£200m stores scheme ‘no longer viable’ after rival wins go-ahead

The bid to breathe new life into the Castle Piccadilly district in the heart of York would transform what has long been one of the most unattractive parts of the city, the future of which has been at the centre of long-running discussions dating back nearly two decades.

But the investors behind the plans, LaSalle UK Ventures Fund, are now seeking crunch talks with senior councillors and civil servants from York Council after the Government has confirmed it will not call in the rival Monks Cross project for a public inquiry.

Graeme Chalk, an associate director from regeneration specialists, Centros, which is overseeing the Castle Piccadilly development, confirmed there are grave fears the scheme is no longer viable due to the competition from the expansion of the existing Monks Cross retail park.

He added: “The Government’s decision does at least remove any further uncertainty about Monks Cross. But that development is destined to have a major impact on trade in the city centre and, as we have previously stated, that loss of trade – which is likely to be much in excess of £50m-a-year – severely compromises our ability to deliver a viable, comprehensive, high-quality and much-needed development of the Castle Piccadilly site.

“For the future vitality of retailing in the whole city centre, the council will need to provide significant financial support to the city centre and find ways to encourage future investment. We shall now seek discussions with the council with the aim of establishing whether or not there are any viable options for the delivery of a development on the Castle Piccadilly site.”

LaSalle UK Ventures Fund stated in February that it would pull out of the Castle Piccadilly scheme if the expansion of the Monks Cross retail park was given the go-ahead. The council announced on Wednesday that the Government had written to chief executive Kersten England to confirm a decision by the authority’s planning committee in May to give the Monks Cross scheme the go-ahead would not be called in.

There are growing fears that York will lose trade to rival cities after a lack of major investment in the last three decades since the Coppergate shopping centre opened. The cabinet member for planning and sustainability, Coun Dave Merrett, has warned while turnover in the city centre is “holding its own”, it is facing increasing competition from other towns and cities including Leeds, Sheffield and Hull.

Council leader James Alexander claimed he “welcomed a further opportunity” to discuss a way forward for the Castle Piccadilly site, and added: “We have always said it is pivotal to our aspirations for the city centre, and want to do all in our powers to move it forward.

“Ensuring that we get the right development on this site is vital if we are to maintain and grow York’s existing retail offer and continue to compete with other regional shopping destinations such as Leeds and Hull.

“In terms of the impact of Monks Cross, this is not a case of either-or, we need vibrant out-of-town and city centre retail destinations to draw people to York from across the region, as well as for York residents.”

The Monks Cross development will attract showpiece retailers including John Lewis and create a sports stadium for both York City Football Club and the York City Knights rugby league team.

But it is bitterly opposed by city centre traders who claim they will lose vital trade to the out-of-town retail development.

York Council’s interim director of city and environmental services, Neil Taylor, confirmed talks will be held with both Centros and LaSalle UK Ventures Fund over the coming weeks.

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