Issue - meetings
Storey Creative Industries Centre
Meeting: 02/09/2008 - Cabinet (Item 57)
57 Storey Creative Industries Centre Revenue Implications 
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(Cabinet Member with Special Responsibility Councillor Mace)
Report of Corporate Director (Regeneration).
Additional documents:
- Appendix 1 , View reasons restricted (57/2)
- Appendix 2 , View reasons restricted (57/3)
Minutes:
(Cabinet Member with Special Responsibility Councillor Mace)
(Councillor Bryning declared a personal interest in the following item in view of his appointment by the City Council Cabinet as a member of the Storey Board)
The Corporate Director (Regeneration) submitted a report providing an update on the Storey Creative Industries Centre project and to review the level of revenue support required to assist with the initial short-term operation of the new centre.
The options, options analysis, including risk assessment, were set out in the report as follows:
When taken together the total potential revenue implications of the three issues outlined are as follows:
|
Year |
Forecast short – term deficit on SCIC business plan
|
Additional ‘ring fenced’ Support for Arts Organisations |
TIC Rent |
Total |
|
2008-09 (Part Year) |
£35,600 |
£5,000 |
£600 |
£41,200 |
|
2009-10 |
£52,200 |
£17,500 |
£2,300 |
£72,000 |
|
2010-11 |
£19,200 |
£9,100 |
£2,600 |
£30,900 |
|
|
£107,000 |
£31,600 |
£5,500 |
£144,100 |
The full options and implications of providing SCIC support at various levels are as follows, but Members should note that the TIC rental cost issue is not considered separately due to its low relative importance when compared to the other two main issues.
|
Option |
Advantages |
Disadvantages |
Risks /Mitigation |
|
Option 1 |
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|
Abandon project – complete capital works then sell building. |
No need for Cabinet decision on the potential for future support to SCIC |
A requirement for clawback of funding by ACE, NWDA and ERDF, amounting to £3.5 million.
Uncertainty of position and costs of TIC in a private building under a commercial owner/investor. Risk to capital receipt from existing premises.
Uncertainty of position of arts organisations in returning to the building under a commercial owner/investor.
Reputational cost of abandoning the project. Adverse effect on regional /national funders’ views on the Council’s ability to deliver complex projects.
No potential for added value development of Creative Industries cluster and contribution to a national and regional economic development agenda.
Uncertainty of position during building marketing period.
Effect on regional /national funders’ views on the Council’s ability to deliver complex projects.
|
Clawback of all grant associated with the project (£3.5m) for non delivery. This would need to be funded initially from Unsupported Borrowing (average of £266,900 pa over the first 3 years, with reducing annual sums over the lifetime of the building).
Clawback could be mitigated by building sale. But, outside of a formal valuation, there is no indication of what a sale of the building (under covenant and with no commercial sitting tenants), could achieve. It is unlikely that receipts from sale would match the level of clawback. Council may still be required to return funds.
Adverse effect on regional /national funders’ views on the Council’s ability to deliver on wider ‘Vision’ agenda which could involve relationship development with third party organisations and similar risk/reward considerations.
Risk to current bid for additional resources to complete ‘mothballed’ areas of the scheme. |
|
Option |
Advantages |
Disadvantages |
Risks /Mitigation |
|
Option 2 |
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Complete capital scheme offering no revenue support to SCIC (neither current agreed nor any additional ‘safety net’) or additional ‘ring fenced’ support for ... view the full minutes text for item 57 |
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