If a re-opened Otley Civic Centre fails it could land the town with an annual bill of £250,000.

That was the dramatic warning made at a meeting this week by councillors unconvinced by claims of how much income a revamped centre could generate.

A new feasibility study for the Grade II Listed building estimates that it could, as a major entertainment venue, bring in £179,000 per year after five years – though annual running costs would be nearly £266,000.

The document has now been handed to the property’s owners, Leeds City Council, who will use it to decide whether or not to finance a multi-million pound refurbishment.

The study envisages the town council taking out a £600,000 loan (to be paid back, as part of the annual costs, at £30,000 a year) to support the project, and providing an initial subsidy, but many councillors at Monday’s policy and resources committee expressed scepticism.

Liberal Democrat group leader Councillor Jim Spencer (Lib Dem, West Chevin) said: “The £179.000 a year income I think is way too optimistic. This is my main concern and it worries me hugely. It’s a huge amount of money and it’s a big ask.”

Councillor Mary Vickers (Lib Dem, Prince Henry) agreed: “It’s a bit of a dream and the figures don’t stack up.”

Councillor Colin Campbell (Lib Dem, Prince Henry) said: “Are the proposals here what the people of Otley want and, if so, how can we be sure it doesn’t come in at a cost we can’t meet?

“Because the town council will, in the end, have to underwrite this.

“We all want this to work but we have to be clear we understand that it’s a significant financial commitment to the council. And if it goes wrong it’s a very considerable financial commitment.

“If everything went wrong it’s £250,000 a year.”

Councillor Sandy Lay (Lib Dem, Danefield) said: “My heart would love this document to be deliverable but I’m worried about the significant costs attributed to this, and the liability.

“If it fails it’s the people of Otley who will have to pick it up if we take on the liability.

“This is such a major decision I would like to see it go to a referendum.”

Councillors Nigel Francis (Ind, Danefield) and Pauline Spencer (Lib Dem, Ashfield) went further, and questioned whether the Civic Centre actually had a future.

Coun Francis said: “It is an iconic building, but is it commercially viable to run it?”

The feasibility study was drawn up by a cross-party working group, and Council leader Councillor John Eveleigh (Lab, Ashfield) stood by its findings. He said: “For the first five years there will need to be a subsidy but hopefully, after that, we think this has a better than evens chance of actually working.”

Councillor Carl Morris (Lab, Manor) said the study’s figures, should Leeds be convinced, would be independently audited before anything moved forward.

The council agreed to accept the study as a “starting point for revenue assumptions”.