Birmingham City Council has revealed it has run out of money for the second phase of its ambitious £500m Paradise development
The city centre Paradise development has faced scrutiny from city councillors after it was revealed they were kept in the dark while costs spiralled to £100m.
City councillors were told that overspends were inevitable but it was conceded there had been a significant failure in communication between builders, the city council and the Greater Birmingham and Solihull Local Enterprise Partnership (LEP).
The whole Paradise scheme is now in limbo as the city council tries to raise an extra £50m to deliver essential infrastructure works paving the way for phase two.
Despite this, a Birmingham City Council audit committee was told it was still an ‘excellent scheme’ which would generate 10,000 new jobs and more than £300m worth of business rates when completed – outweighing the growing costs.
Council leader Councillor Ian Ward admitted he only became aware of the situation with the Paradise development earlier this year.
He said: “When the decision [to approve initial funding] was taken it was recognised this was strategically important for the city. This remains the case today.
“What we have got to get right is the change in governance.
“The fact that there is a return to the LEP through business rates growth and return to the city council, does, I believe, mean we have to find a way of ensuring this development continues otherwise we will be left with a problem in that particular location for years to come.”
Talks are now ongoing with the LEP about finding the £50m.
The Paradise development – which is being managed by developer Argent – includes ten new office buildings, a hotel, public spaces and 550 car parking bays between Centenary Square and Victoria Square, as well as shops, restaurants and cafes.
