Paradise Regained: £51M Agreed To Bail Out The City Centre Project
The second phase of the £1B Paradise office development in Birmingham will get the £51M of extra public sector funding it needs.
The Greater Birmingham and Solihull Local Enterprise Partnership has provisionally approved the necessary funding after holding an extraordinary board meeting, Birmingham Live reports.
In November 2018 an official report by Birmingham City Council leader Ian Ward to the council's audit committee revealed the real extent of concerns about the 1.8M SF scheme, which first surfaced in September.
Now the funding gap has been plugged.
The funding gap was blamed on the collapse of contractor Carillion, the effects of devaluation, and cost inflation helping to drive up costs. As a result, both the Phase 1 and Phase 2 funding allocations were spent in Phase 1, causing an overspend of £29.1M.
KPMG have been working with the council to develop a business case. New overage terms have been offered by the developers.
The council and LEP originally agreed to provide up to £87.8M, split between three phases. Funding was to pay for demolition and infrastructure.
The second phase is due to include the 280K SF One Centenary Way, Three Chamberlain Square and a new 4-star hotel.
The Paradise development partnership comprises Hermes and the Canadian Pension Plan Investment Board and their development manager Argent.