Plans to build a £300m shopping centre in Wolverhampton look likely to be scrapped after a report for the council found that the financial risks of investing public money in the scheme are too great.
Wolverhampton City Council had planned to purchase the site to build the Summer Row centre using a Compulsory Purchase Order, but is now set to be advised not to use public money to build the centre by Wolverhampton City Council’s cabinet, at a meeting tomorrow night.
The collapse of the plans are another blow to the retail property landscape, as the development pipeline continues to stagnate, with few new centres being scheduled to open in the coming years.
The Multi Development plans were stalled in 2008 when its main investors pulled out at the height of the credit crunch.
The council was then approached about the possibility of investing in the 600,000 sq ft development Summer Row, which it approved and set aside funds for.
However, the Council looks set to scrap the plans on the back of advice contained in the report. The council said the report “concludes there remain too many financial uncertainties and risks” in investing in Summer Row.
Councillor Peter Bilson, cabinet member for regeneration and enterprise, said: “We all wanted Summer Row to happen after years of work and planning and the council has gone right up to the wire to try and salvage the scheme before getting to this point.
“Officers have been working around the clock to try and make this work in the interests of taxpayers, but the more time has gone on the more obvious it has become that the option of investing public funds is just not viable.
“Taking this sad decision is a last resort after all other options were exhausted. Summer Row has regrettably been a victim of the credit crunch and were it not for the global collapse of money markets then I have no doubt that our vision to transform retail in this city would be well underway by now.”
Paul Sargent, managing director of Multi UK, said: “Naturally we are deeply disappointed at the council’s decision after six years working on Summer Row, but we are sympathetic with the council’s viewpoint in the current economic climate of uncertainty.”