Manchester to pump yet more money into Factory as costs climb
The city council has confirmed it will need to borrow at least another £20m to finish the 143,000 sq ft arts venue, with a warning the final budget for the flagship cultural project could exceed £230m.
Rising inflation and ongoing design fees mean the cost of Factory International – recently renamed Avivia Studios – will be more than double the 2017 projection of £110m, made after plans for the project were approved.
The cost of the scheme will rise from £210m to £219.7m this week when Manchester City Council signs off £8.7m of borrowing for the building and an additional £1.1m to complete public realm works to create nearby River Square.
There will then be another cost rise in September, which will be “more than the [£9.8m] amount being requested this month”, according to the city council.
Manchester City Council cites the “volatile economic climate and the complexity and uniqueness of the building” among the reasons for the soaring costs.
Other reasons include high material and labour prices and acceleration costs, relating to 24/7 working to ensure the building was sufficiently complete in time for Manchester International Festival 2023.
“Nothing great was ever achieved without difficulty,” said deputy council leader Cllr Luthfur Rahman, reacting to the latest cost increase.
“For all the challenges it has faced – and who could have predicted that these would include being built during a global pandemic and against such a difficult economic backdrop – this game-changing venue is definitely worth the investment and worth the wait.”
The city council said the cost increase would be largely covered by the income from the recent naming rights deal with Aviva, rumoured to be between £25m and £35m.
Over the existing 30-year lease with Factory International, the authority expects to accrue £80m across various naming rights and sponsorship deals, which could cover the cost of its investment in the scheme.
Of the £210m spent so far, the city council said it has contributed £64.6m. This figure sees a correction from earlier reports that put the authority’s contribution at £80.6m.
£106m of the total has come from various national pots: £78.1m Treasury funding, £7m Arts Lottery, and £21m via the Kickstart Capital Cultural Recovery Fund administered by Arts Council England.
The remaining £39.3m came from external fundraising.
Rahman added: “The unprecedented level of national investment in Aviva Studios, both from the government and Arts Council England and commercial backers such as Aviva, is a huge statement of confidence in this remarkable venue and in Manchester.
“Over time, naming rights and other partnership arrangements will enable the council to recoup the funds we have invested in this project in full as Aviva Studios makes an enormous wider contribution to the life of the city, the region and the UK as a whole.”
Designed by design studio Office for Metropolitan Architecture, founded by Dutch architect Rem Koolhaas, The Factory is being built by contractor Laing O’Rourke.
The budget for Factory International was set at £110m when plans for the scheme were approved in 2017. This rose to £130m the following year and to £186m in 2020 due to the impact of Covid-19.
Following the budget increase in 2020, the city council’s former leader Sir Richard Leese said the authority could not afford to contribute any more to the project.
An additional £25m was pumped into the project last October, taking the budget to £210m.
The city council has consistently defended the project and its failure to deliver it on time and on budget, claiming the economic and cultural benefits of the venue will far outweigh the cost of construction.
It is estimated that Factory International could generate up to £1.1bn for Manchester’s economy over 10 years and attract up to 850,000 visitors a year.
“What is being created here in Manchester is a venue which is bold, visionary and spectacular,” Rahman said.
“It’s a nationally and internationally important centre for art and creativity at the heart of our city which will also create new opportunities for our people, boost our creative and visitor economy and strengthen Manchester’s global reputation.”
But the council say all development is good development and the public should accept this
By Anonymous
Building costs escalating all over the country.
Could this be a sign of the times for future civic projects?
By Just saying
This is fast turning in to a white elephant!
By mcleod
That sort of money could have gone towards another Metrolink line, rather than this. If it was some stunning masterpiece, but this looks like a waste disposal system, outside Workington.
By Elephant
I drove by this the other day, I cannot believe how awful it looks in the flesh (the CGIs looked so-so). Another white elephant, where has all this money come from??
By Heritage Action
This is a catastrophic mess. There needs to be a full investigation into this waste of public sector money particularly in light of budgetary constraints the LA is facing. Leadership, both past and present need to be held to account, this is wholly unacceptable.
By Notinmyname
What a joke. But no money for cleaning streets or maintenance etc. I wouldnt mind if this was a world class design…. its shocking!
By Anonymous
The project started before high inflation so allowing for that it would be interesting to learn by how much it has run over.
Ultimately money that isn’t spent is just lost in cut backs with nothing to show for it.
Just be glad of the development which will be enjoyed for years to come that isn’t just apartments and offices
By Tomo
Ah yes, the overage now reaches the entirely predictable. Casa Musica, Porto came in at 2x budget & more than two years late. Same architect firm, same project architect, similar typology and programme. And Porto didn’t have pandemic and cost inflation as excuses. The current situation, of budget and schedule is entirely predictable, given OMA’s record. The client is culpable.
By Phil Griffin
This is a bill that no doubt Manchester residents will have to pick up!
By Manc
Saw this close for the first time on Saturday and what an absolutely ugly building which does nothing for architecture in the city. Whilst additional performance space is welcomed this is a complete white elephant of a vanity project.
By Graham Bennett
Thank goodness for naming rights then! The sooner they finish it the better.
By Anonymous
Reading up they’re expecting 600,000 a year visitors to this, 1 Million during MIF Festival time… that would equate to the same as the AO Arena per year but without a fraction of the popular programming an arena has. The amount of money sunk into this isn’t going to give the returns they’re claiming, if MIF can’t sell out in 2023 after running for so long I don’t see how it will ever increase with the current set up new building or not.
By CityCentre
Cost on all projects have gone up, compared to HS2 and time Manchester has done quite well, but some people would not spend a penny on the Art’s
By Anonymous
I like the idea of the venue, but skeptical it’ll provide a good economical return on investment. I’m so disappointed by how it looks in person, its no Sydney Opera House that’s for sure, yet another case of rendered images being nothing like the outcome. Should of known really that a grey concrete building would look awful.
By MC
Why is Manchester so hopeless at building beautiful, iconic buildings with a quarter of a billion pounds of taxpayers money, wasted on this eyesore, plus that other monstrosity on Alan Turing Way. The council must be full of Philistines, if anyone thought this was attractive when they chose it. I feel quite angry that this is the outcome after all the hype. It is scandalous. With that sort of money we should have something breathtaking, instead we have this bog standard silo, more suited to some dreary town on the M4 between London and Bristol, than one of Europe’s great creative cities. The Shakespeare theatre in Prescot, a suburb of Liverpool, knocks this into a cocked hat.
By Elephant
A good public realm space is vital to make this a place where visitors are attracted to. The arrival of Home made First St.. walking around there yesterday I did see the potential of a busy neighbourhood. Or it could end up where nobody goes because it feels sterile and soulless which will be sad
By Christopher
All that money for a building that looks so ugly. What a waste! This will win all the wrong architectural awards.
By Stephen
Hyper inflation in the building industry is leading to overspending on both minor and minor construction projects, just look at the spiralling costs of HS2. This is also not just a UK problem which is why the state of Victoria in Australia pulled out of staging the Commonwealth games and other projects like the refurbishment of the Houses of Parliament are more or less on hold, why would this art project in Manchester be any different? We now just have to suck it and see and hope that over the coming decades that it is a great success.
By Monty
Leadership of the Council from SRL & SHB’s time need to answer for this. Inflated egos thinking they can do anything!
By M
MCC need to start addressing their design issues fast
By Anonymous
I don’t think the council can admit politically (after a lot of negative comments on design when it was first proposed)….but they got this very wrong. It’s not that hard to design a beautiful looking building but it’s very hard to design a beautiful cutting-edge building. And costs are harder to control when it’s cutting edge. In the private sector if costs had overrun by this level then it would have spelt the end of the company…and there would have been some accountability…when it comes to the public purse then there seems to be little hesitation in fleecing the taxpayers. I remember a long time ago what one contractor said to me about public and government works…”get awarded the contract anyway you can…you make little profit on the initial bid…but you make a fortune on the uplifts afterward”. Manchester has done a lot of things well but this one is a white elephant and the maintenance over the next few decades is going to be a huge burden to council tax payers.
By Anon
What a total waste of tax payers money in these difficult times.
By Paul griffiths
I’ve been coming to Manchester from Hull for MIF since it started and question why the money has been spent on a permanent building, when one of the festival’s greatest strengths was how it brought disused spaces back into use. I saw Alison Goldfrapp in the new building on Friday and also saw Goldfrapp 10 years ago at MIF when the Albert Hall was resurrected. That brought the hall back into use as a thriving venue, and while Alison Goldfrapp gave a great performance on Friday, the venue itself felt like it could’ve been any other concert hall. Walking around the site trying to get my bearings was very disorientating and felt quite characterless. Listen carefully and you might hear the ghost of Tony Wilson asking “Is it an artform?”….
By Claire M
Was down there on Saturday, it’s underwhelming to say the least, and it does remind me of a council incinerator rather than iconic architecture. Tax payers will foot the bill as always. The tragedy is Manchester isn’t short of performance space for MIF events.
By Marvin
Manchester is very well catered for in terms of leisure. You could have built a metrolink extension for that and improved our economic geography
By Cheggers
Amazing amount of public money,£106m, that has been secured to cover the costs of a building that was meant to cost £110m. Lots of other arts projects in the city, and across the uk, will suffer because of this, thank you Mr Osborne.
By Anonymous
Disgraceful. The worse thing is, it was predictable. Much like hs2, spiralling costs, heads in the sand by the council.
By Darren
The original cost estimate was way too low, even a standard new-built library building easily costs £100 million, so such a bespoke building is bound to cost way more.
By Andreas Schulze Baing
Typical of the current period of design in Manchester. Where’s the imagination where’s the beauty. Soulless cladded box. Would not be out of place in a retail park. £230M and now the lame justification begins. This is about as incompetence at all levels. It will never make the return on the investment.
By Council tax payer
£17,300/m2 wow………………put into context a high rise residential is £2,700, Uni Lab Build £5,000, School £3,200…..
By Pablo
This is an appalling project from start to finish. It’s not as if it is a place of beauty and a genuine tourist attraction for the hundreds of millions of pounds it has cost and they still want more ? You are joking ! The city council are a disgrace in letting this project to be built in the fist place – because it is no better looking than a warehouse on an industrial estate. It’s a shocking carbuncle.
By Rodders
All of the anti Manchester rhetoric on this site is tiresome. If it’s so poor in terms of transport, green space architecture and so on, why is it so popular? Why do so many people move here to live and work. Why do so many people visit and socialise on the city centre? The truth is real Mancunians truly love their city
By Proper manc
Like the visitor from Hull rightly said, the beauty of the MIF was using redundant space, for performances. They would have been better off, doing up the magnificent Theatre Royal, for a fraction of this money pit. This is hidden by a railway bridge covered in graffiti.Most regional cities would have killed for George Osborne’s handout for this. It is now called after an insurance company, which is fitting, as it looks like a call centre.
By Elephant
Having been, I think the venue is excellent and the cost alarming. To what extent the fault for that divides among the architect, the pandemic and the recent surge in inflation I don’t know. But I don’t think anyone will be calling it a white elephant a few years from now.
By Andy