Edinburgh Council pulls out of Caltongate development

The City of Edinburgh Council has announced that it is withdrawing its assets from the proposed £300million Caltongate development.

The faltering plans were put on hold in March last year when the developer behind it, Mountgrange, went into administration after Lloyds Banking Group withdrew its financial support.

Edinburgh Council had agreed to sell plots of council land to support the development. But after negotiations by Lloyds, which now owns to site, to find a new developer proved unsuccessful, the local authority has decided to cancel the arrangement.

Councillor Tom Buchanan, Convener for Economic Development, said: "The Council has worked for some time with the bank’s administrator in order to assist it in realising the potential of the site, but it is now apparent that the proposed development will not go ahead.

"As a result, we feel it is in the Council’s best interest to draw a line under this matter and exercise our right to formally terminate the sale agreement.

"Nevertheless, our ambitions for the area remain undiminished. We continue to believe that Caltongate presents a wonderful opportunity as an investment prospect and that it will improve our historic Old Town. We will therefore continue to work with potential investors to promote the site to developers."

The scheme would have seen a five-star hotel, conference centre and 200 new homes built beside the city’s Royal Mile.