Developer bids to resurrect derelict Royal Mile site

AN AXED development in Edinburgh city centre could be revived by a former owner of the huge site next to the capital's Waverley Station.

Ronald Persaud is said to have backing from South African investors to breathe new life into a notorious gap site just off the Royal Mile - more than two years after the collapse of the controversial Caltongate development.

Property industry insiders say talks to buy the site from a firm handling the assets of doomed developer Mountgrange are "very advanced" and would involve most elements of the scheme that triggered huge opposition before being backed by the Scottish Government.

The Lloyds Banking Group, still owed around 70 million from the firm's demise, is understood to have given its blessing to the proposed sell-off, although a deal has not yet been concluded.

Mr Persaud, former chief executive of the Cuckfield Group, was the frontman for the transformation of a former bus depot in the Old Town into a new 100m quarter, which won the approval of planners nine years ago.

However, the consortium led by the Kent-based developer pulled out of the scheme of the same name 18 months after securing planning permission amid claims it had failed to put a funding package together. Office blocks, apartments, an arts and media complex, health centre and restaurants were all envisaged for the site, next to where the city council's new headquarters was later built.

The site was later snapped up in 2004 by Mountgrange, which went back to the drawing board and produced much more ambitious plans for the area, which involved buying up several sites owned by the city council.

However, its plans to create a five-star hotel and conference centre, 200 new homes, a new culture quarter and a public square fell foul of conservationists and heritage bodies as they involved the demolition of two listed buildings, and dramatic changes to key views of the city.

World Heritage chiefs at Unesco later demanded key elements of the scheme were scaled back - after Mountgrange had plunged into administration - a move resisted by the city council to avoid another protracted planning battle.

However, the council was forced to admit defeat over attempts to find another buyer for the site last year, blaming the demands of the bank and administrator Deloitte.Any new buyer would have to strike a deal with the council to avoid submitting a fresh planning application.

One property industry source said Persaud and Co, the developer's Tonbridge-based firm, was the "clear front-runner" to buy the site, ahead of rival the Chris Stewart Group.

A source at the council said: "We are a long way off any kind of deal that would see work starting on site.

"The market has completely changed since Mountgrange won planning permission and any new scheme would need the buyer to agree a deal with the council and then go back into the planning system."

The council refused to comment last night, while a spokeswoman for administrators Deloitte said: "We are still speaking to a number of interested parties in relation to this site and this process is still ongoing. A deal has not been done."