The twisted red mass of tubes next to the Olympic Stadium that was supposed to be a local landmark is proving to be more of a millstone for the Queen Elizabeth Park.
The ArcelorMittal Orbit was supposed to be one of the highlights of the Olympic Park, the UK’s largest artwork and lasting legacy. However, far from bringing in visitors from far and wide to admire the views, visitor numbers are slumping, it runs at a loss, and is racking up a pile of debt.
According to the latest financial statements from the LLDC which runs the 2012 Olympics legacy developments in the park, the Orbit attracted 155,000 visitors in the previous financial year – down on the 180,000 a year earlier, and the 193,000 visitors in 2016/17, when visitor numbers spiked following the publicity about the new slide that had just been added.
Even that was far short of the original estimates of 350,000 people visiting each year.
Part of the difficulty with the Orbit is that while it’s visually distinctive locally, to the average passerby the height is lacking in terms of luring people up to see the views from it. That the views are also restricted in some areas by the structure itself doesn’t help.
With revenues of just £1.79 million, and operating costs of £1.86 million, the Orbit reported a lost of £58,000 last year.
A loan of £13 million (£9.2m plus unpaid interest), to part fund the construction of the ArcelorMittal Orbit needs to be repaid to ArcelorMittal from future profits from the operation of the Orbit when, or is that “if” they are generated.
At the moment, the LLDC records the carrying value of the loan at nil, and recognises a liability for the loan should it need to be repaid. At the time of its construction, ArcelorMittal funded up to £19 million of the £24 million project (£10 million donation, and £9 million loan) with the outstanding £3.1 million provided by the London Development Agency.
Despite the £24 million spent building the Orbit, the LLDC now values it at just £4.8m on the basis of the earnings that could be generated from operating the attraction.