Caltongate collapse cost city £110,000 in lost rent

The Caltongate plans were scuppered when Mountgrange collapsed in 2009
The Caltongate plans were scuppered when Mountgrange collapsed in 2009
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The collapse of the Caltongate development has cost the city council more than £110,000 in lost rent, it emerged today.

Nine council-owned flats on the Royal Mile have been lying empty since November 2006 when occupants of the flats were rehoused to allow for the demolition of the building.

The one-bedroom flats would have brought in £110,176 but still lie empty and have now been vandalised. Concerns have been raised about the cost to the council of the flats sitting unused – and about missing a chance to provide short-term social housing.

Demolition of the flats was put on hold due to the collapse of developer Mountgrange in 2009, scuppering its site plans, which included hundreds of homes, offices, a hotel and conference centre, shops and cafes.

Councillor Cammy Day, housing spokesman for the Labour group on the city council, said: “It is a lot of money to lose and £110,000 could have been invested in repairs to people’s homes or even building new ones. It is also a shame ‘clean’ properties are sitting empty for five or six years while people can’t get houses, even though there is no real plan for what to do with that site.

“We have got such a shortage of housing in the city yet, for five years, we have had empty houses. I accept there was a plan for them at first but that is not now going ahead and even if it was for temporary accommodation then at least they could be used for something.”

Mountgrange bought the privately owned flats in the tenements facing demolition but the council still owns nine.

Council chiefs had agreed a deal to sell all the property it owns, including the flats, the C-listed Canongate Venture building and a series of archways on Market Street, but withdrew the assets amid concern about the amount of time it was taking Mountgrange administrator Deloitte to agree a sale.

It is now understood that Ronald Persaud, who was a director of the joint venture firm that announced £100 million plans for the New Street site in 2001, is heading a consortium of South African investors that is closing in on a deal to buy the site.

The council would then be expected to strike a separate deal for the property it owns.

City economic development leader Councillor Tom Buchanan said: “It is disappointing that we are not able to make revenue from rental property on the High Street but we have been working with the administrator to make sure a new owner takes over Caltongate and develops the site. There is a developer that is close to going public on a deal.”

Councillor Paul Edie, the city’s housing leader, said: “The accommodation is not fit-for-purpose. It is damp, and we could not house people there.”