A BUSINESS park bought by Monmouthshire Council as a commercial investment is facing a budget shortfall of more than £1m next year, after it was announced that a communication giant founded by one of Wales’ richest men was upping sticks and leaving the site.

Global firm Mitel Networks, sold in a £1.43bn deal four years ago, has had a base at Castlegate Business Park in Caldicot since 1983.But news that the business, co-founded by Celtic Manor owner Sir Terry Matthews in 1972, won’t be renewing its lease in March, has left the council with a big hole in its budget.Mitel, which also has a base in Bracknell, has declined to comment on its future plans.But council chiefs admit that the telecommunications equipment giant’s exit will have "a significant impact" on rental income.Castlegate was bought by the council for £7m in 2018, and with Newport Leisure Park is one of two investment buys it owns, which have a joint income target of £609,000 a year.But documents for the 2022/23 budget show that Castlegate, which was expected to generate £209,000, is now expected to make a loss of £880,274 - a shortfall of £1.089mExpenditure on the site is estimated at £1.35m for the next financial year, but income is predicted to be just £470,356.Newport Leisure Park is expected to generate £300,067, which is just 75 per cent of its £400,000 income target.The combined projected shortfall in income of the two assets is nearly £1.2m.But a council spokeswoman said the budget forecast "highlights the worst case position and we are optimistic that on-going discussions will result in a reduction to the highlighted pressures".The council is proposing to use the entire £539,056 balance of its ’sinking fund’, which has been created using surplus income from the assets, to help meet the shortfall, leaving a budget pressure of £650,151.A council report says: "It is acknowledged that the pandemic has accelerated structural changes in the office market and Castlegate now needs to respond to those changes so that the site can become an attractive proposition for future occupiers."This may involve landlord refurbishments and tenant inducements which will have a short-term negative impact on the financial performance, however, would safeguard a longer-term income position."The report says a review of the investment portfolio was discussed at an investment committee meeting on November 9, "together with the options of retention or disposal".The council has decided to retain both Castlegate and Newport Leisure Park, which was bought for £21m in 2019 and has seen its income impacted by the last two years of pandemic.A council spokeswoman said the authority is in discussions with prospective occupiers for Castlegate Business Park.It says it is also planning a marketing campaign and a review of the service charge is being carried out "to reflect the reduced occupancy levels".At the time of CastleGate’s purchase, current deputy council leader Cllr Bob Greenland (Devauden, Welsh Con) said: "The acquisition helps take forward a number of our strategic goals and is a clear demonstration to investors nationally and internationally that Monmouthshire is a great place to do business."Monmouthshire has never been afraid to take a commercial approach, to innovate and be creative where it helps us to promote the vitality of our county."Sir Terry, who grew up in Newbridge, founded Mitel in Canada with fellow Briton and Microsystems employee Michael Cowpland 50 years ago, initially as an electric lawnmower business.Mitel then became a technology consultancy company run from home in Ottawa’s emerging high-tech district, developing a tone receiver which was a fraction of the cost of competing versions, and later became a chip manufacturer.