Talks to find cash for city venue work

A series of options are to be investigated by the council in a bid to allow the 12m refurbishment to go ahead, after it was left with a 2.7m funding black hole when it failed to win lottery funding.

It is understood that one option is to set up an "arms-length" fundraising group – as the city council did to help fund the Usher Hall project. It would then be able to apply to trust funds and foundations to help make the project a reality. Another option is thought to be to try to sign up private firms to run the retail offering within the revamped venue. Council sources say there is already "significant interest" from companies.

Unless the council fills the gap quickly, it could miss out on nearly 500,000 of additional funding pledged by Historic Scotland and the Scottish Arts Council.

A 12m upgrade of the King's Theatre has already been scaled back after the council reduced its promised contribution from 6m to 2m earlier this year, pledging instead to add another 2m to the Assembly Rooms pot.

But it is not thought to be likely that further funds will be diverted from the King's towards the Assembly Rooms.

Councillor Deidre Brock, the city's culture and leisure leader, said: "Obviously it is extremely disappointing not to have been awarded the Heritage Lottery Fund grant. Our immediate priority now is to get round the table and reassess the plans as a matter of urgency.

"The Assembly Rooms is in desperate need of refurbishment and we are determined to press ahead with our plans as best we can.

"While we cannot pre-empt these urgent discussions by speculating on their outcome, there is frankly no realistic possibility of monies being diverted from existing culture and sport projects."

Deputy council leader Steve Cardownie has said that, despite the funding blow, it is "imperative" that a revamp goes ahead and insisted that nothing will stop the scheme progressing.

Opposition councillors had feared that the gap in funding could hit other culture and sport projects in the city.

Cllr Paul Godzik, culture spokesman for the Labour group on the council, said: "There will now be a black hole in Assembly Rooms funding and I would want to know quickly what effect that will have on other projects."

In January a council report revealed that a revaluation of the costs of the Assembly Rooms project showed that funding had fallen 2m short. The figure included an expectation that the council would win 2.7m of lottery cash.

A decision to reduce funding for the King's Theatre revamp from 6m to 2m allowed it to pump 2m from that project into the Assembly Rooms. But that has now proved to not be enough.

The Assembly Rooms was supposed to shut for 18 months in the run-up to the 2012 Festival. The proposals would include music hall improvements, new bars, a fine dining restaurant and shops.

Gordon Dewar, chairman of the Edinburgh Tourism Action Group, said: "The Assembly Rooms is a crucial component of Edinburgh's reputation as an events city, so it is vital all options are explored to retain this remarkable venue in its finest form."