Sandra McLellan (Cork East, Sinn Fein)
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Question 28: To ask the Minister for Tourism; Culture and Sport his plans to address the situation in which the Lighthouse Cinema, Dublin 8, has been closed due to large increases in rent from the landlord. [10842/11]

Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
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The background of the State's involvement with the Light House Cinema goes back to February 2006, when the then Minister for Arts, Sport and Tourism approved a capital grant of €1 million towards the development of the Light House Cinema in Smithfield, Dublin. Construction began on the project in March 2007 and it was officially opened in May 2008. The grant was provided for the fit-out costs of the project rather than the construction costs. Further State funding of €750,000 was provided for the project from the Cultural Cinema Consortium, which comprises the Irish Film Board and the Arts Council.

The State's investment in the Light House Cinema is protected through a legally registered charge on the property. This charge allows that in the event of the Light House Cinema ceasing to operate from the premises in Smithfield in the first five years of its operation, the Minister can choose either the repayment of the State grants or agree to allow another arthouse cinema or cultural cinema to occupy the building for the remainder of the lease so that the premises remains in use as an arthouse/cultural cinema centre.

The Cultural Cinema Consortium has further liens on the premises. As the cinema was opened in 2008, this five year agreement has a further two years to run.

On 15 April 2011, the High Court placed the Light House Cinema into involuntary liquidation and appointed a liquidator. On 27 April Mr. Neil Hughes of Hughes Blake was appointed receiver and manager by Bord Scannán na hEireann/the Irish Film Board and the Arts Council with the agreement of my Department. Following appropriate examination and analysis of the emerging situation, my Department will be advised by the Chief State Solicitor and the Attorney General on the best approach to take in conjunction with Bord Scannán na hEireann/the Irish Film Board and The Arts Council.

I understand that the receiver will seek expressions of interest in taking over the management and running of the Light House Cinema by placing advertisements in the national media.

It is regrettable that such a fine facility is currently closed, but I hope that a new tenant can be found to continue to operate the premises as an arthouse and cultural cinema centre. I am constrained in saying much more at this juncture.

Sandra McLellan (Cork East, Sinn Fein)
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The Light House Cinema added much to the cultural landscape of Dublin, providing an opportunity for small independent local and international film makers to air their works and cinema goers an opportunity to sample the wares of alternative productions. Closure of the cinema in April of this year marked a milestone in yet another false dawn for the people of Dublin's north inner city. Would the Minister agree that the story of the Light House Cinema is interwoven with the story of upward only rent reviews and the debacle that is NAMA?

The Light House Cinema was established, viable and sustainable, reporting its best box office receipts in the months leading up to its forced closure. Would the Minister agree that a lease signed in 2007 for an annual rent of €100,000 should not be doubled to €200,000 by 2010, in the middle of the worst recession in the history of the State? The legislation allowing upward only rent increases for commercial leases is absurd.

Ciarán Lynch (Cork South Central, Labour)
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There is a danger of the Deputy's time expiring without the Minister having time to reply. I am trying to assist her in asking her to ask a question.

Sandra McLellan (Cork East, Sinn Fein)
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What will the Minister do to ensure the Smithfield area is promoted as a cultural quarter for Dublin's north side?

Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
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The agreement made with the operator and owner was that in year one, from May 2008, the rent was set at nil; in year two, from May 2009, it was set at €100,000; in year three, from May 2010, it was set at €200,000; in year four, from May 2011, it was set at €400,000; and in year five, from May 2012, it was set at €500,000. The owner entered into an agreement with the operator expecting this return but the operator was not in a position to provide the rent that had been agreed - that is the problem. The owner, in turn, appointed a liquidator, and the Department, with the Arts Council and the other interested bodies, appointed a receiver to protect the taxpayers' huge investment in this project.

At this stage, the receiver is seeking expressions of interest. There are some interested parties and the receiver is following up to ascertain whether this interest is real and to acquire an operator. It is in all our interests to ensure that this fine state-of-the-art facility continues to be in use and to serve the people, not only of Smithfield and surrounding areas but the people of Dublin and visitors to the country. I agree with the Deputy that the doors should be opened again in this fine facility which exists due to a large investment by the taxpayer.

Sandra McLellan (Cork East, Sinn Fein)
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The Minister has covered most of the questions. When will a new tenant will be identified and put in place?

Jimmy Deenihan (Kerry North-West Limerick, Fine Gael)
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That will happen as soon as possible. The Deputy may be aware that I met Deputy Costello, who first raised the issue, and Deputy Donohoe just last week with a deputation of some of the interested parties. A discussion is ongoing and every effort is being made by all parties to try to resolve the issue.