Plans to redevelop Parnell Square as a cultural quarter for Dublin are in disarray due to the inability to secure financial backing for the scheme.
The cost of the project has soared from €60 million, to more than €130 million, Dublin City Council chief executive Owen Keegan has confirmed.
In what was a “most disappointing and unwelcome development” the foundation set up to raise philanthropic funding could not guarantee the money, he said.
Less than three months ago Dublin City Council secured planning permission for the project which would see a new city library, 200-seat conference centre, a music centre, education facilities and a café and exhibition space across the north end of the square.
The scheme also included the creation of a new public plaza, and the restoration of some of the city’s finest Georgian houses, including the former Coláiste Mhuire, Christian Brothers school, in what was to be a catalyst for the regeneration of the north inner city.
In 2013 the Parnell Square Foundation, a partnership between the council and US real estate investment company Kennedy Wilson was set up to develop the project. Kennedy Wilson agreed to lead the effort to raise private donations which would "fully fund the project" Mr Keegan said. The cultural quarter was at the time expected to cost €60 million and be completed by 2017.
Scale of funding
However in 2016 it emerged that the expected costs had risen to €100 million. The council subsequently agreed to contribute 45 per cent of the cost, using a loan from the European Investment Bank, with the remainder to be funded through donations. The target opening date was pushed out to 2020.
When permission was granted for the project by An Bord Pleanála in May the cost had risen to €110 million, with a new completion date of 2023.
In a letter to city councillors, Mr Keegan said the cost had now risen to “circa €131 million” largely due to construction inflation.
“I have now been advised, following work undertaken by a consultant engaged by Kennedy Wilson on behalf of the Foundation, that the required private fundraising could take over three years and that there is no guarantee it will be successful” Mr Keegan said.
The consultant highlighted scale of funding required for the project relative to the sums raised previously for cultural projects in Ireland, from national and international donors, and the “fact that libraries have a lower affinity score with private donors than the arts generally” Mr Keegan said.
The council “did not accept that the obstacles were necessarily insurmountable” he said.
“I believe the Parnell Square Cultural Quarter development is vital to the cultural life of the city and to the regeneration of the north inner city. Every effort should be made to ensure it proceeds.”
However, he had determined the best course of action was for the council to go ahead with building the new library within its own funds, at a cost of approximately €80 million, with the work to the Georgian houses, the plaza, and the other cultural elements to be deferred to a later date.
A spokesman for Kennedy Wilson said it had already invested almost €5 million of its own funds in the project and “remain committed” to supporting it.
It welcomed the council’s decision to press ahead with the library element, and said the remaining projects should go ahead in “multiple smaller phases” he said. “Kennedy Wilson remains committed to ensuring the whole cultural quarter becomes a reality.”