SHETLAND’S cinema and music venue Mareel could face closure despite a very successful first year unless a six figure sum can be raised to settle the final cost of the building.
Trustees at Shetland Arts Development Agency were told on Thursday evening that the organisation ran a deficit of £163,250 in the last financial year.
This leaves no cash reserves to cover the outstanding costs associated with the 18 month delay in completing the £13.5 million building, which is still subject to a dispute between the arts agency and builders DITT.
SADA chairman Danus Skene insisted that there would be no further approaches to Shetland Islands Council or Shetland Charitable Trust for funding.
Instead they will be looking to sell off some of their smaller buildings, like The Booth in Scalloway and the Weisdale Hatchery, while looking for extra government money through Highlands and Islands Enterprise and Creative Scotland, both of whom have been very supportive of the new arts complex.
Skene said that once the capital account has been settled, he is confident the organisation can sustain itself financially.
Cinema audiences at Mareel have far exceeded expectations, and while substantial losses have been made on concert programming, these issues are in the process of being resolved.
In future there are likely to be fewer large scale productions involving many performers that cost more to bring into the isles, until the income situation improves.
Meanwhile the delays in completing the building have saddled the organisation with a number of extra costs, including staffing and renting their old premises at the Toll Clock.
Skene said that overall Mareel was achieving the targets that were set for itself five years ago when the business plan was first drawn up, generating one per cent more income than originally forecast.
On that basis Shetland Arts will be able survive on its current £750,000 annual grant from Shetland Charitable Trust, even taking into account expected cuts in that funding.
“We are capable of sustaining ourselves and in the last financial year we showed a tiny operating surplus of £17,434, which is quite remarkable given that the original business plan projected that it would take four years to reach this point,” he said.
“The gloomy news is that we have to get the capital account settled, closed and tied up to get on with the job that we are meant to be doing.
“I have made it absolutely clear to everyone involved that we can be brought down unless this happens and we don’t have the means to do it ourselves.
“We hope to get some additional help from our national partners at HIE and Creative Scotland and we will have to find some money ourselves, which means selling some remaining assets that we have.”
He added that Shetland Islands Council still had a role in helping to facilitate discussions with DITT to resolve their dispute.
Earlier this year the council agreed a complex leasing deal that injected £1.1 million into Shetland Arts to help with the cost of the building delays, however this sum was insufficient to cover all the outstanding costs.
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