New fears have emerged about the viability of the stalled Cork event centre process after the classification of €9m State funding as a loan.
The Irish Examiner has learned that Cork City Council plans to seek legal advice on the Department of Art’s decision to classify €9m of the increased €30m State injection into the development of the 6,000-capacity venue on South Main St as “a repayable loan”.
There are real fears that unless new talks on a repayment mechanism can be agreed, the entire process, which has been dragging on since 2014, is at risk.
Lord Mayor, Cllr Mick Finn, has written to the key parties involved, calling for round-table talks to thrash out the outstanding issues.
“This project is crucial for not just the city, but the region. It is one of the key triggers for the future of the city,” he said.
“I would call on all parties involved, including the Tánaiste, to overcome the remaining challenges, and to iron out what residual issues that are left.”
The Tánaiste was not available for comment over the weekend.
Just before Christmas, the department confirmed that following detailed consideration of the city council’s request for additional funding, and in light of the extra works required to deliver a slightly larger events centre, the total public funding could be increased by €10m to €30m, in accordance with public procurement rules.
It told the council on December 21 that the funding would be made up of grant aid of €21m and a repayable €9m loan to the developers, BAM.
Talks between the department, Cork City Council, BAM and venue operators Live Nation have begun to discuss all aspects of the public funding elements.
The talks are taking place against the background of a request from the department to the city council asking it to outline its view, and that of BAM, in relation to the loan element. It is also understood the department has sought written assurances from the city that no further public funding will be required for this project.
The city’s head of planning, Pat Ledwidge, who is overseeing the council’s tender process with BAM, said: “We are looking at the implications of the department’s letter, and the impact of the letter on the viability of the project.”
It is the latest obstacle to hit the complex project which has been blighted by delays, seen public investment almost double, and costs soar from €53m to just under €80m in four years.
It is more than four years since the initial €20m in State funding was awarded to BAM, almost three years since the sod turning, and almost a year since the outline of a new funding deal was agreed in principle.
It emerged in February 2017 that the tendered design would not be commercially viable for Live Nation, that a larger, more flexible and adaptable venue would be required, and that as a result, more public investment would be needed.
The revelation triggered a long and tortuous process which culminated last month in the Department of Arts finally sanctioning the extra funding.
But the talks on the funding arrangements have yet to be agreed, more legal advice is being sought and planning has yet to be secured.
FF Cllr Ken O’Flynn, who this time last year branded the project a ‘white elephant’, accused the Tánaiste of “hoodwinking” the public on the sanctioning of the extra funding.
“The longer this goes on, the more it looks like it’s a non-runner for the city. It’s time for this to go back out for public tender, to find a more suitable site,” he said.
BAM did not respond to several requests for comments.
: Beamish & Crawford brewery on South Main St closes with the loss of 120 jobs.
Brewery site owners Heineken announce an international competition to select a development partner to regenerate the site. BAM wins with its €150m Brewery Quarter plan to include offices, student apartments, and a 6,000-seat concert, events and conference.
Planning granted for Brewery Quarter. Work is due to start on the event centre first.
: Cork City Council invites the private sector to pitch for an initial €12m in public funding to secure the development of an events centre in the city.
: Following a protracted tendering process, and last minute talks to increase the public funding to €20m, BAM wins the tender.
BAM acquires the site in full from Heineken, which now withdraws from the joint venture. There are no signs of construction starting on the event centre.
: Just weeks before the general election, Taoiseach Enda Kenny turns the sod on the project. The public is told demolition will start within weeks, and the venue could be open by 2018.
: Still no sign of construction work. City councillors demand a briefing from BAM but are told it will be October before it can take place.
: It emerges that detailed internal designs on the venue are months from completion and that it won’t open by 2018, as predicted.
: Demolition work and minor archaeological investigations start on site.
: BAM restates its commitment to delivering an events centre for Cork, and insists the project is still on track.
: The internal design is complete. But the then Housing Minister Simon Coveney concedes that €10m more in state funding will be required.
: BAM boss, Theo Cullinane, tells city councillors at a private briefing that a larger venue is needed, that project costs have soared, and that another €18m is needed - €12m plus €6m for contingency costs.
: Cork City Council applies to the Department of Culture for an extra €10m for the project. It is subjected to rigorous legal scrutiny.
: BAM and now Tanaiste Simon Coveney reveal the outline of a funding deal they say has been agreed in principle. BAM says if deal is agreed, building could start in Q3.
: BAM boss Theo Cullinane concedes that timelines outline in February will not be met. He insists the project will be delivered.
: BAM lodges planning application for the enlarged venue.
: Planners request further information, citing concerns about the design of the building. Tanaiste confirms that legal advice from Attorney General on the extra funding request is still not ready.
: Government includes South Main St area in urban regeneration funding programme to provide public realm upgrades in support of the development of the event centre.
: Tanaiste confirms that legal advice clears an increase in state investment in the project from €20m to €30m - comprised of €21m grant aid and a €9m repayable loan.
: Tanaiste confirms that talks on the schedule of payments for the €30m, including the repayment mechanism for the €9m loan element, are underway.