Delays to Gloucester's premier redevelopment scheme The Forum have already cost taxpayers approximately £450,000 in lost income.
The King's Quarter scheme has been championed as transforming the city centre and remains crucial to converting the district into a thriving hub for Gloucester.
The £107m development includes 142,000 sq ft of state-of-the-art office space, a four-star hotel, apartments and a 393-space multi-storey car park alongside retail premises.
The Forum is expected to boost visitor numbers in the city centre and draw over a thousand individuals to King's Quarter whilst generating new opportunities for local businesses.
However the Gloucester City Council initiative, which is approaching completion, has encountered numerous obstacles throughout its construction phase.
City leaders disclosed this week that these postponements have resulted in a deficit of £3.6m in projected revenue from the development.
This shortfall has been balanced by diminished revenue interest expenses of £3.15m which will be capitalised and distributed across the 40 to 50 year amortisation timeframe to be met by future income streams.
Councillor Andrew Gravells (C, Abbeydale) enquired whether the completion overrun for The Forum had affected the council's finances.
"The anticipated income is less than was expected and that the shortfall will be covered by additional borrowing, which will be capitalised," he asked in a written question to cabinet. What does the shortfall in income come to please?"
Resources and assets cabinet member Declan Wilson (LD, Hucclecote) responded by explaining that this year's budget was formulated on the assumption that most of The Forum would be substantially finished during the opening four months of the financial year.
"Accordingly the estimated additional income from the property and the car park was included in the budget at £4m," he said.
"In accordance with standard accounting practice the interest charges on the construction project up until completion are capitalised into the cost of the buildings to be spread over the estimated useful life of the building, similar to the asset depreciation charges that occur.
"The estimated useful economic life of the building has yet to be finalised but would typically be 40 to 50 years for buildings. Once the buildings are completed and leased out, the interest charges can no longer be capitalised and become a charge to the revenue account to match against the income receipts.
"Similar to the expected income the budget for 2025-26 included the estimated additional interest cost of the properties at £3.5m.
"The delays in completion of the properties has led to the forecast income not having been received, but at the same time has meant that the expected revenue costs in relation to interest have not been incurred as the interest continues to be capitalised.
"The income forecast for The Forum for 2025-26 included in the 4 months to July 2025 report presented to [the overview and scrutiny committee] was £0.4m, leaving a delayed income of £3.6m.
"As noted above this translates to a reduced revenue interest cost of £3.15m that will be capitalised and spread over a future 40 to 50 year amortisation period to be covered by future income receipts."
