Additional £20m committed to Factory

Manchester City Council has earmarked a further £20m-plus to fund delivery of The Factory, its Rem Koolhaas-designed banner cultural project.

The council’s resources and governance scrutiny committee, which meets this Thursday, and its executive, which meets on 14 November, will be asked to note progress so far and to recommend to full council, at the end of the month, the approval of an increase in the project’s capital budget.

Demolition and other preparation works are under way to enable main construction works to start in early 2019, with the intention being that the building can play a key role in the 2021 Manchester International Festival – the creation of a permanent main centre for MIF being the project’s key driver.

Manchester’s contribution to the project’s capital budget will, if approved, be increased by £18.97m to £40.57m out of a revised overall project budget of £130.62m. The council said that its larger contribution would be covered by land sales.

The council said that the sheer amount of construction work happening in Greater Manchester was a contributor to rising costs, with construction inflation running at around 3% per year. This accounts for £5.5m of the increase.

With criticism likely for the escalating costs, explanation has been provided for some of those increases – the council said that with the former Granada studios site being out of public hands for more than 50 years with incomplete records of changes in use, it had only been able to make detailed ground investigation surveys following site acquisitions being completed. Subsequently, it has found electrical, gas and fibre optic infrastructure that will have to be worked around, adding a further £500,000 to costs.

Another area not fully factored in thus far has been acoustics – keeping sound in and out in equal measure. The council said that “the technical complexities of achieving this, which had not been designed in detail when the original budget was produced, and associated changes to the construction sequencing have added £4.5m”.

Other costs that have been increased, with less in the way of explanation, include reinforcing the design team, including bringing some extra specialisms in-house – adding a further £750,000. There’s an additional £400,000 for site supervision, £2.7m in increased design team fees and £975,000 for “additional design solutions”. The revised budget allows £5.8m for contingencies.

The council insisted that The Factory, as one of the largest purpose-built cultural buildings in the world, will deliver a £1.1 billion boost to Manchester’s economy over a decade, attracting up to 850,000 visitors a year and creating 1,500 jobs. It is a key part of the St John’s neighbourhood, which is largely being brought forward by Allied London under its Enterprise City brand.

The 145,000 sq ft venue is to be managed by MIF, which will create its artistic programme. A revised planning application was approved in July this year and the various land deals required to secure the site concluded in August.

Manchester’s required contribution is still less than a third of the total, with slightly more than £78m coming from the Treasury and a further £7m in Lottery funding from the Arts Council going for approval in January. Central government is to contribute £9m a year in running costs for the first three operational years at the facility, desiged by Koolhaas’ Office for Metropolitan Architecture. .

The council said the issues are best dealt with now: “Learning from the experience of major cultural construction schemes elsewhere, where significant overspends have been identified midway through construction, the Factory team has carried out a robust review of all elements of the building to ensure that any potential issues are identified and tackled now – at the design stage – rather than further down the line when any changes would be more costly.

“This approach has led to the early identification of increased costs but ensured a higher degree of certainty around the budget and overall programme.”

Sir Richard Leese, leader of Manchester City Council, said: “There is nothing like The Factory anywhere in Europe, let alone the UK and its game-changing impact for Manchester and the North of England cannot be overstated. That’s why it has been able to attract so much central government funding and is such an exciting prospect.

“Compromising on The Factory’s quality and ambition would have undermined its uniqueness, its purpose and the benefits it will bring. It’s a bold and ambitious undertaking and such projects do not come without complex challenges which we have tackled head on now so we can be confident going forwards.”

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