Market Halls was planning to open a plush new venue – featuring several restaurants and bars in the same space – at Stonebow House.
It was to be the brand’s first venture outside London – where it has already opened branches in Fulham, Victoria and the West End.
But the company has now pulled out of the scheme because it wants to focus on its businesses in the capital.
A spokesman for Market Halls said: “Market Halls will be focussing on London for the next year and have decided not to pursue an opening in York.”
The company was granted a licence for the scheme by City of York Council following an eight-hour meeting in December 2018, despite almost 80 objections to the plans.
Welcome to Yorkshire to hold first board meeting of new era behind closed doorsMan arrested for attempted murder after six pedestrians hit by Audi in West YorkshireBut the site has laid empty ever since with no information about when work could begin – despite requests from The Press for an update.
Market Halls said it hoped to showcase nine of the “very best up-and-coming local chefs and restaurateurs” in a document prepared for the licensing hearing.
The plans also attracted support from Make It York, York BID and 20 independent business owners and residents.
A letter from Make It York in support of the licensing application said: “Following years of decline it is good to see Stonebow House being developed and brought back into commercial use.
“We believe the proposals will support the thriving food scene in the city, championing local independent restaurants and chefs.”
There were plans for space for 350 diners on the ground floor and 200 in the basement, with outdoor seating on Whip-Ma-Whop-Ma-Gate.
A statement said developers chose Stonebow House because of its size and location near Fossgate and Shambles.
Some residents objected to the licensing application – with concerns over drunkenness, rowdy stag and hen parties and drug dealing.
Why love is at the heart of Christmas – Bishop of LeedsWelcome to Sicklinghall - where the 17th century pub doubles as a pop-up post officeBut after the meeting David Laycock, regional developer for Try Market Halls, said the move would be “great news for York” and “breathe new life into this former eyesore”.
Speaking last year he said: “This will be a new social city hub where both locals and visitors of all ages can eat, meet, experience amazing food and plan their time to get the most out of their visit to the city.
“We listened carefully to the understandable concerns of nearby residents who clearly had a very bad experience from previous tenants operating a night club with licensing until 4am. We have taken on board their feedback and have a very different style of business.
“This will be an asset to revitalising this part of York and I believe it will be enjoyed just as much by residents as it will by visitors.”
Thirteen luxury flats and high-end gym and cafe Supersonic Fitness have opened in the building in the past few years.
There was no information about what will happen to the building.
It was formerly home to Fibbers nightclub, the Job Centre and a branch of Heron Foods.