Councillors will meet in private next week to discuss an approach from Shetland Arts for more SIC money to help bridge a seven-figure funding gap for the building of Mareel.
After an 18-month delay during the construction phase, the £12 million cinema and music venue is understood to have gone over budget by around 10 per cent.
As previously reported by The Shetland Times, the project’s other funders – including HIE, Creative Scotland and the European Regional Development Fund – have all pledged extra cash totalling nearly £600,000.
But that is conditional on the SIC – which faces major spending troubles – being willing to stump up its 50 per cent share. The council contributed over £6 million to the original budget for the North Ness venue, which finally opened its doors in August this year.
Meanwhile legal wrangling between Shetland Arts and its contractor DITT is expected to continue beyond this winter. It is unclear exactly how much the arts body will need to meet its outstanding bills for Mareel’s construction.
DITT director Peter Tait said the firm was this week expecting to receive the remaining proportion of a £200,000 sum Shetland Arts was ordered to hand over earlier this summer. DITT believes it is still owed hundreds of thousands of pounds on top of that.
On 16th November, the contract administrator delivered a ruling on what proportion of the costs should be shouldered by each party. Mr Tait said that, as expected, neither DITT nor Shetland Arts was satisfied and it is likely both will be challenging the findings.
The troubled construction phase saw delays owing to various factors including bad weather and subcontractors going bust.
In its first three months, Mareel sold almost 28,000 cinema tickets – 70 per cent of the first year target.
Councillors will discuss the funding request behind closed doors at next Wednesday’s Full Council meeting. It comes less than a fortnight ahead of deliberations on making £3 million of spending cuts to the local authority’s annual inter-island ferries budget.
There have been suggestions that, rather than agreeing to hand over a one-off grant in excess of £500,000, the council may look at offering Shetland Arts a loan to cover its shortfall. Development director Neil Grant said he was unable to comment in advance of the crunch 5th December meeting.
The SIC’s political leader Gary Robinson, an outspoken opponent of the project, confirmed an approach from Shetland Arts had been received. But he did not want to predict how councillors might respond.
“There has been a formal approach to the council to contribute to the additional build costs of Mareel,” he said. “I understand that the other partners have indicated that they will contribute, and we will bring a report to the council in December for decision.
“I think we have to look at this in the context of all the council’s priorities. I can’t say at this stage how members will take to it, but clearly we haven’t budgeted for this so it will be a difficult decision, and the likelihood would be that any contribution would have to come directly out of reserves.”
On Friday, the council’s executive committee heard that despite already having banked £10 million of its targeted £15.6 million savings for 2012/13, the council will still have to draw £29 million from its oil reserves this year.