CASH-strapped Hull City Council could be forced to spend an extra £1m on bringing a handful of derelict Fruit Market warehouses back into use.
The move comes after the condition of some properties in Humber Street was found to be far worse than first thought.
Work on the buildings started last year immediately after the Freedom Festival as part of wider plans to develop the area as Hull's main arts quarter.
At the time, a budget of £3.3m was allocated for the facelift scheme.
But a new council report says the estimated cost has been revised upwards to £4.3m because of the need for more extensive repairs to some of the old warehouses.
It means an average of just under £187,000 is set to be spent on each building.
Many have suffered what is described as "substantial water ingress" in the eight years they have been left empty following the relocation of fruit traders to a new purpose-built market in west Hull.
Costs have also soared because three additional empty buildings have been added to the project because they stand next to some of the worst properties included in the original scheme.
Two of these additional warehouses were also found to be in a dangerous structural condition.
The report says: "Early site works by (contractors) Houlton demonstrated the cost of refurbishment of these empty commercial warehouses was significantly higher than first estimated.
"Due to the complex nature of working with conservation buildings in very poor condition, a number of challenges have been faced within the programme, resulting in cost increases."
Until last September, only limited structural and asbestos surveys had been possible because of restricted access to some of the buildings.
The report said: "The properties had suffered substantial water ingress over a period of eight years of being vacant and there were areas of partial collapse.
"When the scheme started on site, contractors carried out alterations and limited demolition to the rear of properties to enable structural engineers to view previously inaccessible areas.
"These surveys revealed the condition of many buildings as beyond worst-case predictions.
"In the case of eight buildings, structural conditions affected their integrity and façade-retaining scaffolding was erected immediately to three of them."
One warehouse is now being completely demolished and rebuilt because of its poor condition.
The revised £4.3m budget will cover work to a total of 23 properties.
Funding is being drawn from a number of sources, including the city council, the Homes and Communities Agency and the Big Lottery. Council officials hope extra funding can be secured to meet the additional costs.
However, a sum of £1.2m previously earmarked for new pavements and street works in the area is being set aside as a contingency should those bids fail.
As well as being marketed for potential art galleries and studios, 14 new apartments will be created in some of the upper floors.
Councillor Steven Bayes, cabinet portfolio holder for visitor destination, said: "The refurbished properties will help diversify the economic base by encouraging high-skilled creative and digital industries. It is essential for the city that the scheme progresses."
'Work has to be done' BUSINESSMAN Geoffrey Rhodes, who runs an antiques gallery in Humber Street, said he supported the move to spend more money on some of the derelict properties.He said: "The work is necessary if the look and feel of Humber Street is going to be retained.
"I am looking forward to it all getting finished."
Last year, the nearby derelict Wellington House in Queen Street was demolished on safety grounds. Until then, the Victorian landmark was due to be refurbished and reused as flats under the government-funded empty homes programme.
