Key shopping streets in Newcastle are to remain undeveloped leaving rival cities to flourish.
A £10m investment plan has again been pushed back, taking with it the hopes of thousands of new jobs.
The East Pilgrim Street project in the city centre has again stalled after developers got as far as flattening the former Bank of England building.
Since then the multi-billionaire Reuben Brothers, who own much of the land, have not moved on with the scheme, despite the council making £3m available to pay for demolition work.
Another £7m should have gone on purchasing land around the site, such as the old Odeon cinema and nearby car park.
Newcastle City Council’s Cabinet was told the authority had to hold back £10m “due to a lack of engagement from land owners in the area resulting in planned activity in the current year not taking place.”
But after more than seven years of planning, the delay means cities such as Leeds and Manchester continue to expand their shopping centres while Newcastle stalls.
Former council leader David Faulkner said the original vision was to have one million sq ft of shopping floor space, extending from Northumberland Street southwards. At various times Harvey Nichols and Selfridges were touted as potential occupiers. It was expected to bring 3,000 jobs and getting on for a billion pounds of investment.
But the leading Liberal Democrat said as it stands “the block is a real eyesore,” and admits even the original developer, Multiplex, might have been a bad idea.
He said: “They were overstretched, lost a bomb on Wembley Stadium and pulled back on lots of projects elsewhere. But not before they had secured the entire block bordered by Pilgrim Street, Market Street, John Dobson Street and New Bridge Street West, including the old Odeon Cinema, Commercial Union House, former fire station on Pilgrim Street and Carliol House on Market Street.”
He added that it has been 18 months since the council signed a City Deal with Government which paved the way for the investment, but that there was little evidence of any hurry from the council.
City Treasurer Paul Woods said East Pilgrim Street was due to be improved after the Stephenson Quarter and Science Central sites.
“We continue to talk to partners, to property buyers and to look at this project.
“The money here has nothing to do with jobs, they are still to come.
“The next big bit is for demolitions. We have £3m and that allows us to have more fruitful conversations with the Reubens.
“It is a very big site. The Reubens own a small part of that, and now we have to look at the car park, the Odeon and other buildings at the top end. If we can buy up those buildings we can have better conversations about developing the site, obviously with a view to getting our money back later.”
David and Simon Reuben, through their Aldersgate company, are now the sole owners of more than one million sq ft of commercial space in East Pilgrim Street area after buying the 50% stake of Brookfield, the Canadian-based company that had controlled the site.
The two companies had previously been joint venture partners.
The East Pilgrim Street area covers a 40-acre site between Saville Row, off Northumberland Street, the Central motorway and Swan House roundabout.
Seven years ago it looked like an £800m redevelopment of the site was set to begin. However, the credit crunch and subsequent recession saw the plans put on ice.
East Pilgrim Street may have stalled but this year has seen progress made on four other major sites in Newcastle and Gateshead.
Work is now progressing swiftly at the Stephenson Quarter behind the Central Station in Newcastle.
A digital impression of the site, above, offers the first glimpse of how the new £200m development will look.
The 10-acre site is undergoing a massive transformation, which will include new commercial, hotel, residential and retail facilities.
Phase one of the development is under way and will see the creation of a 251-bed, four-star Crowne
Plaza Hotel and conference centre,
as well as a combined 357-space
multi-storey car park and 35,000 sq. ft. of Grade A office space.
It was thought around 2,200 jobs would be created through the project.
Meanwhile, work continues on the Central Station itself, with the environs and approach to one of the city’s finest buildings being improved.
The Science Central development in Newcastle has also been kick-started, with the first building due to open next autumn.
Over the river in Gateshead the redevelopment of Trinity Square is far advanced and has already created or protected 1,500 jobs.
It’s reckoned that the completed development will contribute £10m to the local economy in wages alone.