Tuesday, 14 July 2009

Harcourt's Titanic Problem

In the week in which a vote was taken to again defer any decision on Phil Rondel's proposition to stop the Waterfront Development until the economy improves, other forces may well conspire to halt Harcourt Development's ability to come up with a bond. In Ireland, they have troubles of their own.

Back in December 2008, not that long ago, the JEP reported (1):

HARCOURT Developments have released pictures of their other waterfront development. The images show the £100 million Titanic Signature project in Belfast that is to be built by the Irish company which was at the centre of a multi-million pound court battle over the Esplanade Quarter development.... Titanic Quarter is to be created on the site where the ill-fated White Star Line vessel was built. It is due to include a five-storey, boat-shaped Titanic centre, which is scheduled to open in time for the centenary of the boat's sinking in April 2012. The attraction will incorporate a state-of-the-art flying theatre, Titanic-themed banqueting suite, conference facilities, café and family restaurant. Up to 600 jobs are expected to be created during the construction phase. It was announced last week by the Northern Ireland Executive that £40 million of public money was to be invested in the project.

But now the Irish Times reports (2) that there are problems with the project:
Tuesday, July 14, 2009 BELFAST BRIEFING: An ambitious attempt to capitalise on the city's relationship with the Titanic is in deep trouble. ..There has always been an element of plain bad luck associated with the Titanic's doomed maiden voyage. Now, more than 97 years later, it would appear the element of bad luck associated with the Titanic has not run out. Its latest victim, to all appearances, is the £97 million (€113 million) Titanic Signature Project. The project marks one of Belfast's most ambitious attempts yet to capitalise on the city's unique relationship with the Titanic tragedy. It involves the construction over three acres of land in the Titanic Quarter in east Belfast of an "iconic", state-of-the- art building that would stand more than five storeys high. This futuristic building would be home, among other things, to a " Titanic -experience exhibition", and " Titanic -themed banqueting suite". It has been estimated that the initiative could deliver a tourist boost of £30 million to the local economy if it succeeds in attracting in the region of 400,000 visitors a year. The initial plan was to have the Titanic Signature Project up and running by 2012 in order to cash in on the centenary celebrations of the Titanic 's doomed departure from Belfast. But the Titanic Signature Project appears to be languishing under the ship's legendary cloud of bad luck and, in turn, it has also enveloped at least one Dublin-based company operating in the North.

Construction of the project was expected to begin last January. Almost seven months on, there is little evidence of any progress. This is primarily because the key funders behind the project have been caught up in a legal wrangle that is shrouded in as much mystery as the Titanic itself. The Titanic Signature Project will be part-funded by the North's Executive, which is contributing, £43.5 million towards the cost. The Belfast Harbour Commissioners, together with Titanic Quarter Ltd, will contribute a further £43.5 million, while Belfast City Council has earmarked £10 million towards the initiative. But the groups funding the scheme have yet to sign a crucial legal agreement which, according to the North's Department of Enterprise, sets out the terms relating to the "funding, development and operation" of the project. Why this agreement has caused a stumbling block is a question none of the funders are keen to answer.

For tax reasons, the Titanic Signature Project will be owned and operated by a charitable foundation, the Titanic Foundation Ltd, with a board of independent trustees. But in the meantime, the Department of Enterprise is the lead government agency on the project. It is unwilling to shed any light on what has happened to the Titanic Signature Project. A spokesperson for the department said it "would not be appropriate to disclose the detail" of the legal agreement or, in short, provide an explanation as to why it is the only stumbling block standing between Northern Ireland and a multimillion-pound tourist initiative. But until the agreement is signed, construction of the project is effectively mothballed.

This poses a major problem for the North because millions of pounds of public money have been earmarked for the project.
But it also creates a considerable headache for the Northern Ireland sister company of Dublin-based Harcourt Developments. Harcourt Construction (NI) holds the contract to develop the scheme because Harcourt has exclusive rights over the former Harland and Wolff site.
Harcourt has been closely involved with the east Belfast site since it set up a subsidiary, Titanic Quarter Ltd in 1998, to get involved in the regeneration of the 185 acres of lands previously home to former shipbuilder. The site itself remains in the ownership of Belfast Harbour Commissioners, but Harcourt holds the development rights for the Titanic Quarter. Unlike most major construction projects involving substantial amounts of public money in the North, Harcourt did not have to tender for the Titanic Signature Project because of its exclusivity rights over the Titanic Quarter. But it had to agree to a stringent set of conditions to ringfence the funding for the project.

A Belfast City Council a spokeswoman said Titanic Quarter Ltd had fully met all the conditions it required to secure its £10 million funding. However, she said the council would not sign the funding agreement for the Titanic Signature Project until all the other funding partners had agreed to do so. Titanic Quarter Ltd had initially warned that it needed to start "excavation works in January 2009 in order to complete all works for first quarter 2012". It is now significantly behind schedule and the hundreds of construction jobs which the project promised to deliver for the North during the economic downturn have never materialised.

Although Titanic Quarter Ltd says it remains confident that the project will be finished on time, some doubts are beginning to surface. If there is a not a major breakthrough soon on the Titanic Signature Project, Belfast will have only a ghost of chance of capitalising on the centenary of the Titanic 's very bad run of luck.

(1) http://www.thisisjersey.com/2008/12/02/harcourt-unveil-their-titanic-belfast-scheme/
(2)  http://www.irishtimes.com/newspaper/finance/2009/0714/1224250638862.html

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