Fresh hopes for Caltongate deal

Published on Saturday 28 March 2009 10:26

A DEAL could be struck to start development on the massive Caltongate site "within weeks", it has emerged today.

The Evening News can reveal that talks are taking place that would see the scheme split into separate developments by different companies under the existing overall masterplan.

Sources close to the talks say there is a growing acceptance that development on the site may have to involve several firms.

It is thought that, while some parts of the masterplan would be unlikely to progress in the current market – such as the proposed five-storey office block – other parts could go ahead now.

Hotel giant Accor was already lined up to occupy the proposed five-star 205-room hotel under its Sofitel brand.

It is expected that will mean the hotel aspect would be among the first to be developed.

John Reid, joint administrator at Mountgrange Capital administrator Deloitte, which is now responsible for disposing of the site, said:

"We can't just sit on our hands and wait for the market to improve. We actually have to go ahead and come to decisions and get that moving sooner rather than later – that is probably a matter of weeks."

He added: "A lot of existing stakeholders have got considerable investment so, rather than selling at what might be a bargain basement price, there is the other option of going into partnership with various players rather than just working out the site."

When asked whether that meant that the site could be split and operated by different firms, he said: "We are currently going through an appraisal of the site and of the properties we have and that is an ongoing analysis."

It is understood that former Mountgrange Capital directors Martin Myers and Manish Chande are among those in talks about how to work with others to get the scheme moving.

They have potential funding available to them through a cash-rich fund run by Mountgrange Investment Management, a separate and independent company from Mountgrange Capital.

If the site was split, development could start quicker.

"While all options have to be looked at and considered, I would suspect it is most likely that a development in a form somewhat similar or akin to what was originally envisaged would be the most likely outcome," said Mr Reid.

Graham Birse, deputy chief executive of the Edinburgh Chamber of Commerce, said: "The original development is still valid and we'd like to see it delivered."