The redevelopment of Hertford Theatre needs an additional £4m of funding if the full project is to be delivered.
A report published today (22nd February) says that the increased costs of building materials due to Brexit and Covid mean that the project can no longer be delivered on budget. The report recommends an additional £4m of funding paid for out of reserves and additional borrowing.
The redeveloped of the theatre was expected to increase income by over £500,000 a year. The council has until now been subsidising operation of the theatre.
There have been significant inflationary pressures from the combined impact of Covid and Brexit and the resulting supply chain disruption across the globe. The additional funding is requested from a combination of capital contingency funds and funding from Earmarked Reserves and the request is supported by a robust business case.
The industry has experienced significant increases in packages such as the price of materials Cross Laminated Timber (CLT) and Steel have increased by 40%, Mechanical & Electrical (M&E) packages including labour cost have increased by 15-20%. Overall this adds a minimum of 15% to the total contract price as a result of Covid / Brexit related inflationary pressure. This is in line with the Office for National Statistics Construction Output Prices Index
:: East Herts Council Report
The £20m project has suffered delays after the council was unable to appoint a contractor following the closure of the theatre in June last year.
Other options laid out in the report include scaling back the project and reopening the theatre in it's former configuration.
Reopening the theate without redevelopment has been costed at £5m whilst the option of a scaled back redevelopment has not been costed.
Then report wil be presented for approval at a meeting of the Full Council on Tuesday 1st March.
Eric Buckmaster, Executive Member for Wellbeing at East Herts Council, said: "We're asking councillor colleagues to share our commitment to investing in this project: to revitalise Hertford town centre, to deliver a new hub for our communities and to enrich the lives of residents for generations to come.
"The Theatre sits in the heart of Hertford, but its doors will be open for everyone in our district to enjoy. This investment is part of our five-year capital spending programme that also includes Old River Lane which will deliver a new arts centre, leisure facilities, shops and homes in Bishop's Stortford.
"Capital projects like this are not just undertaken to deliver improved facilities, they generate income for the council that enables us to protect the services we supply and keep charges such as council tax as low as we possibly can. After this investment, the new Hertford Theatre will no longer require a subsidy from the council and will generate income for the future. "
The redevelopment will see first release films on offer with the addition of three bespoke cinema screens, a brand new studio auditorium for smaller live acts and performances, and a plaza-style foyer with riverside café-bar. There will also be two hireable community spaces and improved access to all areas of the building.
Improved integration with the surrounding historical area will uncover the castle motte, providing a boardwalk in to the castle grounds.
Updated 23/2/21 to include details about what the redevelopment will deliver
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