Experts predict hole in the heart of Edinburgh will remain 'indefinitely'
THE fate of a huge gap site in the heart of Edinburgh is set to remain undecided for the foreseeable future, The Scotsman can reveal.
A takeover of the home of the Caltongate development in the city's Old Town is unlikely to be confirmed until well into next year, with experts predicting that a planned sale is set to be shelved indefinitely until the property market recovers.
Administrators handling the assets of collapsed developer Mountgrange, which spent four years pursuing the development, have failed to find a buyer, despite hopes a deal would be struck well before now.
Property experts have questioned the lack of progress over the site, pointing out that it has never been properly marketed by Deloitte, unlike other major schemes which have been put up for sale in recent months.
It is thought Edinburgh City Council, which owns about a quarter of the land involved in the previous development, has yet to be approached about any future schemes, despite administrator Deloitte insisting it had already drawn up a shortlist of potential buyers. It is not known if any of them have drawn up fresh plans for the site. Although final approval was secured by Mountgrange for a five-star hotel, conference centre, office blocks, a public square and restaurants, the council would have to strike deals with any developer or developers who snaps up land previously owned by the firm.
The local authority is also keen to work with a single developer over the future of the huge site, next to Waverley Station and the council's own headquarters.
But insiders insist it is likely that any sales will now take at least another 12 months to come to fruition, despite Deloitte declaring earlier this year that it hoped to decide the fate of the site by September.
Mountgrange went into administration in March, blaming the withdrawal of backing by banking giant HBOS, which was owed 70 million when the administrator was called in.
The firm spent more than 5m pursuing its scheme, which was opposed by heritage bodies and local campaigners.
One property industry insider said: "It's very strange the way this has been handled. If the bank is trying to recoup as much of its money as possible you'd think it would have been taken to the market long before now."
Stewart Taylor, director at agents CB Richard Ellis, said: "It is still a challenging time and it is very difficult for a scheme to be shown to be viable. There are only a small number of developers who are able to take forward schemes in the current climate."
Tom Buchanan, the council's economic development leader, said: "We are still confident that the Caltongate site and its existing planning consents remain attractive to the market. Once the administrator makes a final recommendation to the bank, we look forward to engaging with the successful bidder on the future of the site."
John Reid, a partner at Deloitte, said: "Following a first stage bidding process, we're currently awaiting a second round of detailed proposals from the successful candidates regarding potential use of the Caltongate site. However, we do not anticipate any transactions going ahead until early 2010."
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