In an ongoing battle to save the site of a former Odeon cinema, a bridging lender has emerged as an unlikely saviour of the historic building.
It has been reported that Edinburgh-based Graf Mortgage Coporation will be funding Alan Scobie’s £1.6 million bid for the site of the former Odeon cinema, which he plans to keep intact.
However, the owner of the 1930s art deco building wants to demolish the B-listed auditorium in order to make way for an ‘art hotel’ in Edinburgh’s Clerk Street, an option that the council has not ruled out.
Also known as the New Victoria, the building lies empty and its future hangs in the balance as the controversial planning application for redevelopment is being considered.
It has been claimed that the building's owner, Duddingston House Properties, has not got permission to carry out its plans - a claim denied by the firm.
A spokesman for owner Duddingston House Properties told The Scotsman: “In our view any moderate due diligence you would do around any transaction clearly demonstrates that there is no credible bid on the table. One bid appears to have funding but a report by renowned experts appears to raise serious concerns about that bid.”
Steve Green, managing director at Graf Mortgage Corporation, said: “We are not at liberty to discuss what is decided between our company and our borrowers.
“We do not offer loans over 75 per cent, however there is no evidence to suggest that the bidder of the site could not fund an additional 25 per cent of the purchase price.”
Business experts have declared that there is no evidence to suggest that a bid to take over the former cinema is ‘realistic or credible’, according to a report by business advisers Ernst & Young published by The Scotsman.
The report, which was obtained by the Edinburgh Evening News, states: ‘There is no proof of the level of funding support being offered by Graf Mortgage Corporation; the letter only confirms that they would provide an undisclosed amount of funding support.’
It also describes Graf as ‘a provider of bridging finance’ and points out that the company's website indicates it can only lend to a maximum level of 75 per cent of the value of a property.
It also describes Graf as ‘a provider of bridging finance’ and points out that the company's website indicates it can only lend to a maximum level of 75 per cent of the value of a property.
It said: "At a purchase price of £1.6 million it is reasonable to assume that the maximum sum which Graf might provide as a bridging loan would be £1.2 million. No evidence has been provided as to how the further funding requirement is to be met.
"Our overall conclusion is the offer has not demonstrated that a complete funding package has been secured for the purchase. In addition, the offer does not identify a funding plan for the development work required.
‘We therefore believe there is insufficient financial evidence for the offer to represent a realistic or credible offer."
"Our overall conclusion is the offer has not demonstrated that a complete funding package has been secured for the purchase. In addition, the offer does not identify a funding plan for the development work required.
‘We therefore believe there is insufficient financial evidence for the offer to represent a realistic or credible offer."
In the letter published by The Guardian earlier this year a national heritage group called for the building to be upgraded.
Euan Leitch of The Architectural Heritage Society of Scotland, suggested that Duddington could apply to upgrade its listing from B-listed to A-listed to qualify for refurbishment funding, saving the auditorium from demolition.
He said: “The Society would fully support the City of Edinburgh Council in refusing consent thereby forcing DHP to sell the former atmospheric cinema to an owner who would preserve a rare element of Scotland's architectural heritage for future generations and has a track record of restoring a historic cinema.”
Councillors will make a final decision tomorrow.
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