Site's price tag 'unrealistic'

A SENIOR councillor has criticised the administrator that has control of the Caltongate site for demanding an "unrealistic" price from companies who want to take development forward.

Deloitte took control of the Caltongate site nearly 18 months ago after London-based developer Mountgrange plunged into administration, scuppering its 300 million vision for the gap site.

And Councillor Tom Buchanan, the city's economic development leader, today said he was concerned that it has taken "ages" for Deloitte to sell on the site.

He also hit out at the amount of money Deloitte is demanding for the site, which was to become a new commercial hub for the city featuring a hotel, shops, offices and homes.

Cllr Buchanan said: "I am very concerned that the administrator is taking ages on the Caltongate site. They are wishing for unrealistic sums. This city requires a well-balanced and well-funded range of development companies across the city. It is not helpful when short-term solutions go ahead of longer-term assistance."

His comments came after he lodged a council motion criticising the Lloyds Banking Group for sending another major property developer, Elphinstone Group, into administration and calling for the UK Government to do something to prevent banks such as Lloyds sending firms into administration.

After Mountgrange fell into administration in March 2009, the Evening News revealed that Bank of Scotland, which was the company's main creditor, had ordered Deloitte to wait until the market improved before pushing for a sale. Allied London had emerged at one stage as the favourite to buy the site, but it is thought to have been put off by the amount of red tape involved.

And the city council decided in August to withdraw assets that it had provisionally agreed to sell to Mountgrange from the development site. It is now drawing up a masterplan for its properties that were part of the site, which includes the Canongate Venture building, a former garage on Cranston Street and the East Market Street arches.

Charles Guest, a partner at property firm Ryden, said: "We know major property companies are looking at it (Caltongate] and we have clients that are prepared to bid."

There is understood to be growing anger within the property sector about the number of administrators that are holding on to land and not selling it on to developers.

One industry source said: "There are properties that are not openly marketed and I've heard stories of people being asked to put in offers at a certain level, then the administrator says it is not enough. A number are questioning the way these things are handled."

John Reid, partner of reorganisation services at Deloitte in Scotland, said: "We are in negotiations with an interested party and price is not an issue at this stage."