Pavilion House: Scarborough Council set to apply for further £20m funding to develop 'town's ugliest building' – but could increase borrowing

The planned application to the Government's levelling up fund is to support and progress the delivery of the station "gateway" and new digital workspace FabLab+ in Scarborough town centre.

If the grant is approved, £12.4m of funding would go towards the redevelopment of Pavilion House as a public sector hub and "one-stop shop" for public access to a range of services as well as serving as office space for council staff and "other public sector partners".

Once voted Scarborough's ugliest building, Pavilion House was brought into public ownership by the council last year as part of its plans for developing the town centre.

The levelling up grant would also be required to contribute £3.8m towards the redevelopment of the former Comet corner building, also purchased by the council in October last year.

The Comet building is to be demolished and replaced with high-quality office accommodation and redeveloped as FabLab+ and commercial offices.

The council hopes the redevelopment will drive "new commercial activity and provide opportunities for local people and businesses to develop skills and capabilities in areas such as robotics, 3D modelling and cyber security".

Overall costs for the redevelopment of the former Comet building and refurbishment of Pavilion House have been estimated as £14.5m and £20.1m, respectively.

According to a report prepared for the cabinet meeting on Friday July 1, for the grant to be approved, the council must show The Department for Levelling Up, Housing and Communities how it proposes to fund any additional costs required to fund the projects.

As such, the cabinet is also being asked "in principle" to approve borrowing of up to £13.8m, though actual borrowing to deliver the projects "will be subject to further approvals including the production of a robust business case".

The council intends that further contributions not covered by the grant "would be funded from commercial rental returns generated from those buildings" as well as "cross-subsidies from other commercial phases within the Station Gateway development".

Additionally, £3.7m of the grant would be put towards the redevelopment of Scarborough Railway Station, focusing on structural improvements and bringing disused parts of the historic building back into use as a station hotel and food and beverage units.

To support and prepare the bid for funding applications, the council has engaged "specialist economic, financial and management consultants" Amion Consulting Limited.

Last year it was revealed that Scarborough Council spent almost £1m on consultants to assist with funding applications to the Towns Fund which the council described as "value for money".

The Towns Fund awarded Scarborough £20.2 million and Whitby secured £17.1 million to boost their economic growth.