St James developers picture a new cinema at heart of £850m overhaul

A MULTI-purpose cinema and events space is to be added to the massive plans for the transformation of the St James Centre.

Developers behind the 850 million plan to create the new "St James Quarter" say they have dropped plans for a major office development on the site because of market conditions.

Instead, they propose to build a facility that can be used as a "boutique cinema", conference centre or festival venue. Despite it being just a stone's throw from the Vue cinema in the Omni Centre, they insist it would not be in competition.

It is hoped that the fully-digital venue would even be able to broadcast live sport in 3D, expected to become a major trend in the coming years.

Details of the new proposal came as developer Henderson Global Investors (HGI) prepares to submit detailed plans for its 13-acre scheme by the end of this year.

Discussions are continuing on whether to have one or more hotels on the site, and how many apartments will be built. Up to 90 shops are also expected in the ambitious scheme, still due to be completed in spring 2016. The centre will face a four-year closure after following the 2012 January sales.

The original outline planning application included around 15,000 square feet of office space on the site but that has now been dropped from the proposals.

Martin Perry, development manager at HGI, said: "Offices have been ruled out, we do not believe the market is there.

"We are looking at a media facility – a small multiplex cinema – that can also be a conference venue, festival venue or show things like a 3D Six Nations rugby match. We want it to be a fully-digital facility, which is something that Edinburgh doesn't have."

It also emerged today that HGI has agreed with the city council to force through the purchase of some leases using compulsory purchase orders (CPOs).

Around 60 per cent of firms on the development site will see leases expire before work starts in 2012 , or have a "break clause" in their leases that means they will have to move out without compensation.

John Lewis is expected to be the only store that will stay open during the revamp.

However, about another 40 have a "legal interest" that still needs to be resolved. Resolutions can include compensation or HGI funding a temporary or permanent relocation.

The "eyesore" St Andrew's House office block is expected to be taken down next year in what will be the first visible sign of development. However, the building will be dismantled rather than demolished, meaning the St James Centre will not have to close to allow work to take place.

Among the deals on the brink of being finalised is an agreement by HGI to fund the replacement of an existing substation owned by ScottishPower on the site.

Mike Prentice, executive director of retail at property firm CB Richard Ellis, said there is already "significant" interest in the St James Quarter.

He added: "If you think about the recent history of Edinburgh, there have been a number of schemes that have not come to fruition, like at Waverley, or underground malls. So the market is definitely waiting for something to happen."