St James plans placed on hold ‘indefinitely’

The £850 million project to knock down the shopping centre and former Scottish Office buildings was due to see demolition on parts of the site start this year.

The shopping centre was expected to close next year for work to begin, and was due to be completed by 2015.

But today it is reported that work has been postponed indefinitely. The completion date is now 2018 at the earliest.

The St James Quarter was due to include a complex of around 90 shops, a five-star hotel, office blocks and dozens of homes.

It is now understood that the hotel plans have been dropped, along with many of the homes, although there are still 125 flats planned for the site.

The scheme was given approval three years ago, but city planners are still waiting to receive detailed plans from site owner Henderson Global Investors.

The council insisted that the London-based firm was still committed to the project, but would only say it was expected to move forward “over the next five years”.

It is thought the development’s progress has stalled because of complex negotiations between the developer, the council and existing tenants at the centre. It has also been hit by the downturn in the property market and delays to the tram project.

As the News reported in November, negotiations were reportedly complicated when it was discovered that Thistle Hotels, operator of the King James Hotel, had a clause in its lease that guaranteed its existing location.

There is unlikely to be any demolition on the site until detailed approval for the scheme is granted.

A property industry source said the situation had changed since initial permission was given for the project. They said: “The whole climate for property development has changed dramatically and many elements of the original scheme are simply no longer viable.”

A council insider added: “The issues affecting Henderson are the same that have affected a host of other sites in the city, including Caltongate and Haymarket.

“The frustration is that even if new plans are submitted tomorrow, they will take more than a year to get through the planning process.”

A council spokesman said: “Henderson remain committed to the redevelopment of the St James Centre and will be taking this project forward over the next five years.”

Martin Perry, development director at HGI, the frontman for the project, could not be contacted for comment.