Armagh Jail project under threat

image captionThe £25m project aims to turn Armagh Jail into a hotel, retail units and housing

A property company in England is close to withdrawing £11m funding towards a major regeneration project in Armagh.

The Osborne Group has been working on plans to turn the city's historic jail into a luxury hotel since 2007.

It said it was "very disappointed" by indications that Stormont departments will not increase their share of the finances by a required £4m.

It has told Armagh Council unless the funding is negotiated by September it will pull out.

Council leaders in the city have sent a letter to the Office of First and Deputy First Minister saying they were "extremely dismayed".

Councillors had believed Stormont would bridge the funding gap as the project is crucial to helping revitalise the city centre and boost tourism.

"I think it would be a disaster for Armagh if this did not go ahead," said Trevor Osborne, head of the Bath-based property group.

"What has proved difficult is for the individual budget holders to come to terms with what they should each contribute."

'Great worry'

The joint venture project will cost £25m and deliver a hotel, retail units, housing and a public area.

Mr Osborne's company has increased its funding from £8m to £11m.

The council has also earmarked £2m for the project.

But the project needs £10m from Stormont, but only £6m has been agreed.

image captionPrince Charles visited the jail during a visit to Northern Ireland in 2012

A further complication is that the shortfall is putting at risk a potential £2m grant from the Heritage Lottery Fund.

The Prince of Wales visited Armagh jail in 2012 and was talked through the plans.

Mr Osborne said he had kept him updated.

"I have told him that we are delayed and unless it is clarified soon the Heritage Lottery Fund may not support it," he said.

"He does regard that as a great worry.

"I worry it will not come together and we will have wasted an awful lot of time and raised aspirations among local people, only for them to be deflated."

In a statement John Briggs, chief executive of Armagh Council, said the council had been informed by the Osborne Group that "unless assurances or agreement could be found in relation to funding it would withdraw from the project."

"This is clearly a hugely disappointing blow for Armagh, particularly after so many years of planning, commitment and hard work," the statement continued.

"However, despite this, we remain hopeful that a resolution can still be found to ensure this vitally important project goes ahead."

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