Octagon Theatre project on hold
The project to refurbish and extend the Octagon Theatre in Yeovil is to be put in hold. The Theatre closed in May but since then no actual renovation work has taken place.
Instead Somerset Council have had contractors carry out “detailed and intrusive survey work.”
This was required to prepare a more detailed contractor’s specification for the next phase of works. Which could of course mean new costs will be identified as a result.
However the real problem with the project has been South Somerset District Council’s obsession with short term d borrowing. The project finances relied heavily on borrowing over £16m at an assumed interest rate in the order of 2-3%.
With the rise in interest rates in recent months this model is unlikely to be economically viable. The interest repayable was to be offset by ticket sales revenue.
Without significant hikes in ticket prices, that model is unsustainable at current interest rates.
Officers are apparently speaking to funding partners to update them on progress. Shorthand for if they can forward larger grants.
The Department for Culture, Media and Sport (DCMS) had announced a grant of £10m towards the development.