Nanjing, the Chinese car maker that bought the assets of MG Rover last year, and now looking to use part of the Longbridge site, has asked for and been granted a sixmonth lease for 105 acres of the site because it needs more time to work on its business plan.
The present lease under which the administrative receiver of MG Rover has been paying the owner, St Modwen Properties, £5 million a year for the entire site ends next Wednesday and will not be renewed. Nanjing has been negotiating for a 32-year lease for the "Q Gate" area at a rent of about £2 million a year. But it became clear recently that the talks could not be concluded before the present lease expires.
St Modwen's chairman Anthony Glossop said yesterday: "At the moment we see no reason not to be hopeful that there's a long-term future for Nanjing at Longbridge."
Nanjing has said it wants to restart production of MG sports cars on the central part of the Long-bridge site.
The remainder, including more than 200 acres of land that could be developed, would then revert to St Modwen for a £500 million project including a retail centre, offices, a technology park and several hundred homes.
This would effectively be on two sites, one in Bromsgrove and one in Birmingham, with Nanjing's works in the middle.
St Modwen, though, has agreed with Birmingham and Bromsgrove planners, that it should be developed as a single project.
"They want to see it as a regeneration of the suburb of Long-bridge," Bill Oliver, St Modwen's chief executive, said.
"We have produced a plan which will generate 10,000 jobs. We are going to be there for ten to 15 years. But 10,000 jobs don't need 300 developed acres. So there is space for a residential development as well as offices."
Asked if it would not be a more attractive project without the Nanjing works separating the two halves of the site, Mr Oliver said: "I couldn't possibly comment."
St Modwen's position is that it is in favour of anything that can be done to bring car production back to Longbridge.
Mr Oliver insisted that the £2 million a year Nanjing is being asked to pay for a long-term lease is not excessive. "We are giving them a sub-market deal," he said.
"The disappointment is how long it takes. We have to go through the same planning process as everyone else."
In the meantime St Modwen is keen to replace at least some of the income it will lose when the present lease expires next week.
"We will get our hands on the rest of the site (apart from the central area which Nanjing at present occupies under licence)," Mr Oliver said. "We will try to get some short-term income pending development."
Nanjing's intentions have never been entirely clear. When it bought MG Rover for £53 million last year, it undertook to "seriously consider" Longbridge as the location for its manufacturing venture in the UK and spoke of resuming production of MG models.
Only last week Wang Hongbiao, a Nanjing director, compared his company's relationship with Longbridge to a marriage and restated its intention to build cars there.