The administrators of the collapsed £150 million scheme to transform Birmingham’s Irish Quarter have had several potential buyers come forward for the site in Digbeth.
The rubble-strewn patch of land opposite the new Digbeth Coach Station was supposed to become a mixed-use site with 658 new apartments, a four-star hotel with sky bar and a new Irish Centre, shops, restaurants and a spa.
But the Connaught Square development, a subsidiary of Irish developer Naus Group, was placed in administration by its crisis-hit backers Allied Irish Bank (AIB) earlier this year after the company failed to restructure its £24.5 million debt.
The scheme’s administrators Begbies Traynor have now applied to extend the scheme’s planning permission, which was due to run out in January 2011, as they seek to secure a buyer for the site.
“We have applied to extend the existing planning permission for the development and continue to investigate the options available in respect of the site,” the firm said.
“There is interest in the site from developers and end users and we are speaking to various parties interested in purchasing it.”
According to Companies House documents detailing the circumstances leading up its administration, Connaught Square’s banking facilities with AIB expired in July 2008 and efforts to restructure the debt after that date failed.
AIB, which was caught up in the Irish banking crisis and could soon be 90 per cent state controlled, issued a letter of demand in March this year, but the firm failed to pay its debts, precipitating the appointment of the administrators.
According to the documents, the plot of land in Digbeth – formerly the site of discount retailer International Stock – was valued at more than £31.9 million in 2008, but was then revised down to £20.7 million in April 2009.
On its collapse in June, the directors of Connaught Square gave a valuation for the site, with planning permission, of £6 million – although Begbies Traynor said this figure did not represent the administrators’ view.
Pat O’Neill, chairman of the Irish Quarter Partnership said it was a huge disappointment to Digbeth when the scheme collapsed, but remained upbeat about the future of the site.
“Obviously we all live in hope, but we are quietly confident that people will come in,” he said.
The initial plans for Connaught Square were given the green light in 2008, and would have represented a major transformation of the run-down part of Digbeth.
As well as flats and a hotel, the scheme had plans for a pedestrian boulevard providing access to two new public squares.
It was widely celebrated for its promise to bring Birmingham’s “hidden river” – the River Rea – back up to surface level in Digbeth.