£7.5m loan extension will keep AECC afloat

Aberdeen councillors have agreed to extend the deadline of a £7.5m loan repayment to keep the Aberdeen Exhibition and Conference Centre (AECC) afloat. The centre – the largest in the north east of Scotland – will now have until 2017 to repay the loan. The council has loaned the AECC £28m in the past five years, which has gone into the redevelopment of the centre.

Meanwhile six jobs have been cut at the AECC – two unfilled vacancies and four voluntary redundancies in operations and catering – and staff pay has been frozen for a year in response to a reduced level of council subvention funding towards the centre’s annual operating costs.

Brian Horsburgh, AECC’s managing director, said the repayment ruling is positive news for the centre. “The fundamental problem here was the loan was granted on what I deem to be ridiculously short terms, six years after it was granted. We don’t have the money now.”

Horsburgh adds the measures will also keep alive the AECC’s plans for the development of a new hotel at the centre. “We have been working to get the hotel development off the ground for a number of years with the intention that once it is completed it would be sold off to an investor, with any gain going towards offsetting the loan. Unfortunately it has been dogged by delays, the recession and the banking crisis.

“Having a new four-star hotel on-site will be an important part of AECC’s infrastructure going forward. It will obviously create local jobs – both during the construction phase and once the hotel is operational – and it will also enable AECC to compete for more major international conference and event business in the future. The decision also gives us a realistic chance of having the hotel up and running by next September, when Aberdeen will play host to both Offshore Europe 2011 and golf’s Walker Cup competition – events which are expected to attract more than 50,000 visitors to the area, meaning accommodation in the city will be at a premium."

Horsburgh added that while both Glasgow’s Scottish Exhibition and Conference Centre and the Edinburgh International Conference Centre had received “substantial funding” from national development agency Scottish Enterprise for their major redevelopment schemes, Aberdeen was relying on local government funding: “It’s not quite a level playing field.”

Horsburgh was pleased that the council has agreed to again approach the Scottish Government with a view to it re-classifying AECC as the country’s National Energy Exhibition and Conference Centre, though he did not believe recognition would open up funding channels; rather it would suggest that Aberdeen should be the natural home to any energy-related event the government supports in future.

Commenting on the job cuts at the AECC, he added: “Our venue has not been immune to the recession, but we are noticing an uplift in business in the second half of 2010 and we may have to recruit for those redundant positions again.”

Aberdeen City Council director of enterprise, planning and infrastructure, Gordon McIntosh, said: "The package of measures approved should go a long way to supporting the AECC to build on its success in attracting an increasing number of conferences and exhibitions to the city.”

A further £2m in debt due to the council has been converted into shares in the centre, while three of the eight councillors on the AECC board will be replaced with business experts from the private sector.