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Inland Revenue fears over 'financial risks' of Gehry's Hove plans

A key Inland Revenue report has called into question the financial viability of Frank Gehry's contentious King Alfred development in Hove (pictured).

The District Valuer said there is 'significant risk' attached to the scheme, and expressed concern that the project's developer Karis would find it difficult to borrow money to finance it.

The 30-page report, received by Brighton and Hove City Council on 12 April 2006 reads: 'Karis is proposing a profit on development costs of 18 per cent and states that this is a level it needs to achieve in order to secure funding.

'In this particular case, there is in [the author's] opinion, significant risk attached to scheme, because of the requirement to provide very high-specification residential accommodation immediately surrounding public facilities.'

These revelations are the latest in a long line of hiccups for the scheme which includes plans for two skyscrapers - dubbed the 'tin-can towers.'

Meanwhile, Brighton & Hove Council has attempted to dampen the impact of the report. It claimed 'overall, the council is receiving a very favourable package'.

In particular, the council has highlighted a discrepancy between what the District Valuer and Karis claim the building will cost to construct.

This, it has claimed, is because the District Valuer has relied on 'benchmark figures' as opposed to the advice of independent quantity surveyors.

Karis was unavailable for comment at the time of going to press.

by Rob Sharp

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