STORE giant John Lewis has dropped its objection to the massive St James redevelopment and removed its threat to quit the city.
The company had warned it could pull the plug on its flagship Edinburgh store in a row over plans to curtail its space during construction work on the £850 million scheme.
It claimed the loss of around 53,000sq ft of retail space during the building phase would have an “unacceptably severe” impact on the store and meant it could not keep trading.
But now an agreement has been reached that John Lewis will remain as the anchor store and continue trading during construction.
Council leaders said they were delighted the situation had been resolved.
It is understood there has been no change in the amount of space which will be lost temporarily, but there has been “a financial and legal deal” behind the scenes.
John Lewis had claimed the viability of the whole project to replace the current St James Centre would be at risk if it had to cut the size of its store by around a third while building work is carried out.
But insiders said at the time the company, which employs 850 staff in Edinburgh, was “playing hardball” with the developer in order to extract the best possible deal.
The vast majority of the 80 retailers in the St James Centre had already agreed to move out to accommodate the project, which will include new shops, restaurants, cafes, 250 apartments and a five-star hotel.
The council made a compulsory purchase order last year to allow the land and property acquisitions needed for the development.
A total of 78 objections to the compulsory purchase plans were received but all but one have now been resolved.
It is understood the remaining objection is not expected to hold up the development.
A progress report on the Edinburgh St James development going to next week’s council meeting says that, right up to the point that an agreement was reached with John Lewis, council officials “continued to assess and satisfy themselves of the viability of the project as a reasonable prospect in the event that John Lewis Partnership were to be replaced by a retailer of equal standing”.
Council leader Andrew Burns said: “It’s great news for the city that John Lewis, one of the city’s best-loved retailers, is going to form part of the new St James Quarter and continue trading throughout the construction period.”