The future of one of the North East’s key regeneration sites has been thrown into doubt after council bosses unexpectedly cut the developer out of the scheme.
The Clouston Group has been developing the Stephenson Quarter, behind Newcastle’s Central Station, for more than a decade, bringing around 1,000 jobs to the site with hopes that 2,000 more could be created.
But now Newcastle City Council, which owns the site, has ended its contract with Clouston, saying that the company had failed to make agreed payments to the council.
The authority is now looking for new developers to take the site forward, with the next phase of scheme including a Business incubator, luxury flats and event spaces.
Clouston, however, insists it is “uniquely positioned” to complete the Stephenson Quarter development, which is widely seen as a key site to provide high quality jobs in the city centre because of its central location and six acres of undeveloped land.
Coun Ged Bell, cabinet member for employment at Newcastle City Council, said: “Unfortunately our partnership with the Clouston Group has ceased in accordance with a long-standing contractual arrangement. Although this is disappointing, we are committed to further ensuring the success of our flagship Stephenson Quarter, which remains in the council’s hands.
“This is a prime area of land with high quality office accommodation, hotel and leisure development and employment opportunities to create a modern urban environment in the heart of the city centre.
“Since its development, as well as the significant numbers of construction jobs this has created, we have seen 900 jobs brought into the city through the occupation of the Rocket Offices with a further 100 jobs through the hotel and we are committed to creating more jobs as the development continues to grow.
“The city council will be seeking new opportunities with developers who can meet our aspirations for this key site and bring forward viable developments and further build on the success of the Stephenson Quarter.”
Clouston, which had previously developed the Silverlink Business park and the Trinity Gardens scheme behind Newcastle’s Quayside, bought the Stephenson Quarter from a church charity in 2004.
But the site was taken over by the council when Clouston needed assistance during the financial crash, with a deal put in place for the firm to buy back parts of the site in various stages when key developments were completed and payments were made to the council.
Clouston successfully completed the first phase of the project with the building of the Rocket office building, a Crowne Plaza hotel, a multi-storey carpark and the Boiler Shop events space.
The second phase, the creation of the North East Futures UTC, is on track for September, but the final part of the scheme – which includes plans for the site currently occupied by the Post Office – is now uncertain.
The council says it has a “project team” to take forward the development and is actively looking for new developers to take on the site.
But Clouston insists it has not given up on the scheme and hopes to convince the council to re-consider its involvement.
A spokesman for the company said: “Clouston Group remains engaged in positive negotiations with Newcastle City Council and is fully committed to delivering the remaining parts of their £200m Stephenson Quarter scheme, one of Europe’s leading mixed-use developments, creating up to 3,000 jobs and contributing around £100m a year to the regional economy.
“It’s disappointing that a final settlement on a revised draw-down agreement with the city was not agreed last week, but milestones have been achieved and our proposals are sufficiently advanced that we remain uniquely positioned to deliver the remainder of Stephenson Quarter.
“This bold scheme will benefit the city financially while also creating a very special, inclusive environment combining hospitality, the arts, education and Business in a dynamic, and exceptional, green public realm.
“We remain committed to supporting the completion of the UTC, which opens in September, and developing Stephenson Square and the Meteor office, where we have strong enquiries from substantial media, tech and professional Businesses keen to relocate and become tenants.”
Clouston Group’s accounts revealed in January that the firm had had to get further funding from the council as finance for the scheme became harder to access.
Source : Chroniclelive