Spiralling costs mean alternative ways of funding the Castle Gateway project in York will need to be sought, say council chiefs.
The Castle Gateway project includes the creation of a new multifunctional public realm and events space, new city centre homes and a focus on reducing traffic inside the inner ring road.
A £15 million plan to turn St George’s Field car park into a multi-storey car park had been planned, but economy and transport executive Cllr Pete Kilbane ruled this out.
“We do not intend to build a multi-storey car park in St George’s Field,” he said at a corporate services, climate change and scrutiny management committee meeting on September 25.
It is now being suggested that this cash could help fund other aspects of the Castle Gateway project.
Neil Ferris, corporate director of place, said: “Cllr Kilbane has given us strong indication that the authority won’t be delivering a £15 million multi-storey car park.
“Clearly that decision is for the executive to make but I’ll take that as a given.”
READ MORE: 'We have no appetite for building multi storey car parks'
Mr Ferris said that money generated from Castle Mills, a residential development planned as part of the project, was originally going to help fund the multi-storey car park, but if that is not going ahead then “there are opportunities to reconfigure” where money goes.
A sum of £4.4 million has been spent on the project since 2017 and a council report shows costs have only increased since works were paused during the Covid-19 pandemic.
“It’s no secret, the financial position we’re in,” Cllr Katie Lomas, the finance executive, said.
“While we’re going to pursue any options for alternative funding sources for any and all of the ambitions we have for the city, there is a reality to it.”
She added that it is important to “deliver for the city in a managed and controlled way so we’re not overextending ourselves and we don’t end up in the position so many other councils have ended up in".
Scheme costs across all projects have increased and the sales market for apartments has not matched cost inflation, which has reduced the likely revenue generation from Castle Mills that was intended to fund the replacement parking solution.
Interest rates have also increased the impact on the council’s borrowing costs and changes to building regulations may mean new planning applications will need to be submitted, therefore increasing the risk to the council.
“There is no magic money tree,” Cllr Lomas said.
“It would be nice if there was.”
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