SA: Arts minister Gayton McKenzie halts Downtown Music Hub funding amid probe

The move aims to scrutinise the more than R93 million (about $5 520 900) in public funds allocated to the project since its inception in 2008. The investigation will cover all disbursements to date and help determine the most sustainable use of the heritage asset going forward.

Originally established by former Minister of Arts and Culture Pallo Jordan, the Downtown Music Hub was intended to broaden access to professional recording facilities by acquiring the iconic Downtown Studios in central Johannesburg, a site linked to numerous gold and platinum-selling albums in South African music history.

A Special Purpose Entity (SPE), incorporated in 2010 as a non-profit company under the name Downtown Music Hub, was created to manage the asset. The National Arts Council (NAC) played a key role in the process, although attempts to formally transfer the building and its assets to the SPE were never finalised. A lack of consensus between the Department, the NAC, and National Treasury caused significant delays and complications.

As a result, the NAC was forced to list the property on its books, leading to adverse audit findings due to conflicts with Section 6(3) of the NAC Act, which prohibits the Council from operating income-generating businesses. The studios were eventually left to be run independently by the SPE.

Despite the vision behind the project, the Hub has consistently operated at a loss, requiring the Department to subsidise operational and maintenance costs. The ongoing uncertainty surrounding the building’s ownership has also prevented the SPE from securing private investment. Additionally, health and safety concerns at the site have further hindered income-generating opportunities.

While media speculation has pointed to financial mismanagement, the Department clarified that no adverse findings have been recorded concerning the project’s finances beyond those already flagged by the Auditor-General regarding the original building acquisition and related accounting procedures.

Departmental records show the following major grants were allocated over the years:

• 2008 – 2009: R7.5 million for the initial asset purchase and operations
• 2013 – 2014: R20 million for infrastructure upgrades
• 2016 – 2018: R11.9 million for operational costs
• 2024 – 2025: R4 million as the most recent grant

An internal task team appointed in 2021 had recommended repositioning the Hub under one of the Department’s officially declared Cultural Institutions, but a final decision was never reached.

McKenzie said the current funding model is “simply unsustainable” given the Department’s broader budget constraints.

“We will focus on what the future of this important, nostalgic music heritage site will be, but it is clear that it cannot carry on as things have been,” he said.