City of York Council leaders will next week discuss committing £900,000 of its capital funding to make sure it "has the resources and retains the existing staff expertise to continue with its input to the development" of the York Central site.
The development at one of the largest brownfield sites in the North will deliver up to 2,500 new homes, 6,500 jobs, the transformation of the National Railway Museum and an improved railway station.
Some £155m of funding has been secured for the project next to the centre of the historic city and work has begun on the infrastructure to unlock the site, which the Government says will host civil service jobs in the future.
It was originally expected that the council, which is now run by a Liberal Democrat-Green coalition, would take the lead infrastructure delivery role on behalf of the York Central Partnership made up of organisations including Homes England.
But there has since been a review of arrangements after the Ministry of Housing, Communities and Local Government allocated the enabling infrastructure grant funding directly to Homes England and other landowners. City of York Council (CYC) only owns five per cent of the land.
A report to go before the council's executive next week says: "There is now no inherent logic in the previous proposal for CYC to deliver the infrastructure as CYC are not now the recipient of the grant moneys.
"If CYC were to continue to deliver the infrastructure whilst not in receipt of the funding, the contractual arrangements between CYC and landowners would be extremely complex and would incur significant construction liability and exposure to cost over-run risk for CYC.
"The landowning partners are also of the view that the simplest delivery route would deliver greatest certainty of keeping to budget and time."
The change means Homes England, the body which funds new affordable housing in England. taking on the delivery of the bridges, footways, cycleways, roads and other infrastructure to open up the site. The council will also receive £3.86m from the government grant to cover the costs incurred advancing the infrastructure project.
But the report says the authority will "still have an important and influential role to play within the York Central Partnership as well as through the roles of Statutory Planning and Highways Authorities".
Nigel Ayre, the council's executive member for Finance and Performance, said: “It has taken strong public sector leadership to turn York Central’s potential into a reality.
“This project has been discussed in the city for many years and we are now at its furthest point of development, with recent announcements proving the Executive were right to invest in this essential regenerative project.
“The £5m invested to date has ensured over £112m of external funding has been achieved to unlock this site and benefit our city. We are now seeing almost £4m returned to the council from Homes England to cover those upfront costs.
“Thanks to extensive public engagement, we’ve shaped a masterplan which gives York the homes, 21st Century jobs and cultural spaces the city needs. As we move into the delivery phase, the responsibility and risk now transfers to our partners.
"However, we are ensuring that the right arrangements are in place to deliver this scheme as quickly and effectively as possible.”