The multi-million cost of refurbishing Fairfield Halls is set to fall to Croydon taxpayers as the authority looks to wind down council-owned developer Brick by Brick.
The council will not recover all of a £59 million loan given to the developer for the refurbishment of Fairfield Halls and adjoining housing development.
It cost at least £42 million to refurbish Fairfield Halls. The idea was that the neighbouring College Green development of more than 400 flats would cover these costs.
The council is facing a financial crisis and has leant more than £200 million to controversial developer Brick by Brick.
It is now looking to continue building works that are underway and set to be completed by October 2021 and reviewing other developments that were in the pipeline.
Deputy leader of the opposition Jason Cummings said: “I think this could have been avoided. The whole situation with Fairfield Halls is indicative of what has gone wrong in Croydon.
“For a project that was supposed to cost £30 million we don’t know what the money has been spent on.
“It has been handled so badly, Brick by Brick have no experience of this type of thing, refurbishment and modernisation of an arts and entertainment venue.
“The worst thing is that is going to be the tax payers of Croydon having to pay.”
A scrutiny committee meeting last night (Tuesday, February 9) discussed the proposed winding up of the developer wholly owned by Croydon Council.
PriceWaterhouseCooper (PwC) carried out an independent review of the council’s with its companies including Brick by Brick.
This was managed by Chris Buss, former Director of Finance and Deputy Chief Executive at Wandsworth Council.
At the meeting he said that the council has leant Brick by Brick £59 million for the work on Fairfield Halls and planning costs of the College Green site.
Explaining what should have happened, Mr Buss said: “The intention was that there would be no cost to the council, Brick by Brick would refurbish the halls and build out the land next to it and the council would pay nothing and get its loan back through the proceeds of the flats being built next door.”
The site has not yet been handed over to the company and Mr Buss recommended that the council tries to sell on the site and adjacent car park – the planning permission is already in place.
It was not revealed how much money the council would lose from the proposal but Mr Buss made it clear the full £59 million would not be recouped.
The same report will go to the council’s cabinet next week.
A separate value for money investigation into the Fairfield Halls agreement with Brick by Brick is currently being undertaken by external auditors Grant Thornton.