£45m facelift for neglected Old Town area

• The 45m development has been 'designed to shed the area of its reputation asamagnet for casual vandalism and antisocial behaviour'

Almost six years after Edinburgh City Council decided to sell off a clutch of abandoned buildings off the Royal Mile, work to transform the bulk of them is finally due to get under way within days.

Developers believe it will become a thriving part of the city, thanks to its close proximity to the High Street, and the views the hotel will boast towards Princes Street Gardens and the New Town. It is hoped major new thoroughfares will be created by breathing new life into little-used or sealed-off closes and squares now all but hidden away from public view.

The cluster of listed buildings and squares around Advocate's Close, at the corner of Market Street and Cockburn Street, have become an eyesore, with boarded up windows, rubble and overgrown weeds.

But architects working on the 45m scheme say it has been designed to shed the area of its reputation as a magnet for "casual vandalism" and "antisocial behaviour".

A pedestrian link route will be created to link the News Steps, off the Royal Mile, with Advocate's Close, while Roxburgh's Close will be opened up for the first time in years and become home to a restaurant-caf terrace area.

A property company snapped up the site after the local authority had put it up for sale along with a number of other city centre buildings, but the firm went into administration after securing planning permission.

Now, one of the rival bidders for the site has clinched a deal with the administrators to buy the lucrative asset and has signed up a German budget hotel operator to open its first UK development there.

The Munich-based Motel One, which has more than 25 hotels in Germany and Austria, is expected to open its 208-room Edinburgh hotel on the corner of Market Street and Cockburn Street next summer or autumn.

The full development, which is expected to be complete by the end of 2013, could create about 150 jobs.

Edinburgh-based property developer Chris Stewart, who is masterminding the development, said the agreement with Motel One was key.

He said: "Getting the hotel operator on board was absolutely crucial to work starting on the project. It will kick-start the whole regeneration of this part of the Old Town, which stretches all the way from Market Street almost up to the Royal Mile."

Architects Morgan McDonnell said the apartments would "benefit from dramatic city views and offer residents the opportunity to live in buildings of unique historical character in a location of unparalled civic amenity with the capital's prime gardens, museums and shops on the doorstep".

A spokesman added: "These buildings had acquired a somewhat worn and embattled appearance, and the key idea of our masterplan was to promote a range of activities which would positively engage with the site at street level, provide occupational surveillance, discourage antisocial activity and rejuvenate the civic character of this part of the city."

Tom Buchanan, economic development leader at the council, said: "As major business centre and tourism hub, Edinburgh benefits hugely from wide-ranging hotel provision, so I'm delighted that Motel One have chosen a wonderful location in our city for their first UK hotel.

"They are a well-known top brand and will be a key part of a major development in the Old Town, and I look forward to seeing it take shape over the next three years."