CITY council leaders in Edinburgh are set to lead efforts to attract a new developer for the Caltongate scheme in the Old Town if business leaders behind the venture fail to get it into action.
Officials are to hold talks with administrators handling the assets of developer Mountgrange Capital to ensure the £300 million project goes ahead.
A major campaign to promote the site as one of the city's best development opportunities is exp
ected to be mounted – despite calls for the council to order a rethink over the site.
Heritage bodies and MSPs are urging the council to use the demise of Mountgrange, the developer that spent four years pursuing the scheme, to trigger a debate over the future of the gap site.
One of Scotland's leading conservation architects is demanding a review of the Caltongate site, in order to have several "terrible" planning decisions overturned.
James Simpson, vice-president of Icomos UK, an official advisory body to Unesco's world heritage committee, said the downturn gave the council the chance to "swallow its pride and take stock" over the site.
But insiders at the council say there is "no question" of reviewing the site's future, insisting it would do all it could to ensure Caltongate went ahead.
The Scotsman reported yesterday that the scheme – which would have seen the creation of a five-star hotel and conference centre, 200 homes, a commercial quarter and new public square – was brought to a halt after Bank of Scotland pulled the plug on Mountgrange.
Its directors, Martin Myers and Manish Chande, insist they are trying to raise cash to buy the assets of Caltongate back from the administrators. However, the council said it would welcome another company stepping into the breach if the directors did not revive the development and pointed out that any new operator would not need to submit new plans.
The council could become a joint partner with a developer because of its heavy involvement with the site, next to its Waverley Court HQ. The sale of plots of land key to the scheme was never completed, meaning the council will still decide the fate of the project.
One source said: "There is no doubt we're encouraging the full development of the scheme. If Mountgrange's directors cannot buy the assets back it's open to another company to take the project forward."
A spokeswoman for the council said: "Our position is that we very much want this development to happen because of its importance to the regeneration of this part of the city."
SNP MSP Shirley-Anne Somerville said: "No-one takes any pleasure out of the site remaining a black hole. I just hope there can be a rethink of what is needed for the community and the historic heart of the city."
