Edinburgh council has withdrawn its assets from the controversial Caltongate development site scuppering plans to revive the £300m scheme.
Lloyds Banking Group and administrator Deloitte had been trying to sell the site – which includes a number of plots owned by the council – and had selected Allied London as the preferred developer.
However, the local authority has now withdrawn its portion of the land – around 20% – from the sale because it said the consented £300m development would not be built by a new purchaser.
Councillor Tom Buchanan, Convener for Economic Development, said: “The Council has worked for some time with the bank’s administrator in order to assist it in realising the potential of the site, but it is now apparent that the proposed development will not go ahead.”
“As a result, we feel it is in the Council’s best interest to draw a line under this matter and exercise our right to formally terminate the sale agreement.”
He added: “Nevertheless, our ambitions for the area remain undiminished. We continue to believe that Caltongate presents a wonderful opportunity as an investment prospect and that it will improve our historic Old Town. We will therefore continue to work with potential investors to promote the site to developers.”
A new buyer could still potentially purchaser the land separately from Lloyds and the council and use the original consent for 185,000 sq ft of offices, 200 flats and a 205-bed Sofitel hotel.
The project’s developer, Mountgrange Capital, went into administration in May 2009 after winning planning approval for the project.
bridget.oconnell@estatesgazette.com
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