The £300 million plan to revive a gap site in the heart of Edinburgh’s Old Town is set to be scaled back, with developers admitting the new scheme will be “less ambitious”.
It emerged last week that South African investors had completed a deal to buy the Caltongate site from administrators of Mountgrange, which originally developed the plan for the site.
Councillors have now also backed proposals to sell a series of council properties and land to the firm in order to help get development going. Developers are expected to bring forward new designs in the new year before submitting a new detailed planning application for the first part of the scheme.
They have admitted that economic conditions mean they will have to review what will be done with the land, which was originally to be transformed into homes, offices, a five-star hotel and conference centre, shops and cafes.
Lukas Nakos, who heads up both MAS and Artisan, which together make up the consortium behind the plans, said: “The sheer size and scale of the site, lying as it does at the heart of one of the world’s most historic city centres, offers us exceptional opportunities for a high-quality development.
“It will be less ambitious than originally conceived and will be well-attuned to the present economic climate.”
Councillors yesterday agreed to sell nine flats on the Royal Mile, the former North Canongate Infant School in New Street – now known as the Canongate Venture building – the Market Street arches and garages, and a store and flat in Cranston Street, for £3.4m after an independent valuation.
Julie Logan, chair of the Old Town Community Council, said: “Clearly it is their intention to modify the original plans, and yet there has been no moves by the developer to contact – let alone consult with – local stakeholders to date.
“By tying the [council] land up in this unconditional deal and allowing the developer to control all the land, there is no way to protect the community from the site stagnating for another five years as developers wait for land values and investment values to increase.”
Councillor Tom Buchanan, the city’s economic development leader, insisted he does not expect the plans to be scaled back in the longer term.
He said: “What they are saying is they will do this over a longer period and not develop the whole scheme in one go.
“I want development started because once it does start it will encourage others on to the site and encourage interest in the office parts and other parts of the site.”