City waives £700k Quartermile fees in affordable housing deal

The city council has agreed to waive more than 700,000 in developers' contributions as part of a deal which will allow builders at the Quartermile development to press ahead with affordable housing.

A report due to go before the council's planning committee next week outlines how developer Gladedale is seeking to re-negotiate its contributions in light of the economic downturn.

The council has agreed to forego contributions worth 712,162 for improvements to local transport, schools and the environment.

But in return Gladedale is offering an extra 2.6 million investment in affordable housing which is due to be built at Chalmers Street, next to the Quartermile site.

The move comes after reports that the redevelopment of the former Edinburgh Royal Infirmary is running five years behind schedule, with work on some areas of the site unlikely to start for another two years.

The council report says the developer has "revised the construction programme in light of changes in the property market".

It adds: "While a considerable amount of progress has been made, the developer has stated that the current economic conditions are restricting any further development on site."

Councillor Jim Lowrie, the city's planning leader, said his officials had recently gone over the developer's accounts.

He said: "It's quite a big development and I'm not sure how well their sales are going.

"Our officials looked at their books with them. Things are just slower and they are probably not going to get the money in at the same rate.

"I wouldn't say they are about to go bust. They're moving on, but at a slightly slower rate than anticipated."

The 450m development, which was designed by world renowned architect Norman Foster, first received planning permission in 2004.

So far 260 apartments have been sold and construction has now entered its fourth phase.

The developer is committed to building 170 affordable homes at nearby Chalmers Street in partnership with the city council and Hillcrest Housing Association.

But they denied that attention had now turned to affordable housing due to a slow-down on other parts of the project. A spokesman for Gladedale said: "Over the last 12 months we have worked closely with the council and Hillcrest Housing Association in relation to developing the affordable housing.

"We anticipate that the outcome of this will be a positive impact on the provision of much-needed affordable housing in the city, as well as jobs in the construction sector."