Spinnaker Tower Operator

Portsmouth City Council - the 'Council - will shortly be inviting tenders from suitably qualified and experienced operators for the operation of the Spinnaker Tower - the 'Tower' - on a long term mutually incentivised partnership basis. The Tower The Spinnaker Tower is located on the waterfront within Gunwharf Quays shopping centre and is a prominent landmark offering views of the city, the Solent and the Isle of Wight. It is visible to the nine million passengers who sail and cruise through Portsmouth Harbour each year as well as the eight million visitors to Gunwharf Quays which offers outlet designer shopping. The Tower is Portsmouth's most prominent landmark, 170m in height with 3 upper viewing platforms at 100, 105 and 110 metres providing views of Portsmouth Harbour and the Solent. The tower opened in 2005 attracting 100,000 visitors in the first two months of opening. There is a reception at the base of the building with ancillary interpretation space, entertainment and leisure uses, ticketing, plant, management and staff facilities. There are two cafes - the ground floor Spinnaker Kitchen and Bar and the Cloud Café located on View Deck 2, 105 metres up. There is an additional podium area at ground level which is activated over the festive period for a Christmas market, with potential for it to be used permanently as commercial space. Permitted Uses, Opening Times & Access Under the new contract the primary function of the Tower must remain a public viewing tower, to be open in line with hours set out within the Council's specification. Through the procurement process suggestions for incorporation of historical and maritime components, that may also include literary and cultural references associated with the wider city, will be considered. The Operator must ensure that the Tower is open to the public for a minimum of 8 hours/day April to September and 6 hours/day October to March except Christmas Day. Core opening times are 10.00 - 18.00 during summer months and 6 hours within the core times during the winter months (e.g.10.00 - 16.00). The Operator may open earlier or later to support other activities such as breakfasts or evening events and functions. No curfew has been set. The Council will require use of the Tower for its own direct activities and in support of wider community activities to a total of 47 hours free of charge per year, further details are provided within the specification. Suggestions for complementary ancillary uses will be permitted. Examples include but are not limited to: • Food and beverage options such as a café, fine dining etc. • Entertainment including comedy evenings, cocktail evenings etc. • Virtual reality 'thrill experiences' • Private Functions including weddings, corporate events etc. Proposals for other activities / experiences will be considered. Suggestions for the use of the overall space, including the associated capital investment, will be considered. For example, the opportunity for development of the underused podium deck. Any investment must be solely funded by the operator. Contract Term, Estimated Value & Target Commercials Award of the contract is targeted for 7th August 2026. The successful operator will be required to seamlessly commence operations under a lease with associated concession arrangement from 11th October 2026 following expiry of the lease held with the current incumbent operator on 10th October 2026. The lease and associated concession contract will be let on a 25-year basis. Break clauses subject to 12 months notice will be included for at years 10, 15 and 20 of the lease. The lease will be subject to rental / management fee and revenue share payments from the operator to the Council. The Council is targeting a guaranteed rental payment of £350k total over the initial 3 years of the lease to allow for profiling of rent in view of mobilisation costs, building up sales and the impact in the 1st year of the Council's planned lift refurbishment works. From year 4 onwards the target average per annum payment thereafter has been set at £220k. Rental payments are to be made in advance on a quarterly basis per annum. Lease payments will be subject to 5 yearly rent reviews with increases subject to CPI adjustments. A minimum revenue share % of 3% will apply with operators able to bid back an increased share % up to a maximum of 10%. The revenue share proposed by operators may vary over the term of the agreement but must always be within the 3% - 10% min / max range stated. Revenue share payments are to be made within 30 days at the end of each contract year. In addition to rental and revenue share payments, the Council will also recover reinstatement insurance premium costs from the Operator. The Council is currently seeking specialist insurance advice which will inform the per annum figure to be accounted for within Operator commercial models. The Council is targeting to issue an insurance cost recovery value by week 3 - 4 of the tender period. The Council will reserve the right to alter and refine rent and revenue targets over the course of the procurement process and may issue revisions which alter the values and / or introduce pass/fail value requirements following evaluation of 1st stage tenders and completion of negotiation meetings in the event that the Council opts to undertake a 2nd stage of competitive tendering. The contract will be subject open book reporting. The Operator will be required to report on revenues generated by business activities on a quarterly basis and upon request within 10 working days along with provision of supporting evidence. At the end of each operating year the Operator will be required to produce full audited accounts for operation of the Tower, providing full details of sales, costs, O/H contribution, profits, dividends, etc. Based upon current revenue and subject to indexation the Council estimates that the successful Operator could achieve a 25-year turnover figure of approx. £90M. However, the Council considers that there are significant opportunities to increase revenue though investment, diversification of activities, food & beverage offer, sponsorship, advertising, etc. which could have a major positive impact upon revenue generation, potentially increasing revenue generation to £110M and beyond over the 25 year term. However, it should be noted that all estimates in respect of the value of the business opportunity are purely indicative and provided to comply with the requirements of the Procurement Act 23 in relation to publication of estimated contract values. Maintenance, Servicing & Facilities Management The Council will retain responsibility for the repair and maintenance of the items listed below which are further detailed within the procurement documents: • External Structure Works and inspections including the spire, view decks, tower legs, concrete shafts, ribs, bows, transfer landings and substructure, but excluding the base building and podium level. • Structural Glazing and Curtain Walling System on View Decks The Council is also progressing with lift refurbishment and other structural maintenance works which are currently scheduled to take place during the 1st year of the lease. Operators should be aware that a closure period for the viewing tower will be required to undertake these works. The exact length and scheduling of these works have yet to be confirmed but are likely to be approximately 6 months in duration. The Council will fund and deliver the works and will work with the Operator to agree the timing of any closures where possible. Operators should note that future lift refurbishment / replacement responsibility will fall with the Operator. The Operator will be responsible for all internal repairs and maintenance and to keep the property in good repair and condition including, but not limited to: • Reactive repairs and planned maintenance • Decorations and finishes • Fixtures and fittings • Sanitary facilities • Bar and kitchen areas • Surfaces in plant rooms, internally to the bows and spire The Operator will be responsible for the following external repairs and maintenance and to keep the property in good repair and condition including, but not limited to: • Base building - Floors, Walls and Roof • Podium level • Doors and Windows • External decoration works of the legs, concrete shafts, ribs, bows, transfer landings, base building, podium level, brise soleil etc. • Paving surrounding the tower and at podium level • Balustrades/Handrails round the podium level, podium stairs, terrace level and promenade level The Operator will be required to undertake all Planned Preventative Maintenance (PPM) and reactive repairs including maintenance, servicing and replacement (both minor and major) to those building elements highlighted as tenant responsibility. The Operator is responsible to keep all M&E, both internal and external to the Tower, in good condition and maintenance including, but not limited to: • Servicing • Reactive and Planned Repairs/Maintenance • Surveys • Lifecycle replacement • Lift maintenance / replacement The Operator shall provide the M&E maintenance service through a regular and organised regime and provide the Council with records of the works such as EICRs etc. Beyond the maintenance activities listed above, the Operator will be responsible for all building management activities required to ensure that the Tower is kept safe, clean and secure, including for: • Statutory Compliance Testing • Heating & Lighting • Cleaning • Security • Utilities and Environmental Management • Fire Detection & Emergency Lighting • Accessibility, Health & Safety and Safeguarding