CITY leaders hope a negotiated settlement can be achieved to lift a legal threat to the massive St James redevelopment.
An investment company which owns the ground lease for the John Lewis store has gone to the Court of Session to challenge the decision of an inquiry to give the go-ahead for a compulsory puchase order to allow the £850 million project to proceed.
Grosse Investments, a Jersey-registered company, were the only objectors to the CPO who maintained their objection when others – including one from John Lewis – were withdrawn. Now the company is appealing against the inquiry outcome.
The current shopping centre and neighbouring office block will be demolished to make way for a new shopping complex, cinema and restaurants. A controversial 210-bedroom five-star hotel, the design of which has been compared to a walnut whip, is at the centre of the scheme. Some 143 homes, mostly one and two-bed flats, are also included in the development which is due to be completed by 2020.
The developers behind the project, TH Real Estate (THRE), are understood to have offered to buy the ground lease for £17 million, which is understood to be higher than the valuation reached by the CPO inquiry.
THRE’s offer is said to be still on the table and senior councillors, who back the development, are hopeful that a deal can be negotiated.
Lawyers acting for Grosse Investments have said the company is not seeking to block progress on the development, but it wants to protect its lease, which is understood to be worth about £600,000 a year.
A council source said: “This challenge is not unexpected – everyone is anxious to protect their own position. Negotiations are still going on between Grosse Investments and THRE.
“The ideal situation would be that agreement would be reached and the challenge is dropped.”
It is understood Grosse Investments bought the ground lease from the council in 2002.
Martin Perry, director of development at TH Real Estate, said: “These arguments were dealt with very thoroughly during the inquiry, and we are absolutely confident that Grosse’s challenge has no validity in law.”
Gavin Barrie, leader of the city council’s economy committee, said: “The council remains committed to this landmark new development for Edinburgh.”