No more grovelling to SIC for Mareel

Pete Bevington

13 May, 2008

SHETLAND Islands Council will not have to pay a penny more than the £5.1 million it has already committed to the proposed cinema and music venue Mareel even if costs escalate, Shetland Arts boss Gwilym Gibbons insisted yesterday (Monday).

His comments come as it emerged that building inflation could push the eventual cost of the venue up by £1 million or more, and Shetland Arts has applied to Europe for further funding to meet any shortfall.

The fate of the Mareel hangs in the balance after nine councillors signed a notice of motion to review the SIC’s commitment to the project at the full council tomorrow (Wednesday).

Councillor Allison Duncan, who proposed the motion, said he believed inflation could push the eventual cost up by as much as 20 per cent to more than £11 million.

During a robust exchange at a Shetland Arts seminar for councillors last Thursday, Mr Duncan told Mr Gibbons: “I hope it never takes place because it’s the biggest white elephant I have ever come across. It’s just a matter of time before you come grovelling back to the council or the charitable trust for more money.”

However Mr Gibbons told councillors that Shetland Arts would take full responsibility for raising any extra cash needed for building Mareel and would not be coming back to the SIC for any more. If they could not raise enough, the project will not go ahead.

The only other cash so far committed to the project is £2.12 million from the Scottish Arts Council Lottery Fund.

Senior officials at Highlands and Islands Enterprise will shortly decide on an offer of £965,000. A further £250,000 has been applied for from both the Robertson Trust and the Gannochy Trust. Shetland Development Trust is also considering a substantial investment.

Last month Shetland Arts put in a stage one application to the European Regional Development Fund to meet any gap in funding between what can been raised through other organisations and the most attractive tender that comes in.

However the agency is reluctant to reveal too much about its funding bids to avoid impacting on the tender price. “We don’t want to inflate it by saying we have got twelve or fourteen million. What we have is a budget we are working to of £9.3 million,” Mr Gibbons said.

“Should tenders come in higher and should we need to secure any extra money we know we can’t go back to the council and we have no intention of doing so.

“The pressure on the capital programme has been made blatantly clear to us. All we are doing is asking the council to honour the previous commitment it’s made.”

Some of the potential funders are waiting until the outcome of tomorrow’s meeting before deciding on whether to invest in the Mareel. The ERDF application had to wait until planning permission had been granted last month.

However any further delay will send costs up. The current rate of inflation in the building industry is put by some as high as £3,000 a day on a project this size.

Last October the Mareel design was changed from a steel to a timber structure due to the colossal increase in steel prices, which in turn have led to a doubling in timber costs as other projects follow suit.

“We are making allowances for building inflation, but the best thing we can do is get a tender out there quickly so there’s a fixed price on the table and we know exactly where we are. The quicker we get building the cheaper it’s going to be,” Mr Gibbons said.

The business plan for Mareel has also come in for heavy criticism for the emphasis on alcohol sales, but the organisation has stressed it would not be “running a pub”, but would be concentrating as much on selling tea, coffee and soft drinks.

“At a music event we are working on a spend per head of between £2 and £12 and we don’t think that’s an indication of an alcohol-fuelled venue. We are being quite conservative with our figures, but that’s because we want more of a family atmosphere than a traditional pub,” Mr Gibbons said.

He also rejected arguments that the cinema would lose money, despite claims made by councillor Gussie Angus who last week resigned from the vice chair of Shetland Arts condemning the sale of alcohol and saying the Garrison Theatre only broke even when it was packed for a whole week of Harry Potter movies.

“The cinema is one area of the venue I am absolutely confident will subsidise the rest of the building, because of the level of attendances we are looking at,” he said.

“If you can fill the Garrison Theatre it makes money, but Mareel won’t need to have dedicated staff for the cinema space. You can have just seven people in the cinema and still make money.

“We are not looking for more than Orkney gets and we are way below the national averages for cinema attendance. Again, we have been quite conservative and we have been told this is one point where there’s room for growth.”

The 161 seat cinema has been built to accommodate sell out blockbuster movies. But the business case is built on an average of nine people coming to matinee performances and 73 attending evening shows on the three busiest nights, Thursday, Friday and Saturday.

Mr Gibbons said Shetland Arts were taken completely off guard by the campaign to derail the project. “The council committed funding and we have been getting on with what we have been charged to do, and now this notice of motion threatens to bring it to a halt.

“It’s frustrating that we are having to put our energy into fighting this notice of motion instead of what we need to be doing, which is getting on with arts development in Shetland and making sure the building is ready to start being built in the summer and we have full funding in place.”

The nine councillors who have signed the notice of motion are Allison Duncan, Gary Robinson, Cecil Smith, Betty Fullerton, Robert Henderson, Allan Wishart, Jonathan Wills, Iris Hawkins and Jim Henry.