State to plough €50m into stalled Cork event centre project as new funding deal announced

The state is poised to more than double its original investment in the stalled Cork event centre to €50m under the terms of a new funding deal revealed today.

State to plough €50m into stalled Cork event centre project as new funding deal announced

The state is poised to more than double its original investment in the stalled Cork event centre to €50m under the terms of a new funding deal revealed today.

The “non-repayable grant” will be combined with €35m from the developers, BAM, and venue operators, Live Nation, fuelling hopes that construction of the near €90m 6,000-capacity venue could start within months, pending no legal challenge and a green light from An Bórd Pleanála.

The details have emerged as Cork City Council publishes a special notice in the Official Journal of the European Union today to inform ‘the market’ of proposed changes to the project’s original funding agreement, and of its intention to conclude a contract with BAM.

It is a major step forward in the saga which saw a tender for €20m of state-aid awarded to BAM in 2014 and the sod turned in February 2016.

But not a single brick has been laid as the project stalled over a redesign, soaring costs, planning delays and funding complexities.

The sod turning in February 2016.

The sod turning in February 2016.

Council chief executive, Ann Doherty, said she is now delighted to be able to publish the so-called Voluntary Ex-Ante Transparency (VEAT) notice - a process frequently used to ascertain and mitigate the risk of a procurement challenge.

“We have been working closely with our various partners on this for months now. There was an intense round of meetings in the weeks before Christmas and everything is now in place to proceed with this process,” she said.

The allocation of such significant funding is a recognition by the government of the strategic importance to Cork and the region of this critical piece of infrastructure.

The VEAT notice reveals how €50m in funding will now be made available by the government and council as a non-repayable grant, that €35m will be made available by a special purpose vehicle to be established by BAM with Live Nation, and that once the venue is built, the site and event centre will transfer to the operator.

Its publication triggers a month-long period during which the new funding agreement can be challenged in the courts.

O’Callaghan Properties (OCP), the unsuccessful bidder for the original state-aid, has previously indicated that it no longer has any interest in the project.

In August 2014, OCP and BAM were the only bidders for the initial €14m in state-aid to deliver an events centre for Cork.

In December 2014, BAM was named the preferred bidder for an increased €20m state-aid package for its proposed venue on part of the former Beamish and Crawford site on South Main St.

Live Nation subsequently commissioned detailed internal design work which indicated that for the venue to be viable, it needed to be 20% bigger.

That led to structural and specification changes which included alterations to the stage orientation and layout, which in turn led to soaring costs and requests for more state funding, and complex issues over whether it would be classed as a grant or a loan.

Efforts have continued since at the highest levels of government to resolve the funding issues as the enlarged venue was granted planning and the decision then appealed to An Bórd Pleanála.

The site last April.

The site last April.

Last September, the Tanaiste Simon Coveney and Taoiseach Leo Varadkar confirmed the government had agreed to allocate the “necessary funding within spending ceilings” to allow the council enter final contract negotiations with BAM but it is only now that the details can be disclosed.

The VEAT notice says the council now plans to “conclude a funding agreement” with a special purpose company to be established by BAM with Live Nation to deliver the enlarged venue.

The council says it considers that “competition is absent for technical reasons” linked to a bidder's ability to deliver both a site and the required investment, that a 20% increase in venue size is essential, and that BAM is the only economic operator that can deliver the project to the specified requirements.

It warns that any change to the process now would significantly delay the delivery and cost of this “significant piece of infrastructure linked to the development of Cork and inevitably result in duplication of cost and effort”.

The new funding deal includes changes the council says it considers to be “reasonable, proportionate and justified”.

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