Failed Canolfan Cywain received '£2m in public funding'
The Wales Audit Office is being asked to investigate events surrounding the collapse of a rural heritage centre project in Bala, Gwynedd.
The Canolfan Cywain centre ended less than five years after opening, after an investment of over £2m of public money.
Its assets have now been handed to the estate which owns the land.
Darren Millar, chair of the assembly's public accounts committee, wants an investigation, and the Welsh government said it work with the inquiry.
Following BBC Wales' investigation, Mr Millar said: "It's extremely unusual for a significant development which has cost around £2m to be given lock, stock and barrel back to an independent organisation after it's been funded by the public purse.
End Quote Sydna Owen Cafe owner
Why was there such a need to spend so much money to develop this kind of thing?”
"I think it's worth the Wales Audit Office taking a look at this and I'll be referring this matter as the chair of the public accounts committee to the Wales Audit Office asking them to undertake their own investigation."
The centre was developed and run by local enterprise agency Antur Penllyn.
It is understood the future of Antur Penllyn itself is now in doubt, and its directors have arranged a meeting to discuss winding up the agency.
BBC Wales spoke to a number of Antur Penllyn directors as part of the investigation, but nobody from the agency was willing to be interviewed.
Canolfan Cywain was officially opened by Ieuan Wyn Jones AM in April 2008, after receiving over £2m of public money.
Along with European Objective 1 grant aid, £35,000 was provided by the Snowdonia National Park Authority, £200,000 came from the Arts Council of Wales to provide art installations around the centre, and a further £21,000 was provided by Gwynedd council to run a country fair on the site.
A cafe and a shop were built, along with exhibition spaces.
By September 2011, the centre had run into difficulties and the decision was taken to mothball the site until further notice.
This was while the directors of Antur Penllyn looked for new organisations to take over the running of the centre.
This proved unsuccessful, and BBC Wales understands that Antur Penllyn decided to bring the development to an end.
End Quote Simon Mundy Wales European Arts Forum
Not enough thought was given to how the projects would run themselves and create an income once they were up and running”
It transferred the lease and the centre's assets over to the owners of the land, the Rhiwlas Estate, in October of last year.
According to Gwynedd council, the council supported the directors of Antur Penllyn in their attempts to find new owners after the centre was mothballed.
While there was some initial interest, no formal offers were forthcoming.
In a statement, the Arts Council of Wales told BBC Wales it had a legal agreement with the landowner to ensure that members of the public could visit the art installations on the site, and that this agreement existed beyond the life of the Cywain centre.
Some residents in Bala are now calling for an investigation into how such an important project failed so soon after opening, and how it was handed into private hands after being developed with public money.
Sydna Owen, who runs a cafe in the area, said: "It's incredible how much money was used in the first place. Why was there such a need to spend so much money to develop this kind of thing?Public money
"The people we speak to here are very, very bitter that so much money was wasted, totally wasted, and the place is like a big white elephant, which wasn't located in the right place in our opinion.
"There should be far more accountability and I don't understand why the council and those who handed out the grants haven't investigated this further? I think it's very important that they investigate."
Simon Mundy, chair of the Wales European Arts Forum, said it was unwise for public authorities to spend large amounts of public money on arts or heritage projects and then imagine they would run themselves as commercial enterprises.
"Wales is littered with failed projects which received capital funding, but not enough thought was given to how the projects would run themselves and create an income once they were up and running," he said.
The Welsh government said, "Antur Penllyn received funding to set up a centre for cultural and heritage activities in Bala, which opened in 2008.
"We will be working with the Wales Audit Office to look into the full details of the funding awarded to this project. It would be inappropriate to comment further at this stage."