Caltongate collapse cost city £110,000 in lost rent

Published on Monday 28 November 2011 12:13

The collapse of the Caltongate development has cost the city council more than £110,000 in lost rent, it emerged today.

Nine council-owned flats on the Royal Mile have been lying empty since November 2006 when occupants of the flats were rehoused to allow for the demolition of the building.

The one-bedroom flats would have brought in £110,176 but still lie empty and have now been vandalised. Concerns have been raised about the cost to the council of the flats sitting unused – and about missing a chance to provide short-term social housing.

Demolition of the flats was put on hold due to the collapse of developer Mountgrange in 2009, scuppering its site plans, which included hundreds of homes, offices, a hotel and conference centre, shops and cafes.

Councillor Cammy Day, housing spokesman for the Labour group on the city council, said: “It is a lot of money to lose and £110,000 could have been invested in repairs to people’s homes or even building new ones. It is also a shame ‘clean’ properties are sitting empty for five or six years while people can’t get houses, even though there is no real plan for what to do with that site.

“We have got such a shortage of housing in the city yet, for five years, we have had empty houses. I accept there was a plan for them at first but that is not now going ahead and even if it was for temporary accommodation then at least they could be used for something.”

Mountgrange bought the privately owned flats in the tenements facing demolition but the council still owns nine.

Council chiefs had agreed a deal to sell all the property it owns, including the flats, the C-listed Canongate Venture building and a series of archways on Market Street, but withdrew the assets amid concern about the amount of time it was taking Mountgrange administrator Deloitte to agree a sale.

It is now understood that Ronald Persaud, who was a director of the joint venture firm that announced £100 million plans for the New Street site in 2001, is heading a consortium of South African investors that is closing in on a deal to buy the site.

The council would then be expected to strike a separate deal for the property it owns.

City economic development leader Councillor Tom Buchanan said: “It is disappointing that we are not able to make revenue from rental property on the High Street but we have been working with the administrator to make sure a new owner takes over Caltongate and develops the site. There is a developer that is close to going public on a deal.”

Councillor Paul Edie, the city’s housing leader, said: “The accommodation is not fit-for-purpose. It is damp, and we could not house people there.”

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pandapirate

Tuesday, November 29, 2011 at 01:17 AM

the council houses werent damp when residents were put out by the current administration once they approved Mountgranges scheme in 2008 It is 6 years ago when, despite many having been improved with new heating and secondary glazing, the then Labour administration agreed a dodgy land deal to sell common good land and council houses to Mountgrange! No surprises when local councillors and planning leader Trev the finger who all enjoyed some great hospitality and donations from the developers went on to approve the masterplan required by the deal. Do these fools never learn......Caltongate was a sick joke and the bubbles well and truly burst!

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Artisan

Monday, November 28, 2011 at 11:23 PM

They lay empty in order that Mountgrange could take them over with vacant possession; it wasn't the Council's fault that this was continually delayed until Mountgrange collapsed. Subsequently there was a disastrous flood - reported in the Evening News, although focusing mostly on the ice cream shop on the ground floor. After that they were in no condition to be occupied.

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JumboLumbo

Monday, November 28, 2011 at 05:21 PM

At least it's within the housing revenue account, which must, by law, be self-supporting via rents raised. Only rentpayers should lose out here. It's good to see the highly paid experts (over £120k plus pension benefits) have the skills, abilities and experience to run housing in such a professional way ...

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Logie88

Monday, November 28, 2011 at 01:22 PM

Paul Edie is talking rubbish. These were amongst the most highly sought after flats in the city. If they are damp, it is only because they have been neglected for the last five years.

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americanbob

Monday, November 28, 2011 at 01:02 PM

#2 S&D. If the tenants were receiving benefits this would have been paid to the CEC from Central Government funds, so the council HAS lost money!

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searchanddestroy

Monday, November 28, 2011 at 12:35 PM

"Nine council-owned flats on the Royal Mile have been lying empty since November 2006 when occupants of the flats were rehoused to allow for the demolition of the building. How does that equate to 110k? The chances are that the people who were living in these flats would have recieved council tax benefit and therefore no real money is lost ? Total non story.

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Afredo Garcia

Monday, November 28, 2011 at 12:27 PM

The council were warned about this before the Mountgrange collapse and whatever happened to the £150k that was supposed to be for landscaping? Can the 'News remind us what happened to the people and organisations evicted from these premises?.

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