The troubled London Pleasure Gardens site has entered voluntary administration after generating disappointing revenues.
The 20-acre site on Pontoon Dock was opened earlier this summer to "bring a 21st Century version of London's historic Pleasure Gardens back to The Royal Victoria Docks".
However, it got off to a bad start with the infamous Bloc Festival in early July, which was shut down by police after less than a day in operation following severe over-crowding and reports of rushed barriers. Bloc subsequently went into administration.
Attendees at the event paid up to £125 a ticket to see stars such as Snoop Dogg and Orbital, but no headliners performed. Newham Council reportedly contributed a loan of £3 million to support LPG, which it hoped to recoup through collecting 20% of profits.
However, a spokesperson for the council said today in a statement: "The decision by London Pleasure Gardens Limited to enter into voluntary administration is regrettable but understandable. It is disappointing that the anticipated visitor numbers and revenue from recent planned events have not materialised.
"London Pleasure Gardens won the right to operate the site for two years from the London Development Agency and Newham Council as the winner of a Meanwhile London Competition. We will now work with the administrators to help secure our investment and to discuss the future scope and nature of our involvement."
The Secret Sundaze-organised mini festival Go Bang! was due to take place at LPG on August 26, featuring the likes of Four Tet as a headliner - but those behind the event decided to switch venue earlier this week.
In a statement they said that they "needed to be absolutely sure that our fans get the event they deserve. After much consideration, we have decided that an alternative venue is the best choice”.
Deloitte have today been appointed as administrators for London Pleasure Gardens Limited.
Deloitte's Rob Harding said: “Unfortunately, London Pleasure Gardens has underperformed against its original business plan both in respect of festival activity and far fewer visitors than originally envisaged passing through the site and using its facilities. This has manifested itself in a cash flow shortfall in the business resulting in the directors having no option but to appoint Administrators.
"We are now in discussions with all of the key stakeholders with a view to ensuring continuity of services on the site, whilst seeking purchasers for the business and assets, which include significant semi-permanent event structures.”
LPG is one of two exits Olympic attendees can take after visiting the Excel Centre in South East London, and organisers hoped to take advantage of the popularity of the Games.
According to a BBC report from Wednesday (August 1), a daily footfall of 35,000 people was expected during London 2012, but the reality has been closer to a fifth of that number. Traders claim they were over-sold how many people would pass by their stalls.
LPG co-director Deborah Armstrong quit the project earlier this week, writing on her blog: "It's important to share the journey though as its a far more complex and ambitious and big hearted project than a lot of people understand. I don't feel now like its following the vision that we set out to do but its important to maintain that - it's the whole point. Hopefully the road will swing toward it again at some point."