Councillors are set to decide if a new state-of-the-art civic building at the centre of a major regeneration in North Edinburgh should be scaled-back due a funding shortfall.
Work on the £15 million MacMillan Hub got underway in March despite a £1.87m gap in finances needed for its construction.
A partnership project between the council and North Edinburgh Arts (NEA), the Hub at the newly-created MacMillan Square in Pennywell will comprise six social rent homes, an early years centre, café, library and skills hub, theatre and studio space.
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In addition, the existing North Edinburgh Arts Centre building will be extended and reconfigured as part of the development, which forms part of a £200m regeneration of Pennywell and Muirhouse.
Of the funding gap identified, Edinburgh City Council agreed to loan fund £994k to ensure there would be no delays to work on the 'overall structure' of the new facility. In a bid to plug the remaining shortfall, the arts charity set about fundraising - but has failed to raise the full amount needed.
With the project still more than half a million pounds short, councillors are now being asked to vote on the next steps and decide if the Hub should be scaled-back until more funds are acquired.
Contractors initially set a deadline of August 8 for finalising any 'de-scoping' of the project but agreed an extension so the council's finance committee could discuss options.
When the Committee meets on Thursday (September 8) members will be faced with three options, the first being to scale back works.
Council officials have warned this could "threaten the overall project aims", leaving large areas of the NEA facility "incomplete and, most likely, incapable of beneficial use".
The second option before councillors will be to partially de-scope the project, which would "remove floor finishes and painting and decorating elements from the contract" with savings estimated at £250k.
However it is expected the committee will vote on the third option, which officers are recommending, to proceed with the full project.
"Under this option the Council would agree to forward loan fund the whole project and revise the development agreement with NEA accordingly to introduce a repayment plan," a report stated.
It added: "Accordingly, it is recommended that the funds raised by NEA to date should be put towards the project with the Council front loan funding the remaining elements of the project.
"The council will set a long stop date for the loan to be repaid, for example, 24 months from the signing of the development agreement between the Council and NEA.
"The Council and NEA will continue to work closely to secure funding in the interim with an aim of covering the loan costs as soon as possible."
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