London Eye - Financial Difficulties

Financial Difficulties

On 20 May 2005, there were reports of a leaked letter showing that the South Bank Centre (SBC)—owners of part of the land on which the struts of the Eye are located—had served a notice to quit on the attraction along with a demand for an increase in rent from £64,000 per year to £2.5 million, which the operators rejected as unaffordable.

On 25 May 2005, London mayor Ken Livingstone vowed that the landmark would remain in London. He also pledged that if the dispute was not resolved he would use his powers to ask the London Development Agency to issue a compulsory purchase order. The land in question is a small part of the Jubilee Gardens, which was given to the SBC for £1 when the Greater London Council was broken up.

The South Bank Centre and the British Airways London Eye agreed on a 25-year lease on 8 February 2006 after a judicial review over the rent dispute. The lease agreement meant that the South Bank Centre, a publicly funded charity, would receive at least £500,000 a year from the attraction, the status of which is secured for the foreseeable future. Tussauds also announced the acquisition of the entire one-third interests of British Airways and the Marks Barfield family in the Eye as well as the outstanding debt to BA. These agreements gave Tussauds 100% ownership of the Eye and resolved the debt from the Eye's construction loan from British Airways, which stood at more than £150 million by mid 2005 and had been increasing at 25% per annum.