City chiefs set to waive Â£1m to kick-start mansion plan

Tartan tycoon Dildar Gold – one of the Gold Brothers, who own a number of tourist shops in Edinburgh – bought the historic Redhall House in Craiglockhart in 2007, along with its grounds.

The £1.7 million purchase came with the condition that the B-listed building was maintained and redeveloped, but it has lain empty ever since and is now in a state of dilapidation.

In an effort to kick-start development, the council is considering scrapping an existing “clawback agreement” that would have seen the owner forced to make payments to the city if the land is built on.

The move comes as Mr Gold met a last-ditch deadline set by council officials on Monday to submit vital details about his latest planning application.

He wants to divide the former children’s home into six flats and build eight houses on its grounds. Under the current clawback agreement, this would have made the council £1,144,678.

The council previously launched legal action against Mr Gold to “enforce development obligations” – but this has been put on hold while a settlement is sought.

Local Green councillor Gavin Corbett branded the situation a “shambles”. He said: “The developer paid an absurd price for the property and has then stood by and watched it deteriorate through weather and vandalism.

“Now he expects the planning system to bail him out and to be let off the hook of payments for schools and other issues.

“The so-called enabling case is paper-thin and based on claims that whatever is done the development will make a massive loss.

“If that is really the case, he should cut his losses and sell the property on to someone who will convert it without lots of new building – just as was supposed to be the case when it was sold back in 2007.”

A report set to go before councillors on Thursday admits that “waiving the council’s rights to any payment under the existing agreement potentially prevents the council from receiving a large payment if new residential development takes place”.

But it says it is “highly unlikely” the owner would proceed with the restoration of Redhall House if the council insists on payment of the clawback sum – as it would hit profits and squeeze cash the developer needs to revamp the main building.

It suggests replacing the clawback payments with a new agreement entitling the council to money if the development produces “excess profit”.

Councillor Alasdair Rankin, finance leader, said: “My impression is that the owners have provided enough to come to a solution.” Mr Gold could not be reached for comment.