Work to turn an old Ikea store in Coventry into a cultural venue has stalled after the scheme’s main contractor collapsed.
Construction company ISG went into administration on Friday.
Speaking on Tuesday, Coventry City Council said work at the site had stopped due to the “sudden and unexpected news”.
The project has already faced rising costs and the local authority, which is leading the work, said it was “considering its options”.
ISG reportedly put in a bid worth £44m for the project before its UK operations went into administration.
The news comes months after councillors signed off on extra money to cover the scheme’s soaring costs.
The council said ISG had been paid for the value of works to date, which represented less than 4% of the total contract.
A spokesperson said: “We are in contact with our partners on the project and the council is currently considering its options and next steps.
“The extent of any recoverability of additional costs incurred by the city council will be determined by the administration process.”
The seven-storey building, which has been vacant since the store closed in 2020, will host a national collections centre and arts space.
In a statement, administrators from EY, formerly Ernst & Young, said ISG’s UK operations had ceased to trade with immediate effect.
It added: “ISG’s UK business has experienced liquidity constraints in recent months. The directors explored a number of options to secure the future of the business, including a sale of all or part of the group and refinancing options.
“Despite significant efforts to secure a sale of the group over many months, a deal could not be completed.”