Gap site deal to boost city coffers

The Caltongate development
The Caltongate development
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A DEAL to kick-start development on a notorious Old Town gap site will inject more than £6.5 million into city improvements but slash tram project funding, it has emerged.

Councillors are set to approve an agreement with developers Artisan REI to pave the way for a £300m project at Caltongate that will see the construction of a five-star hotel, conference centre, offices, shops, cafes and 165 new homes.

The developer will fund enhancements to Calton Steps and Calton Road Railway Bridge – among other works yet to be disclosed – and pay towards increasing capacity at a secondary school, real-time bus information, a green travel plan and 645 square metres of business space, if the former North Canongate Infant School in New Street – now Canongate Venture – is redeveloped.

However, a planned £600,000 contribution to the tram project will be cut by more than 90 per cent.

Guidelines indicated the council only required around £1.6m in public realm contributions but Artisan has agreed to provide around four times that after taking over the project in December from administration-hit developer Mountgrange Caltongate Ltd.

Work to improve East Market Street and Jeffrey Street junction, included under the agreement with Mountgrange, will not be financed under terms proposed by Artisan.

Similarly, the city’s tram way, which was due a £583,431 boost under the previous deal, will see less a tenth of that sum, with Artisan prepared to contribute just £50,000 to the beleaguered project.

The report to go before the city council tomorrow reads: “Artisan have indicated that they are not willing to make a contribution at this level as they do not believe that the development will rely on, or benefit from the tram to such an extent, that this amount is justified.”

A spokeswoman for the city council said the reduction in tram contributions would not have a “detrimental impact” on the funding position as reported to City Chambers in June last year.

Marion Williams, director of the Cockburn Association, said the pending deal and council report was “fair and made sense”. “I was not surprised by any of it,” she said. “We have had a couple of meetings with [Artisan] and feel that there’s good communication with the various groups. “I’m pleased they are keeping to the 25 per cent affordable housing [as part of the proposed housing stock being built].

I know from talking to them that they recognise the importance of bringing people into the site, which is shown by the level of developer 
contributions. We are happy to be talking with them and feel their approach so far is good. We do not have any negative comments to make on it.”

The city council had attracted criticism for approving the sale of land and buildings to Artisan for £3.4m in December last year. The site had been mothballed since the collapse of developer Mountgrange in 2009.