Leak reveals £80m Fountainbridge flats deal is in doubt

An artist's impresion of how the development at Fountainbridge will look at India Quay. Picture: Contributed
An artist's impresion of how the development at Fountainbridge will look at India Quay. Picture: Contributed
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The city stands to lose out on millions of pounds if it pulls the plug on major development plans for Fountainbridge.

The council’s arms-length development company EDI has spent £2.3 million pursuing plans which would see flats built for private rental in an £80m scheme at India Quay.

But the deal – which would see the city sell council-owned land to private developers – has effectively been called in by council chief executive Andrew Kerr. The change of tack comes amid moves to wind up the arms-length firm and demands from within the local authority to use the land in question for more affordable housing instead.

Confidential papers prepared for the EDI board and leaked to the Evening News reveal that two developers are interested in building the flats at India Quay.

EDI has been negotiating with the firms and a deal is on the table which would net the local authority several million pounds.

The report notes that EDI has banked £3.5m less this year than it expected to as a result of not pressing ahead with the proposed development at India Quay.

The report states: “In effect EDI is unable to take any further action to progress the BTR [Buy to Rent] section of India Quay.”

The EDI Group announced earlier this year that it was winding down operations with activities being handed back to the council.

Regeneration of the land, earmarked for a £200m overall proposal to build flats, shops and businesses on the old McEwan’s brewery plot, stalled after the Brexit vote caused investors to withdraw.

New talks have taken place with investors over the last two months to negotiate a deal which would enable the Build to Rent scheme, as designed by EDI, to proceed.

But the deal, originally tabled in January, cannot be agreed without council 
approval.

The reports states one of the developers “remain very keen on the site and still wish to do the deal and it was expected that they would have been willing to increase their offer”.

It adds: “The EDI board could therefore only make a recommendation or request to the council that it agrees to the transaction should it be taken forward either through EDI or directly by the 
council.”

The EDI Group transition strategy announced by the council in September proposes all assets will be transferred within approximately five years with some transferring this year.

A council spokeswoman, said: “Earlier this year we announced the council’s decision to change current arrangements for city development by providing a new, in-house one-stop-shop for developers and investors.

“As a result of this decision, we are now working closely with the EDI Group regarding options for the development of India Quay.

“A report will go the Housing and Economy Committee in March to give an update on this issue.”