Offaly Arts Center facing €800,000 budget overrun

THE Arts Center being completed in Tullamore is facing an €800,000 budget overrun with the final bill projected to top €6m.

A theater and exhibition spaces are being provided at the building on High Street in one of the former Kilroy’s stores.

The long running project, originally mooted for a site close to the canal bank at Kilbride Plaza before that plan was abandoned and the High Street building was purchased, will place “significant pressure” on Offaly County Council, an auditor has said.

In a report being considered by councilors this afternoon (Monday, October 17), the Local Government Audit Service says €4.9m has been spent on the Esker Arts Center to date, including €1.25m in 2021.

The building was bought in 2016 by the council and work started in March 2020 but was delayed due to the Covid-19 pandemic.

“The original projected cost of €5.2m is now expected to be in excess of €6m,” the auditor said.

State funding of €2.2m is being provided, €2m from the Department of Tourism, Culture and Arts and €200,000 from an urban development fund.

In May 2019 the council agreed to borrow €2.5m over 20 years for the center but that loan has not yet been drawn down.

Tullamore Community Arts Center Limited (TCAC), formed to fund the centre, committed to providing €500,000 and the project received €50,000 of that amount last year.

The auditor said: “It is unclear at this point how shortfalls in the capital costs are to be funded.”

“Repayments on the loan plus annual contributions towards the running of the Center are to be provided in the Council’s annual budget going forward,” the auditor added.

“I have been advised that the fundraising of the balance of the monies mentioned above has commenced.

“I have highlighted in my previous report that this funding model and the future running costs, together with the excess over the initial projected costs on the build, will place significant pressure on the finances of the Council. This together with the current difficult financial climate will have an impact on the annual budget and the plan for the elimination of the deficit on the revenue account.”

Responding to the auditor’s report, council chief executive Anna Marie Delaney wrote that engagement is ongoing “with the relevant department in relation to costs and also with TCAC in relation to fundraising”.

Building work was expected to be completed at the end of September with a view to having a “soft opening” before Christmas.

“Discussions in relation to the final costs will be finalized in Q4 along with discussions with the Department in relation to additional funding,” the chief executive wrote.

A new company has been formed to manage the center.

In a report on TCAC, which is a local authority company, the auditor said its principal activity was “the promotion of the construction of an Arts Center in Tullamore”.

“The primary role of this company has now pivoted to fundraising for the Esker Arts Centre… The company is limited by guarantee and does not have a share capital. The company did not generate any income for the year as its operations were temporarily suspended throughout the Covid-19 pandemic.”

TCAC’s unaudited financial statements for the year ended June 30 2021 recorded a net loss for the year of €2,000 but its net asset position at that date was €77,000.

In response, the council chief executive said TCAC continues with its fundraising and has told the local authority is planning to transfer further monies to the council “by end 2022.”