Coventry seeks to revive its old IKEA into a cultural hub, managing costs amid contractor collapse and budget issues.
The project’s costs mainly caused a £1 million budget overspend, with delays starting in September. These delays occurred after the building’s contractor went out of business.
ISG was hired for £44 million, but work stopped quickly. The council found a new firm after reviewing bids and shared this update with a news source.
Only two companies wanted the contract, and the agreement still needs finalization. The IKEA project and Godiva festival caused budget issues. A recent report revealed a £1 million shortfall.
Pre-construction and holding costs piled up for the old store. The total costs reach £865k, the council stated, with business rates owed to the council alone making up £480k.
The Godiva festival accounted for just £200k of the overspend. The contractor’s collapse increased the IKEA building’s costs, and the council again controls the seven-story building.
The council must cover holding costs while the building is empty to ensure it stays compliant and secure. The building also owes business rates.
ISG’s collapse returned the building’s ownership to Coventry City Council. The reported costs are the holding costs for this period.