A RESCUE deal has been clinched over one of Edinburgh’s most notorious gap sites to revive a development hoped to deliver around 3500 jobs for the capital.
The £10.5 million bail-out of the project, earmarked for a former goods yard next to Haymarket railway station, is expected to see get underway within the next few months, creating a brand new business district in the west end.
The £200 million scheme - significantly scaled back from previous proposals for the site - will see the creation of new shops, office blocks, cafes, bars and restaurants, as well as 165 “serviced apartments.”
Taken over by construction giant Interserve, it will be the biggest commercial development to get underway in Edinburgh since the recession and a major boom for the city’s economy. The site, used for years as a makeshift car park, was once touted as a potential home for the Scottish Parliament.
It is thought the impending start of the city’s tram project, which includes a stop at Haymarket, has been a key factor in the deal getting the green light. Tenants already signed up include Tesco, Pret A Manger and Prezzo, as well as apart-hotel operator Staycity.
Irish developer Tiger paid more than £40 million for the site from Edinburgh City Council at the height of the property boom and had planned to create a five-star hotel and office development, within close proximity of the city’s main business district and the Edinburgh International Conference Centre.
However the controversial designs, by leading Edinburgh architect Richard Murphy, for a 17-storey tower for the Intercontinental hotel, triggered huge protests amid fears the development would ruin the city’s skyline and be visible across Edinburgh.
Despite winning the backing of city councillors, the project was called in during a visit to the capital by inspectors from international heritage body Unesco and later rejected by ministers over its feared impact on the surrounding landscape. Former judge Lord McCluskey had been one of the most vocal opponents.
The Irish developers were forced to return to the drawing board and their revised plans, approved more than two years ago, only reached a maximum of seven storeys.
However the scheme has been badly stalled by the economic downturn and the new owners, Interserve, have had to strike a deal with NAMA, the agency which was set up by the Irish government in the wake of the downturn to acquire property development loans from Irish banks.
Interserve and Tiger will now be pursuing a joint venture together for a site which has lain empty for more than 45 years. In a joint statement, the two firms said the fact the new tram system would run adjacent to their site would help cement the location as one of the city’s principle business and transport hubs.
Adrian Ringrose, chief executive of Interserve, said: “Edinburgh’s Haymarket site remains one of the best city centre development schemes to be found anywhere in the UK.
“It will provide a strategic gateway for the city centre, linking seamlessly with one of Scotland’s busiest railway stations as well as being adjacent to the city’s new tram network.
“The proposals for a mix of leisure, retail and office space, linked by open public spaces, will act as a catalyst to regenerate the commercial heart of the area as well as create jobs.
“Our involvement and financial commitment to this project underlines Interserve’s ability in creating value by structuring asset-based funding in combination with the design and delivery of large scale projects.”
Simon Fox, development director with Tiger, said:“Throughout the planning process we have worked hard to develop our proposals in line with the needs of the city and the local community.
“Our team has devoted a significant amount of time and energy so far in designing a scheme which now represents the best solution for this challenging site. So far we have received significant commercial interest in the site from a wide range of UK operators, on top of the existing tenants already signed up.
“We are now looking forward to working closely with our development partners Interserve to finally give the Haymarket area the high quality of mixed-use development which it so richly deserves.”
Chris Dougray, director of Lambert Smith Hampton, agents for Interserve, said: “The Haymarket is a very exciting development opportunity- not only for the partners involved but for the city as a whole.”
Ian Perry, planning leader at Edinburgh City Council, said: “This is a real sign that the city’s economy is moving forward, that a developer is willing to invest such a large sum of money in a site that has been laying dormant for a long number of years.
“It reflects the growing confidence in the development sector at the moment. It may be significant that the tram is nearing completion.”