The council-run Sail Loft Coastal Kitchen on South Parade in West Kirby is set to close down.
The cafe, above Wirral Watersports Centre, opened in July 2021 – but its trade has been hit by the work on the flood defence scheme which restricted parking and access, as well as the rising cost of energy and supplies.
A report to councillors to be considered at the tourism, communities, culture and leisure committee meeting on 21 September forecasts that its budget will be overspent by £164,000 this year.
When combined with the £155k net subsidy in 2022/23, it means it could be on course to have racked up losses of £320,000 in just two years.
Officers are recommending it is shut at the end of October, with a view to leasing the building to a private operator by next summer. Based on figures from 2019, it is thought a lease could generate an annual income of £30,000 for the council.
The report states: “The facility was built between 2019 and 2021 and opened in July 2021 during the COVID 19 pandemic. The venue has since been affected by rising economic costs beyond the control of the service. Improvements to areas of public open space in the immediate area, including construction of the sea defence wall has restricted parking, access, and overall trade to the venue. Consequently, the venue has failed to operate at a surplus and is incurring losses for the Council.
“The venue is however, affected by seasonal demands, and whilst trade does increase in the summer months, there is a significant and noticeable decline during winter.
“Irrespective of the challenges the venue has faced during and post-pandemic, there is no guarantee that if the Council retained the facility, it would operate without a financial subsidy.”
The 13 staff would be redeployed within the local authority, or could be transferred across to a new operator in the event that it reopens as a hospitality venue.
The report says that alternative options – either doing nothing or moving to seasonal opening – are not recommended due to the ongoing financial risk.
