Ghost town fears start to haunt St James plan

The existing centre, which holds more than 50 shops, will shut for four years following the 2012 January sales to allow for the creation of the new "St James Quarter".

Bosses at developer Henderson Global Investors have admitted that they do not expect many businesses to take up their offer of temporary relocation and say the city centre could lose shoppers to out-of-town centres.

Opposition councillors today said the council and Essential Edinburgh now need to offer incentives to keep firms in the city centre.

Councillor Jason Rust, economic development spokesman for the Conservative group on the city council, said: "This seems to be a fair proportion of Edinburgh's retail sector which will simply be out of action and is extremely worrying news.

"There are already obvious concerns regarding ongoing projects in the city centre and I am very concerned that, unless a proper strategy is in place, we could see a ghost town for years in the east end of the city.

"It is not simply other cities that Edinburgh is competing against, but out-of-town centres as well. And once business is lost it will be twice as hard to bring it back."

He called for an action plan to be drawn up to ensure that there are "adequate incentives" for businesses to remain in the city.

HGI has around 100 legal agreements to resolve before it can start work on the new development.

Around two thirds of the issues are expected to be resolved naturally by lease expiry or because the shops have "development break clauses" in their contracts that mean their lease will be terminated without compensation. None of these firms will be offered relocation options – meaning they could be lost to the city.

And Martin Perry, development director at HGI, admitted many of the remainder of stores may not want to relocate.

He said: "I would be surprised if we get that many that want a temporary relocation, although some might want a permanent relocation.

"While redevelopment is happening, I expect the rest of the city to continue to do well. People still have to shop, although the city centre may lose people to Fort Kinnaird, the Gyle or elsewhere."

Councillor Tom Buchanan, the city's economic development leader, said: "I am confident that, when delivered, the development will bring huge benefits to the city and will transform the retail landscape.

"In the short term there will of course be a decrease in the actual number of retail units available. However, as many of the brands are represented elsewhere in the city centre, and with John Lewis staying open throughout, the impact should be relatively slight."

Tom Campbell, chief executive of Essential Edinburgh, said: "Where developments have a potentially negative effect on existing trade we work hard to mitigate these effects. We will collaborate with all partners to stimulate opportunities to remind people that Edinburgh is a dynamic and vibrant city."

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