, Benchmark Leisure, going into administration last month.

However, the council has been advised the water park and other assets developed by Benchmark, including Scarborough Open Air Theatre, would revert to them.

MHA, which has confirmed Benchmark received a loan in the form of a lease from Scarborough Borough Council in 2013, has told its successor authority North Yorkshire that the water park was not needed for the purpose of administration, as a firm formerly known as Alpamare had been the facility’s operating company.

MHA is examining what, if anything, is owed to Benchmark’s creditors.

The development comes days after a full meeting of North Yorkshire Council heard the authority would launch a detailed investigation into the £9m deal which led to the water park being built for a reported £14m, amid claims the venture was based on an “unrealistic” forecast of about 10,000 visitors a week.

The meeting heard many residents wanted to see the facility, which has hosted swimming lessons and fitness classes, reopened as soon as possible.

In 2022 it was claimed Benchmark owed £7.8m of public money and financial documents show a statutory demand from the council had passed leading to a threat of a winding up petition.

MHA said a lot of Benchmark’s debt related to the Covid lockdown periods and times when utility costs went up significantly and if the water park was equated to the value of the amount of money outstanding “it should not be a significant loss to the public purse”.

Administrators said following its closure Benchmark’s parent company, Abbey Group, was maintaining the facility, which opened in 2016 and features an outdoor infinity pool overlooking the North Sea and a four-person waterslide, keeping the pools heated and employing a skeleton staff.

An MHA spokesman said: “Administrators cannot market the asset it because Benchmark did not own it due to the form of the lease.

“Administrators have looked to see if it is viable to restart trading and sought funding from the council and the parent company, but neither came forward with funding. The water park has been offered up back to the council effectively. The ball is very much in their court.

“The fact that the principle asset reverts to them, along with a number of other assets which have been enhanced such as the outdoor theatre, the administrator’s role is to go through the detailed contractual position and work out if there is a realisation to be made for Benchmark’s creditors.

“If the council is now sitting on the lease – or might well be shortly as it has a few procedures to go through – it looks if the council gets the site back they’ve got quite a valuable asset.

“I don’t think they are going to be significantly exposed, which is obviously good for the public purse, but then the question becomes what happens to the funds that have been invested as the various sites have been through the various developments?”

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When asked if residents were facing a lengthy wait before the facility could be reopened, the administrator said: “I expect it is a high priority of the council to get it reopened and as administrator we are certainly not going to stand in their way. As the administrator it wasn’t possible to do it out of season and without some significant funding from one of the two parties.”

“I would welcome a meaningful conversation with the council because there just needs to be some fair reckoning up of value. They have possibly been a little bit slow to engage over this.”

The council’s assistant director for commercial, property and
procurement, Kerry Metcalfe, said: “We have been in contact with the administrators and are considering all options available to us at this time with a view to minimising the impact on us and the Scarborough area.”