The Wanganui District Council has failed in its bid to secure Government funding for the renovation of the Sarjeant Gallery.
But Wanganui Mayor Annette Main is confident the $10 million of funding from the Ministry for Arts, Culture and Heritage is still available for the upgrade, which is expected to cost at least $22.5 million.
The planned redevelopment includes an extension to the gallery, environmental controls and earthquake strengthening. The council intended to use the ministry funding, plus money from private donors, for the upgrade.
Ms Main said the project had been rejected because it had not met the full criteria for ministry money, particularly relating to other sources of funding and the project's breakdown into stages.
"The funding criteria which is not met is around the [Ministry] fund being a fund of last resort. This is Catch 22 for us - until we know there is the prospect of funding from government, it is very difficult to obtain commitments from private funders. We are advised that the money will be made available as matched funding; simply if we can raise $10 million, we will receive $10 million."
She said the council and ministry would discuss the best way for council to raise funds from other sources "so we can reach our fundraising goal as quickly as possible".
Ms Main said any project must receive the full support of Arts, Culture and Heritage Minister Chris Finlayson before it can be approved for funding. She said Mr Finlayson was supportive of the project but would like to see some changes to it.
"[Council had] a meeting with ministry officials to discuss the aspects they want to see developed. Primarily this is around detailed design, resource consent and the proposed staged development, which they have said should be one project."
The project had been divided into several stages but Ms Main said ministry officials told the council to reapply for the redevelopment as a single project.
"We have been told money has been held over from the current year's funds in anticipation of a new application," she said.
The council employed the Hastings-based Giblin Group to prepare the applications and help with fundraising. The cost was reportedly $130,000, with the council and Sarjeant Gallery Trust splitting the bill.
The council will hold a meeting at 2pm tomorrow to discuss the minister's decision. It's likely to be fiery, as one councillor has already suggested the council walk away from the gallery building, which has only 5 per cent earthquake strengthening.
Michael Laws said the gallery should abandon the site in Queen's Park permanently and relocate to the riverfront.
"The facts are pretty simple," Mr Laws said. "Wanganui can't afford to upgrade the Sarjeant Gallery. Even if we get a government subsidy, we are going to need to find an additional $10 million-$12 million from the Wanganui ratepayers and local charities to meet the project guidelines. A dollar to the Sarjeant is a dollar denied elsewhere."
Councillor Ray Stevens has requested a copy of the rejection letter from the ministry to the council.
"There are too many ifs, buts and maybes. We paid huge money for the consultant and we still failed," Mr Stevens said.