A land-grab dispute between a developer and a charity is preventing work from beginning on the £200 million mixed-use Beorma Quarter scheme on the edge of Birmingham city centre.
Ingleby, the firm behind the massive regeneration project in Digbeth, is at loggerheads with Birmingham Voluntary Service Council.
Months of negotiations have failed to result in agreement about the developers buying BVSC’s Moat Lane premises.
Other landowners including a Polish supermarket are also refusing to sell to Ingleby.
City council leaders have agreed to begin the process of compulsorily purchasing the 2.3 acre site, which backs on to Selfridges and the Bullring.
A meeting of the cabinet property sub-committee was told there appeared to be little prospect of a deal between the two parties.
Cabinet regeneration member Tim Huxtable said negotiations had reached an “intractable stage”.
Coun Huxtable (Con Bournville) added: “Given the relationship between the developer and BVSC, there is unlikely to be an agreement unless this is pushed forward.”
He believed the council would be able to “sharpen the minds” of the two sides by threatening to issue a CPO.
Cabinet finance member Coun Randal Brew (Con Northfield) said: “I am aware that there have been negotiations ongoing, but we really do need to make progress on this issue.”
Property sub-committee chairman Paul Tilsley said the developer had to be encouraged to “take all interested parties along with them” and he believed a deal with BVSC and other landowners was possible.
Coun Tilsley (Lib Dem Sheldon) added: “I expect city council officers to be fully involved and try to reach an amicable agreement on this issue.”
Ingleby is backed by Salhia Investments, a Kuwaiti investment fund and has been in the frame for more than two years to build the Beorma Quarter, consisting of a 27-storey tower block, apartments and a public square.
It will be the first regeneration project to be built since the recession saw many city centre schemes mothballed at the end of 2008.
BVSC chief executive Brian Carr admitted there were difficulties, but said he was still talking to Ingleby.
Mr Carr added: “Our negotiations with the developer have reached an impasse, but are ongoing. We are aware of the compulsory purchase order and we have formally raised this matter with Birmingham City Council.
“BVSC is a registered charity which exists to support voluntary groups in Birmingham, which in turn provide vital services for people across the city. Our priority is to protect the welfare of the people we serve and this is an important factor to be considered when looking at the public interest case for any compulsory purchase order.
“We have had verbal assurances from the council that our interests and those of our beneficiaries will be protected. We look forward to working with the council to ensure that this happens.”
Waheed Nazir, director of planning and regeneration at the council, warned in a written report to the property sub-committee that Ingleby’s failure to acquire all of the land needed for the scheme might mean the Beorma Quarter would never be built.
Mr Nazir said: “Without acquisition of the remaining interests, the development will not occur or not occur in a timely manner, leaving the site and buildings vacant and the area in an increasingly run-down condition.
“Being on the doorstep of the Bullring, the currently vacant and under used buildings not only create a poor setting for St Martin’s Church and the prime retail core, but also create a physical barrier to pedestrians, and a barrier for investment in development of sites beyond.
“The implementation of the planning approval will deliver significant regeneration benefits for Digbeth and the city centre through the proposed investment in new commercial facilities that will not only bring greater economic use back to the site itself, it will also provide a catalyst for further growth and investment into the wider Digbeth Quarter.”
The Beorma Quarter will provide 48,000 sq ms of office space, 2,400 sq ms of shops a restaurant and flats.